Retail Industry in Bangladesh.docx

Bangladesh Fashion Retail Industry Overview: Retail trade is one of the traditional businesses of Bangladesh. This trend caught on in Asia in the late 1990s-2000s with China being the first Asian country to bring the concept of retail marketing. Bangladesh is part of a fourth wave that just barely has emerged in the last few years. In Bangladesh supermarkets have successfully made a breakthrough in the urban lifestyle with the idea of “all essential commodities under one roof.” In 2001, Rahim Afrooz Ltd changed the face of retailing in Bangladesh by launching the first retail shop – Agora. However, many consider Aarong to be the first retail shop in Bangladesh. Its first retail store was opened in Dhaka in 1978. Retail industry in Bangladesh offers more variety, convenience and hygienic commodities which are otherwise not offered in traditional wet markets more commonly found. This industry’s expansion is keeping pace with population growth and changes in consumption patterns, which are consistent with the growth of the economy. This expansion has not been structurally organized, because, until recently, retailing had never been perceived as an industry, but rather as an individual or family business entity with a very limited scope of organized expansion. Little to no market information is available on the retail sector, but some secondary sources indicate that Retail is one of the biggest sources of employment (12 percent), and it contributed 13 percent (wholesale and retail trading) to Bangladesh’s GDP. Organized retail is booming and creating huge opportunity for enterprises. Retailing in Bangladesh is one of the pillars of its economy which provides largest employment opportunities in the country. Comprising of organized or unorganized sectors, retail industry is one of the fastest growing industries. Retail shops in Bangladesh range from open-air temporary shops to well-equipped modern supermarkets. Retailing has advantages both for customers as well as wholesalers and manufacturers. It provides bulk breaking, assorting, storing and informing facilities to customers. Besides it helps wholesalers and manufacturers to distribute goods to the customers, collect information from customers and absorb risk. Moreover retailing provides economic utility by creating form utility, time utility, place utility and possession utility.

Growing Sales of Modern Retail: Retail trade is a traditional business in Bangladesh, although modern retail constitutes only around 10% of total sales. However, the situation is changing, and the revenue of modern retailers increased by 15% annually over the review period, twice exceeding the growth rate of the overall retail environment. It is also anticipated that the turnover of modern retailing will increase 4-fold by 2020, reaching US$37 billion.

Fashion Retail Sector in Bangladesh: There are many large and famous boutique houses in Dhaka city among them some are internationally recognized. Aarong is one of them, which is a sister concern of Brac Organization. Rang, Shadakalo, Bibiana, Anjans, Nipun, K-kraft, nagordola, Deshal, M-kraft, etc are various boutique houses of Dhaka city with many braches in different areas of Dhaka city. The Bangladesh government is set to declare the flourishing boutique business as a new 'thrust sector', the commerce minister said on March, 2012, "We will declare it as a 'thrust sector' to help expansion of the industry which employs a huge number of our women labor force". The boutique industry has an estimated annual turnover of Tk 6000 crore, or 1 percent of Bangladesh's total GDP, Prof AKM Abduj Jaher of the National University said in a paper presented at a seminar in the capital. There are at least 5000 boutiques, in Bangladesh, with an estimated investment of Tk 250 crore and The government is ready to provide funds for training in the sector and better bank loan facilities will be provided to the entrepreneurs of this sector.

Type of retailers: The target market of Bangladeshi retailers can be categorized in the following sections. Types of retailer available in our country are as follow:

1) Department Stores: These retailers are general merchandisers offering mid-to-high quality products and strong level of services, though in most cases these retailers would not fall into the full-service category. While department stores are classified as general merchandisers some carry a more selective product line. For instance, In Bangladesh, the most common name is Almas, Priyo and PQS. It is easy to find toys, cosmetics, apparels, shoes and so forth. So the range of products sold by them is highly diversified. The target groups for these retailers are specialty market.

2) Category Killers or Big Box Store: Many major retail chains have taken what were previously narrowly focused, small specialty store concepts and have expanded them to create large specialty stores. A large retail chain store that is dominant in its product category. This type of store generally offers an extensive selection of merchandise at prices so low that smaller stores cannot compete. The “category killers” are found in such specialty areas as electronic (e. g., Best Buy), office supplies (e. g., Staples) and sporting goods (e. g., Sport Authority). In Bangladesh, there is a presence of this kind of retailers like BATA, Apex, Diamond World, Artisti Collection, etc. They all have specialized themselves in one particular product category.

