Bangladesh’s reign as the world’s second-largest exporter of garments after China could soon be overthrown by Vietnam, providing one of the clearest signs that its economic and political woes have taken a material toll over the past year.
Vietnam is set to generate $44 billion in apparel export revenue in 2024, an 11 percent year-over-year increase from the year before and nearly $4 billion more than Bangladesh’s target of $40.5 billion, Cao Huu Hieu, CEO of the Vietnam National Textile and Garment Group, the textile giant better known as Vinatex, said at a press conference in Hanoi on Wednesday.
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While Vietnam’s year began on a softer note due to sluggish global growth, momentum picked up in the second half of 2024 after Bangladesh’s uncertain future in the face of explosive student-led protests, Prime Minister Sheikh Hasina’s unceremonious ouster and still-percolating worker unrest drove brands and retailers to reposition orders, Cao said, calling it a “fortune” for suppliers who benefited from the shift.
But Miran Ali, a member of the Bangladesh Garment Manufacturer and Exporters Association’s interim board of directors, is confident that the South Asian nation will bounce back from its labor and financial troubles in the coming year. Last month, a U.S. delegation of government, brand and civil society representatives met with Bangladesh’s leadership to affirm what they described as their shared commitment to “independent, democratic trade unions for Bangladeshi workers and the businesses that employ them.” The group included executives from Gap Inc., Calvin Klein owner PVH Corp. and The North Face operator VF Corp., which collectively purchase some $1.8 billion of Bangladesh-made clothing.
“We welcome the friendly competition that Vietnam is giving Bangladesh,” he told Sourcing Journal. “And we firmly expect, in 2025, to continue to be the second-largest garment exporter in the world.”
Cao said as much this week when he pointed out that Bangladesh’s minimum wage is lower than Vietnam’s, meaning that the calculus could change—as it did following a similar recalibration post-Covid-19—in the former’s favor once more. Adding weight to that argument is the fact that orders from Bangladesh tend toward simpler, lower-priced products that benefit from cheaper labor rather than “value-added” skills. Not all Vietnamese suppliers were able to take advantage of them as a result, he said.