Local footwear pulls in top world retailers
Bangladeshi exporters look to brighter days ahead
Bangladesh’s footwear industry has attracted attention of globally known chain retails that now consider buying shoes from here in a bid to diversify their sourcing base.
Global retail chains such as JC Penny, Marks & Spencer, Tesco and Wal-Mart, which now buy clothes from Bangladesh, are contacting leading footwear exporters to widen sourcing along with garments, said exporters.
The interest of these buyers has opened up an opportunity for the leather and footwear industry to help propel exports by increasing volumes, reaching new markets and penetrating new segments of products, the exporters said.
“We are in talks with a number of global retail chain stores to make shoes for them,” said Nasir Khan, managing director of Jennys Shoes Ltd that exports to Japan and Europe.
“Top officials in charge of sourcing are visiting our factories. They are talking of buying big volume of footwear of mid to high price range,” said Khan, citing JC Penny, Marks & Spencer and Wal-Mart.
Sector leaders said the brands became interested in Bangladesh as they move to diversify sourcing destination in the wake of rising production cost in the world’s biggest shoe exporter China due to a hike in labour cost there and appreciation of its currency.
The exporters said buyers look for widening sourcing markets to maintain margins without increasing retail prices, which in turn has opened up opportunity for Bangladesh, which now sees rising exports from footwear due to a gradual shift in orders from China.
Availability of raw materials, a duty-free export facility to Europe and Japan, and lower production cost due to cheap labour are the reasons behind the shift in orders and spike in exports from footwear, a sub-sector under the $650 million export earner leather industry.
The leather sector is the fourth biggest contributor to the total export earnings.
In fiscal 2010-11, footwear exports posted a 46 percent growth fetching $297 million, up from $204 million the previous year, according to Export Promotion Bureau (EPB).
Footwear exports grew 42 percent to $139 million in July-October of 2011-12, compared to the same period a year ago, EPB data shows.
“Consistent exports of leather goods and footwear have helped earn a good image due to our product quality, competitive edge and workmanship,” said Saiful Islam, former president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB).
Currently, shoe makers export to various established and well-known retailers in Europe, US and Japan including Deichmann of Germany, Macys of the USA, and ABC Mart of Japan, and Timberland and Caterpillar.
“Our lead-time is lower than China which takes three months plus time. For us, it is two months because we have locally available raw materials,” he said.
President of LFMEAB Syed Nasim Manzur said: “Bangladesh has come up in the global map of footwear. It is a positive sign and important development for the entrepreneurs mainly for new entrants in the sector.”
Manzur, also managing director of a leading exporter Apexadelchi Footwear Ltd, said local footwear makers have so far marketed their products directly abroad.
But the interest of the general merchandise retailers, which have sourcing offices in Bangladesh, to buy non-garment items is a positive development, said the official of Apexadelchi.
The company exports to 130 footwear retailers and brands in over 40 countries in Europe, North America and Japan.
“This is an opportunity for Bangladeshi exporters to increase volumes, reach new markets and penetrate new segments. It is interesting to note that footwear and leather goods are regarded as accessories for clothing, hence there is natural synergy for sourcing,” said Manzur.
Islam said orders from retail chains like Marks & Spencer, JC Penny and others will facilitate expansion of the leather industry by creating more jobs and improving quality of footwear further.