3) Super Store or Hypermarket: A hypermarket or a superstore combines a supermarket and a department store. The result is a very large retail facility which carries an enormous range of products under one roof, including full lines of groceries and general merchandise. In theory, hypermarkets allow customers to satisfy all their routine weekly shopping needs in one. Jamuna Future Park or Bashundhara City could be a close proximity as they provide large parking lot and wide variety of shopping items.

4) Supermarket: These are markets which are small compared to hypermarkets. In most cases these markets are self-served. Their target consumers are not really the mass market. They lie somewhere in between the specialty market and the mass market. In Bangladesh the perfect example of super market is Nandan, Agora and Meena Baazar. They are the leaders in super market industry.

5) City Market: City market is quite available in Bangladesh. The famous city markets of Dhaka are New Market, Karwan Bazar and Town hall market. The price is very cheap and the customer service is low as well. The sellers don’t have to pay high rent for their shopping carts, and so they can charge lower prices. The target customers are mass market. In terms of profit, these sorts of market are the most profitable.

6) Convenience Store: They are small stores that carry a limited line of high-turnover convenience goods. They are the stores which are just located besides our house. In Bangladesh they are widely available. The target customer is again the mass market. The level of customer service sometimes depends on the personal relation with the seller.

7) E-retailer: This type of retailer enables customers to shop on-line via the internet and buy products which are then delivered. This type of retailer is highly convenient and is able to supply a

wider geographic customer base. E-retailers often have lower rent and overheads so offer very competitive pricing.

Types of Fashion House: There are two kinds of fashion clothing stores: 1. Retail fashion store: It specializes in selling new clothing products created by fashion designers which may (or may not) be dictated by celebrity trends. Some retail fashion stores have gone to such specialized extent that they only offer the works of their in-house designers. Others have a number of brand names and designer names offered in one roof. 2. Fashion boutique: It specializes in personalized service; cozy ambience and unique merchandise are offered here.

Supply side dynamics of Boutique Fashion in Bangladesh: The boutique fashion industry in Bangladesh has rapidly grown and become an important part of the economy. There are a lots of boutique shops available in our country which fulfilling the local demand of clothing vastly by their wide range of product varieties. Boutique house production passes on to the number of different product levels integrated in one product line. Productions have both operations and marketing implications. Producer supplies products to meet the demand and requirements of retailers along the customers. As a result, the boutique fashion industry has tremendous product variety, short product life cycles, unpredictable market demand, and inflexible supply processes. The industry is the primary liaison among the producer, retailer and consumer. Producer works for retailers order. Retailers are then sales the fashion product to consumers. In order to provide excellent boutique fashion, boutique producers in Bangladesh need diagnostic procedures that are creative, efficient and accurate. In addition, the producer should not be overly painful by the retailer. Unfortunately, producer carries just retailers order even the retailer provides fabrics and design. They have no choice. If producer continuous to do the procedures, they will unable to develop their creativity and over all entrepreneur approach for inclusive growth in the boutique fashion industry. Lack of entrepreneurial approach among some boutique fashion wear producers is prohibitive of inclusive growth for producer in the boutique fashion industry.

Although the boutique industry is growing slowly, it exists in a dynamic and competitive environment. In order to improve profitability, many companies are restructuring to create leaner

Figure 1 :

Value chain of fashion boutique houses

organizations and adopt new technologies. Consolidation has been prevalent in this industry in the past few years, as larger companies gain leverage in market position and cost cutting. In the boutique industry, companies can operate as retailers or manufacturers (wholesalers) or both. For instance, Sada Kalo, a vertical retailer, manufactures and markets their products through retail outlets. A company can be a manufacturer and sell its products to both retailers and consumers through online shop. We assume that the boutique fashion firm is involved in the production, branding and retail of fashion products. There may have many forward and backward linkage industries like color, fabrics and accessories industries etc.

