Concerns for the garment industry due to instability in Bangladesh – Opportunities and Challenges for Vietnam
The unstable situation in Bangladesh is causing far-reaching impacts on the global garment industry, especially in large manufacturing countries such as Vietnam.
The negative impact of unrest in Bangladesh
Garment factories in Bangladesh have been shut down indefinitely since the security situation in Bangladesh became tense last month.
Bangladesh is the world’s third-largest exporter of garments in 2023, behind only China and the European Union (EU), with an export turnover of $38.4 billion.
(Illustration: Getty Images)
Some global retailers have expressed concern about this situation as the year-end shopping season approaches.
Swedish fashion retailer H&M orders production at about 1,000 factories in Bangladesh. Japan’s Fast Retailing Group, which owns the Uniqlo brand, orders production at about 29 factories, while Levi Strauss of the United States has 33 facilities in Bangladesh.
- Production Interruptions: Protests, strikes and unstable security situations have caused factories to temporarily shut down, causing a shortage of product supplies.
- Loss of investor confidence: Foreign investors could withdraw capital from Bangladesh, affecting the ability of garment factories to expand and upgrade.
- Increased production costs: The cost of protection, transportation and other costs increases, pushing up product costs and reducing competitiveness.
- Impact on product quality: The focus on maintaining production can reduce product quality, affecting the reputation of the Bangladeshi garment industry.
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Opportunities for Vietnam’s garment industry
- Attract transfer orders: Vietnamese businesses can take advantage of this opportunity to attract orders from international brands that are looking for a more stable supply.
- Strengthening its position in the international market: Vietnam can improve its position in the global garment market, becoming a reliable manufacturing partner.
- Promoting investment: The unstable situation in Bangladesh may attract foreign investors to turn to Vietnam.
- Developing a sustainable supply chain: Vietnam can take advantage of this opportunity to develop a sustainable supply chain, meeting the increasing requirements of consumers.
Challenges for Vietnam’s garment industry
- Fierce competition: Vietnam will have to compete with other countries such as Indonesia and Cambodia to attract orders.
- Pressure on quality and delivery time: Vietnamese businesses need to improve product quality and ensure on-time delivery to meet customer requirements.
- Labor issues: The shortage of skilled labor and problems related to working conditions can be a barrier to the development of the industry.
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What does Vietnam need to do to take advantage of the opportunity?
- Improving competitiveness: Investing in technology, training human resources, improving production efficiency.
- National Branding: Promote the image of Vietnam’s garment industry in the international market.
- Supporting small and medium-sized businesses: Provide supportive policies in terms of finance, training and market access.
- Sustainable supply chain development: Ensuring that Vietnamese garment products meet environmental and social standards.
- Market Diversification: Not only focus on a few large markets, but need to look for new markets.
In conclusion, the unstable situation in Bangladesh is both a challenge and an opportunity for Vietnam’s garment industry. To make the most of this opportunity, Vietnam needs to have appropriate policies to support businesses to improve their competitiveness and build a sustainable garment industry.
Tam Hoa
Engineering Co., Ltd. Factory Address: Que Vo 2 Industrial Park, Ngoc Xa Commune, Que Vo Town, Bac Ninh Province, Vietnam
Southern Branch: 601 Truong Chinh, Tan Thoi Nhat Ward, District 12, Ho Chi Minh
City Hotline: 0948240946 / 0968963732
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Business Scope: Glue Gluing Machine, Fabric Cutting Machine, Folding Machine, Heat Press Machine, Ultrasonic Welding Machine, providing production equipment in garment, leather, footwear industry.
