$2b apparel market in reach in Japan, now target gets higher 

With high-value products, apparel makers now aim to gain a bigger slice of the $24 billion Japanese market taking advantage of growing exports to the potential destination.

The country's apparel shipments to Japan regained the $1 billion-mark in FY22 after two consecutive years of the pandemic-induced slowdown, according to the Export Promotion Bureau (EPB).

The apparel sector hopes that its exports to Japan will reach $2 billion in the current fiscal year, with sportswear, outerwear, denim and lingerie, said the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

A good number of work orders are pouring in from big Japanese buyers. Besides, many buyers and brands are expressing interest in investing in Bangladesh's man made fibre industry, industry people say.

They are also trying to take advantage of the increasingly popular China-plus-one strategy – in which companies avoid investing only in China and diversify their businesses to alternative destinations, they add. 

Since 2017, Bangladesh's stake in the Japanese clothing market has been growing and reached nearly 5% in 2021, according to International Trade Centre (ITC) data

Industry owners say they are now exploring new buyers in the Japanese market, capitalising on the shifting orders from China, Vietnam and Myanmar. 

Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association, told The Business Standard that Bangladesh's apparel exports to Japan first got a new impetus in 2010 when the latter started looking for alternative sourcing options under the China-plus-one strategy. 

"Now, many Japanese orders are shifting to us from Myanmar, China and Vietnam," he said.

According to EPB data, apparel shipments to the Japanese market saw nearly 26% growth to over $217 million in the first two months of the current fiscal year, while the receipts amounted to $172.91 million in the same period of the last fiscal. 

Japanese fashion company Fast Retailing, which owns six clothing brands, including Uniqlo, earned $19.3 billion in revenue in 2022, according to American business magazine Forbes.

Uniqlo's revenue stood at $12.37 billion in the Japanese calendar year of 2021, according to its company website. 

Uniqlo has posted a record quarterly profit as the weaker yen and strong sales in the United States made up for a slump in a pandemic-hit Chinese market.

Operating profit for the three-month period at the end of May jumped 37% from a year earlier to 81.8 billion yen ($587.4 million), an all-time high, the company said in a statement, as it lifted forecasts for sales and earnings for the full fiscal year.

Japanese buyers are very careful about quality, said Kutubuddin Ahmed, founder of Envoy Textiles Ltd, adding that they take time before placing any orders to any suppliers to be assured about the quality of products. 

"We have business with a number of Japanese buyers and their annual business growth is 10%-12%" said Kutubuddin, a supplier of Japan's Uniqlo. 

Bangladesh has scope to increase the country's share in this market, he added. 

Echoing the Envoy Textile founder, Urmi Group managing director Asif Ashraf said, "We have had business with two Japanese clothing brands – GU and Muji for a long time." 

Kamal Kamruzzaman, director (marketing) at PRAN-RFL Group, said they export some food items to the Japanese market. 

Japan continues to be an important market for leather and leather goods, the second largest export sector of the country, 

Ibnul Wara, managing director at Austan Ltd, told TBS that Bangladesh's exports of leather, leather bags and footwear to Japan have gone up close to $100 million. 

However, China still remains the major supplier of leather bags and footwear for Japan. Despite higher production costs, China has the advantage of a complete supply chain, which gives them a comparative edge when it comes to lead time, he noted. 

Moreover, geographic proximity means transportation lead time is also largely an advantage, enabling customers not having to commit to orders too much ahead of time, Ibnul Wara also said.

The Bangladesh leather goods sector will largely benefit from a strong supply chain industry within the country, which will reduce dependency on imports of components other than leather. 

Attracting investments in essential components for footwear and bags can help Bangladesh reduce lead time by as much as 30 days, he added.

To find new buyers, the BGMEA will join a trade show in Japan in November this year, said Shahidullah Azim, vice-president of the BGMEA.

BGMEA President Faruque Hassan told TBS, "Japan is a big export destination for us. We want to double our earnings from the country in the current fiscal year."

"After the pandemic-led closure of two years, we will now go to the country and invite big buyers and brands to source products from us."  

Faruque also said the BGMEA had identified several potential export markets with their own study, notable among them are Korea, Japan, India, Mid-East and Africa. 

They have appointed an internationally reputed firm to study and identify global business opportunities and markets for their products, he added.

Shahidullah Azim told TBS, "We hope our apparel exports to the country reach $10 billion by 2030." 

According to the International Trade Centre (ITC) data, Japanese apparel imports stood at $23.83 billion in 2021. China is the largest export source, $13.90 billion, followed by Vietnam's $3.45billion.