Global brands look to expand presence in Bangladesh

A number of global fashion brands are looking to expand their business in Bangladesh, thanks to the country's booming retail market riding on its economic growth.

The globally renowned German sportswear brand Puma and the French sport goods retailer Decathlon opened two outlets in Bangladesh last year.

The Japanese "Fast Retailing Co" launched its brand "Grameen Uniqlo" through joint venture with the Grameen Bank Group in 2013 and has since opened 16 stores.

Last month Decathlon Bangladesh Officials talked with us seeking duty exemption for products sourced from Bangladesh for this market, said Rubana Huq, president of Bangladesh Garment Manufactures and Exporters Association (BGMEA).

After that, RubanaHuq sent a letter to the National Board of Revenue (NBR) seeking duty exemption on 20 percent products sourced from Bangladesh by the international brands. This will allow them to sell these products at local outlets.

The letter also mentioned that the government allow export oriented industry to sell 20 percent of their product in local market, after paying all duties.

Currently, those brands first bring those products to their warehouses in foreign countries from the Bangladeshi manufacturers. Then the outlets of those brands import those products for selling here.

Rubana Huq told The Business Standard that providing duty exemption facility would attract more international brands to Bangladesh.

BGMEA officials have said currently sellers import finished goods by paying a certain amount of duty imposed on them, while export oriented industries import raw materials without paying any duty. The proposed duty facility will let the international brands to sell products here by paying a relaxed duty rate.

On April 7, 2019, Puma opened its outlet in Banani through partnership with the DBL Group. It is one of its largest outlets in South Asia.

Mohammad Abdur Rahim Feroz, vice chairman of the DBL Group, said, "Puma operated its business in South Asia from India, which neglected Bangladesh as a potential market and sent a small amount of goods here."

"But after observing the volume of sales in Bangladesh for three months, the German brand showed huge interest in increasing the number of outlets here and in opening shops in Dhanmondi, Mirpur and Uttara."

"We knew from the beginning that there existed a potential market for Puma products as previously people had to buy these products when travelling abroad or when someone came from foreign countries. But now Bangladeshi customers can buy the same products for much less price," he added.

In July 2019, the French sporting goods retailer Decathlon opened its first store in Dhaka's Uttara, targeting Bangladesh's growing market of health consciousness and fitness business.   

At the Decathlon store, items related to football, cricket, basketball, swimming, cycling, trekking, hiking and walking alongside sports textiles, backpacks, tents and other accessories and fitness products are available.

The company now sources products for the Dhaka store mainly from its warehouse in India, providing after sales service and accepting returns.

The company first made an appearance in Bangladesh around 20 years ago and 10 years later established its own office in Dhaka and Chattogram, employing some 200 staff in total.

Annually, the company sources 100 million pieces of items like tents, shoes and metal frames of bicycles from 50 suppliers in Bangladesh, generating employment for some 50,000 people.

Significantly, the company's full year market study last year noted that Bangladesh's sports market would be expanding soon.