Complexity of the boutique fashion industry: Industry-level factors: The complexity of the boutique fashion industry explores from manufacturing to marketing to distribution in industry level factors. Finding ways to innovate and simplify are keys to surviving in the competitive fashion industry. From a survey covered on 39 major, small and medium enterprise boutique businesses that are from Mohakhali, Gulshan, Mohammadpur and Mirpur areas in Dhaka found that- boutique producer sells nearly 51 percent in retail market, 5 percent in online shop, 15 percent sells to brand shop, and 28 percent to whole

Figure 2: Marketing Mix

sale market. Consumer Factors: Consumer factors include demographics, cultures and lifestyle. These factors affect the clothing industry in different ways. For example, a small clothing manufacturer needs to create new styles like loose-fitting styles that appeal to those of different cultures. Contrarily, clothing manufacturers, wholesalers and retailers avoid creating too many that will fall outside for another new style. In that situation, ready- made garments importer make profit by absorbing the market demand. Competitors: Consumer chooses to buy fashion wear based on personal taste, status needs and financial condition. Many fashion brands compete in price ranges to appeal to different consumer price points. A fashion house that made its mark in couture, for example, often develops a ready-towear line for retailers and a discount line for mass-merchandisers. They have not ability to launch in their chosen niche market might depend on controlling their design, sourcing raw materials and production costs to present their line at the appropriate price point. As a result, small and medium boutique business is growing very fast and they are facing problems for surviving in domestic market. Collaboration: Collaboration can help address many of the boutique industry’s challenges by joining areas of development that typically have trouble connecting.

Data Analysis of Products of Boutique Shops: The statistical analysis of products of boutique shops is given below-

Graph 1: Boutique

shops (%) in availability of product categories

Different types of products are available in the boutique shops of Bangladesh. The above graph-01 regarding this shows that, there is only 30% boutique shops where only male clothing available, female clothing available in 54% boutique shops. Besides these male and female both but female oriented is of 40% and including kids 30%. Other products are also available in minor format.

Graph 2: Clothing products (%) available in boutique shop

Again if we analyze the product categories in boutique shop based on their products percentages available then we get from the above Graph 2, in boutique shop of Bangladesh female wear-70% and male wear are of 15% while kids wear are 10%.

Graph 3: Clothing

products varieties (%) available in boutique shop

There are various varieties of clothing products available in Bangladeshi boutique shops. In the analysis of clothing products (%) availability in boutique shops we get from the above Graph 3, through the year traditional clothing products are of 40%, western share 20%. Besides occasional and seasonal products are of 10% respectively. As well as nightwear and seasonal products are of 5% respectively. Noted that given data is for a particular period. In Bangladesh depending on the occasion especially like Eid, Poihela Baishakh boutique shops are decorated their full volume with the occasional products.

Graph 4: Selling

products (%) categories in boutique shop

In the analysis of selling products in boutique shops we see from the above Graph 4, boutique shops of Bangladesh sell ladies wear mostly of 55%. Comparatively they sell gents wear 15%, jewellery and antiques 15%, Kids wear 15%. There are other products like leather items, toys, home textiles etc. which are sold in minor quantity.

Discussion on Products of Boutique Shops: There are lots of products available in the boutique shop of Bangladesh though it is varied on the basis of country and origin. In different country of the world by name of boutique shops they are selling different varieties of products. In our country, boutique shops sell clothing mostly for the female customers. Besides this there are other clothing products including for male, kids available in the boutique shops of Bangladesh but most of them are female oriented. Among the clothing items available in the boutique shops of Bangladesh most of the products are traditional and occasional including the large volume of western wear. Western culture is knocking at the door. A huge numbers of female customers are interested to wear western wear. For them boutique shops are seen to decorate them with a major volume of western clothing products. Except clothing products most of the boutique shops in our country sell jewellery and antique products including handicrafts mostly. Besides these there are a considerable volume of ceramics, toys, and soil made products sold in the boutique shops of Bangladesh. Less but has some considerable volume of herbal products sold in the boutique shops of Bangladesh.

Target marketing & marketing strategies of some Boutiques: The leading and fastest growing ready-made fashion boutique brands in Bangladesh cannot compromise anything with their quality. According to their 4ps of their Marketing mix, even though they don’t have much product variety, they are successful in offering best quality in the market. Their promotional activities are emphasized to build their quality and reliability attributes on consumers mind with trust and professionalism in their work, price is not their main concern to be focused in their promotional activities. As being both manufacturer and retailer, they have a full control both on their production, distribution and market outlet. Their potential consumers are those who acknowledge that brand fashion shop is all about quality and most importantly those who can afford the products.

They develop their products for the targeted market based on clothing culture as well as from the religious perspective of Bangladesh. Their target market areas are Dhaka, Chittagong and Sylhet where the population density is high, and per capita income is higher comparatively. Shoppers World is the strongest in terms of market share (according to a survey report based on the year 2012-2013). However, Artisti is a price winner in the market as they have cheapest price for men’s wear comparatively. The company is welcoming to change and it brings changes both in management and in the product. Sometimes the changes are good or sometimes the changes are bad. But they didn’t stop the changing process and taking measured risk for the betterment of customers, employees, and the organization as a whole. They may not adopt the best marketing strategies but yet comparatively their marketing strategies are best than the other local companies. Their quality is their primary concern in their strategies and they are being successful in maintaining it. No wonder the tag line of the brand is “Quality that you can Trust”.

