The purchase orders placed by H&M and Walmart – one of the largest buyers of Made in Bangladesh tagged items – have decreased their orders placing by 10%, media reported.
Industry people said that in the current global economic context, purchase orders have decreased mainly because of the decline in demand in the respective countries.
They are feared that in this situation, the days ahead may be challenging for the apparel sector.
Sweden’s H&M is a major clothing supplier to the European market, and Walmart to the US market where H&M buys about $4 billion worth of clothes from Bangladesh every year and Walmart buys $2 billion worth of apparel items.
In the first two months of this year, H&M’s purchase orders fell by 10% compared to the same period last year while Walmart’s purchase orders also fell at the same rate.
Due to the effect of the Russia-Ukraine war, all the countries of the world have to deal with inflationary situations for which the consumers have to pay more attention to meet the demand for essential products like food and energy the clothing has naturally moved away from the shopping priority.
Due to this trend of consumers, brand retailers have also changed their purchasing strategy.
Industry experts said that if there is even a 5% impact on H&M’s sales due to reduced consumer demand, it will have a big impact in Bangladesh. The proof of that is found in the purchase orders for the last two months.
According to the data provided by BGMEA, Bangladesh’s garment exports to 27 countries of the European Union increased by 8.42% in the first two months of this year.
However, exports to Germany, the second largest market, fell by 12.37% and exports to the United States, the largest market, decreased by 13.79%, while to Canada, decreased by 3.49%.
This slowdown in the demand and consumption of apparel may continue for some time and the coming months could be quite challenging for Bangladesh, industry people said.
In the meantime, besides exploring new opportunities, manufacturers have to look at the proper use and efficiency of resources, they suggested.