Local digital marketplace for garments to boost exports

Tech giants like Amazon and Alibaba are generating millions of dollars in revenue from Bangladesh selling garments made locally in the absence of a homegrown digital marketplace capable of engaging in international trade.

To fill the void, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) wanted to launch such an international virtual marketplace but had to stop short for the absence of government policies.

An existing National Digital Commerce Policy of 2018 is meant to govern only the domestic market and does not have any explicit clause enabling international e-commerce.

In effect, homegrown virtual marketplaces can only facilitate trade in the domestic markets.

In January this year, International Finance Corporation (IFC) and LightCastle, on behalf of the BGMEA, jointly conducted a study on "Establishing A Virtual Marketplace for Bangladeshi Apparels".

It said there was potential for homegrown digital marketplaces capable of international trade to generate $489 million in revenues annually through the sale of garments in the US, European Union (EU) and Africa by 2027.

By 2026, the virtual garment market in the US, EU and Africa will be worth a combined $308 billion, the study also found.

The study said homegrown digital garment markets could gain a 0.20 percent share of that US market, 0.10 percent of that of the EU and 0.75 percent of that of Africa by 2027.

"We need the virtual marketplace for our garment business," said Faruque Hassan, the immediate past BGMEA president, who initiated the move towards launching an internationally accepted virtual marketplace last year.

"It could come about either though individual companies or through a common platform like the BGMEA for all," he said.

Amazon and Alibaba are doing good business selling Bangladeshi garments though their virtual marketplace, and Bangladesh should also take this opportunity, Hassan said.

Only a few changes in the existing e-commerce policy, such as allowing local companies to engage in international trade and transactions through the virtual marketplace, can be a gamechanger, he said.

Moreover, customs and banking rules need to be amended for launching the virtual marketplace in Bangladesh, he said.

SM Mannan Koch, the incumbent BGMEA president, also said he would start working soon to convince the government to amend the e-commerce policy for the launch of the digital marketplace for garment trade with the international partners.

The establishment of virtual marketplaces will reduce lead times, reduce the cost of business, and simplify business procedures in terms of international trade and the number of middlemen would also be reduced, which will ultimately make business more competitive.