Leading Fashion Houses or Boutique Houses in Bangladesh: 1. Aarong: Aarong is a fair trade organization in Bangladesh. It is established in 1978. Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are women. Today, Aarong has become the foundation upon which independent cooperative groups and family-based artisans market their craft, in an effort to position the nation’s handicraft industry on a world platform of appreciation and acknowledgement. 2. Cats Eye: Cats Eye, Monsoon Rain and unlimited, are the apparel segments of Cats Eye Ltd., One of the most successful clothing brands in Bangladesh. It is a brand that can be directly associated with the history of men’s fashion in Bangladesh. Their manufacturing facility, comprising of a total floor space of 44,000 square feet, is on the cutting edge of fashion

technology

and

has

a production capacity of 2,000 units a day; and 700 driven, dedicated employee s define synchronicity as they make the stylish moves behind the scene. 3. Richman: Richman is one of the top leading fashion houses in Bangladesh. It is popular for men’s wear. Lubnan Trade Consortium Ltd is the mother company of Richman. Product types are- Shirt, t-shirt, polo shirt, pant, formal pant, casual pant, denim pant, blazer, accessories etc.

4. Yellow: YELLOW is the trendiest fashion brand from Bangladesh, is mostly distinguished for its true international quality designs and fabrics. It is sister concern of Beximco. It established in 2004. Their Product types are: Men's, Women's, Children's Apparel & Accessories. 5. Ecstasy: From its humble beginnings as a single store chain in 1997, Ecstasy has quickly become one of the nation’s largest fashion retailers. Ecstasy houses a few of the best clothing brands in the country including its Top-of the line brand 'Tanjim' for men and 'Zarzain' for women. The best thing about Ecstasy is that there is something for everyone there; there is a very large, versatile collection of products for both men and women. One of Ecstasy's most significant factors is their ability to set trends, the designers of Ecstasy like to experiment and the outcome is a range of very unique designs which, within a short period of time, becomes the 'NEXTTHING'. Another factor that adds up to Ecstasy's list of complements is the fact that, out of all the clothing brands out there, Ecstasy is perhaps the most professional and organized of them all. 6. Rang: Rang, is country’s one of the top fashion houses. Rang has been contributing to the growth of handloom and handicraft industry. It established in 1994. Their products types are: Saree, Salwar Kamiz, Fotua, T-Shirt, Panjabi, Kurta, Handicraft etc. 7. Kay Kraft: Founded in 1993, Kay Kraft is a leading brand in the fashion industry of Bangladesh. It is a retailer and wholesaler of Bangladeshi Fashion Wear for Women, Men and Kids. They sell Salwar Kameez, Panjabee, Saree, Fotua, Tops, T-Shirt, Kids' wear, Accessories etc. They have several outlet stores in Dhaka, Chittagong and Canada. 8. Dorjibari: Dorjibari is a renowned fashion house in Bangladesh. It has become one of the leading manufacturers & exporters of high fashion apparel & accessories for Men, Women & Kids.It established in 2007. Product types are: Shirt, pant, Saree, Salwar Kamiz, Scarf, Kurti, Fotua, Panjabi, Shirt, Kids Wear, Foot wear, Bag, Handicraft, accessories etc and Price Range is: 750/- to 35,000/-BDT. 9. Anjan’s: In the line on Bangladesh fashion design Anjan’s wing reached over the mass peoples. Anjan’s contribution is not only in the making fashion line rather has also arranged work arena among the poor village women. It established in 1994. Products types are: Saree, Salwar Kamiz, Kurti, Fotua, Panjabi, Shirt, Kid’s Wear, Handicraft, Hometex, Etc. 10. Bibiana: Bibiana is a famous brand of Bangladesh of traditional attire with exclusive embroidery and fine fabric. Bibiana has a wide variety of traditional clothing for Women,

Men and Kid’s with trendy color, modern cut and festive look. It established in 1994.Product Types are: Salwar-Kamiz, Ladies Fotua, Saree, Panjabi, Gents Fotua, Shirt, Shawl, Dopatta, Sherwani, Sandal, Jacket, Household Accessories, Jewelery, Children Salwar Kamiz, Lungi etc. and Price Ranges from : 500/- to 8000/-BDT.

