The reliance of Bangladesh’s readymade garment sector on buying houses has significantly declined over the past decade, driven by enhanced product development capabilities, improved marketing strategies, and direct connections with major brands and buyers, industry experts have observed.

This trend was corroborated by a recent study conducted by the Bangladesh Institute of Development Studies (BIDS), which found that the share of RMG exports through buying houses dropped to 38 per cent in 2023 from 51 per cent in 2014.

Conversely, the proportion of exports conducted directly by garment factories to buyers rose to 52 per cent in 2023, compared to 38 per cent in 2014, according to the study.

BIDS research director Kazi Iqbal presented the findings of the study, titled ‘Technology Upgradation of the RMG Industries in Bangladesh,’ on Monday during the four-day BIDS annual conference held in the capital.

The study examined eight product categories—knit lingerie, denim trousers, sweaters, T-shirts, jackets, woven trousers, woven shirts, and home textiles—along with 36 processes and 136 sub-processes from 43 firms.

It revealed that the total export value of these 43 units increased from USD 645 million in 2014 to $1.03 billion in 2023.

The number of buyers for these surveyed units also rose significantly. On average, each unit supplied goods to 17 buyers in 2023, up from 11 in 2014.

The study highlighted a substantial 65 per cent growth in export value per firm over the same period.

The surveyed units experienced major capacity expansions in the past decade, accompanied by improved firm capabilities.

These improvements include the employment of more technical professionals, such as graduate and diploma-holding textile and industrial engineers, increased use of software, higher rates of direct exports, and adherence to international certifications.

The study noted increased investments in research and development, particularly in product categories such as home textiles, lingerie, sweaters, woven shirts, and woven trousers.

Productivity gains were also recorded at the sub-process level, with notable improvements in the production of jackets, home textiles, and lingerie.

However, Kazi Iftequer Hossain, a former president of the Bangladesh Garment Buying House Association, contested the findings, asserting that dependency on buying houses remains unchanged.

‘Rather, the number of buying houses and their expertise has increased, while local factory capacities have not improved correspondingly,’ he said.

According to Iftequer, approximately 2,100 buying houses collectively contribute $8 billion to the country’s total RMG exports.

In comparison, 11 major retailers with offices in Dhaka source a larger share, worth $21 billion, from Bangladesh.

Iftequer also pointed out that some buying houses that traded goods worth $6 million three years ago now handle transactions valued at $30 million. This growth, he argued, reflects their increasing importance in the RMG export sector.