More Renowned Fashion houses in Dhaka:  Sailor by Epyllion  Artisan  Vasavi  Lubnan  Banglar mela  Nagordola  Shada kalo  Menzklub  Le Reve  Mantra  Shoppers World  Zara  Deshal  Jatra  Zarif fashion house Dhaka  Trendz  Smartex  Fit Elegance Bangladesh  Nabila Boutiques Ltd  Dressy dale  Mansha  Foring  Monariz

 Style sell  Moon’s boutique  Butterfly by Shagufta  Zara  Vogue By Prince  Mumu Maria  Khan Brothers  Noir  Mayasir Ltd  Uniqlo, etc. “Growing Fashion Houses in Sylhet” Maha, She, Color, Deshi, Easy style, Baroni, Tulona, Bangla, Nagri, Niori etc. Online shopping in Bangladesh: Online shopping is becoming popular in Bangladesh, encouraging new entrants to open e-portals for consumer goods and household essentials. In the past one year, nearly a dozen online shopping portals or e-trading platforms launched operations, offering products and services from vegetables, clothes, computer accessories to books and travel tickets, said IT sector insiders. The trend started after Bangladesh Bank cleared ways for payment by debit and credit card in the local currency. The extent of visits and deals made through these online portals is rising. An increased use of internetenabled mobile phones also added vigor to online shopping. Some online stores have already kept provisions to place orders by mobile phone. The total number of Internet Subscribers has reached 67.245 million at the end of February, 2017 in Bangladesh (according to BTRC). Among them Dhaka has 22 million active Facebook users (according to a study conducted in 2016). It resulted in a number of growing online businesses in Facebook. Such as- Butterfly by Shagufta, Mumu Maria, and Vogue by Prince etc - they all started their business online first. After a certain period, when they started to gain popularity and became well-recognized they opened physical store and made many branches also. Now they are very accepted and well-liked boutique houses in especially Dhaka.

Bangladesh’s headway in online retailing coincides at a time when online portals account for a major share of daily retail trade in the developed world. Some 150 merchants are linked with akhoni.com that promotes clothes, electronic gadgets, mobile phones, travel packages and restaurants. They receive many orders from different parts of the country. PriyoShop, Bagdoom, Daraz, BdShop, AjkerDeal, EasyShoppingBD, Zuumzuum s etc are some of the major online retail shops. More online shops are growing very rapidly now-a-days to facilitate consumers.

Related news regarding fashion boutique sector: “Ctg boutiques trending up” The number of boutiques is increasing rapidly in Chittagong to cater to the changing lifestyle of the city dwellers, particularly the youngsters. Even seven or eight years ago, people in the region were not acquainted with the concept of boutiques, and the number of such fashion houses was negligible. Now, some Chittagong-based boutiques are working hard to make traditional clothes and spread their business. Most of the stores have women entrepreneurs at the helm. One of them is Arion Fashion Boutique, Linas Boutique House etc. As awareness of fashion is growing fast among the people in Chittagong, the boutiques are also growing in the port city. Anyone can grab a good market share with creativity and uniqueness. Many Dhaka-based boutiques have set up their stores in the port city due to increasing demand. The outlet of 'Deshi Dosh', a group of ten houses with traditional undertones originating in Dhaka, is located in Afmi Plaza. According to the manager of Kay Kraft, a member of Deshi Dosh-they could not make profits when they started their journey in Chittagong in 2010, but now they are satisfied and thinking of setting up another outlet,” Entrepreneurs said there is a huge potential of the boutiques in Chittagong and almost 150 houses are operating. Monowara Hakim Ali, president of Chittagong Women Chamber of Commerce and Industry, said, "We have many possibilities in this sector and the boutiques are giving a boost to Chittagong. If we can bring all the boutiques under one roof, it will be easier to promote them,”

Conclusions: Though in Bangladesh maximum boutique shops offer higher price for their available products and they target as their customer of higher class people, so then product varieties in the boutique shops is a dominant factor for this business to attract customer. Depending on this factor just after late nineties to present, entrepreneurs of boutique in Bangladesh have concentrated to increase product

varieties for the expansion of their business. As well as boutique shops are contributing a larger share of local clothing demand of Bangladesh and it has bright prospects to enter into the world market in future. But there are some barriers which are occupying this sector. If the barriers are removed and development steps are taken regarding products, quality, customer service, marketing then it could be a promising sector for the solution of our huge unemployment.

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