Apparel Value Chain

In the apparel value chain, respective positions can distinguish potential apparel buyers. The
position in the apparel value chain usually indicates how the business will take place in terms of
market size, MOQ requirements, and price.

Different types of buyers require a different approach to purchasing. Analyzing the value chain,
apparel manufacturers & trading houses look at the buyer’s operation, challenges they face, and
their sales strategy to serve them better. This also indicates the type of services they require such
as the number of sample developments for a particular order, design and development service, and
the like.

Some buyers sell to the apparel end consumer by marketing themselves with their brand. For
example, Shishoo – is a Russian kids’ clothing brand developed by Rosin Export Import Company
Ltd of Bangladesh. Others sell through Alibaba, Amazon, and niche platforms such as Wolf &
Badger. Lack of brand awareness is the biggest challenge faced by such buyers. Suppliers help
develop new designs for such buyers.

Online multi-brand retailer buyers, such as Asos Ozon or “About You”, sell different existing
brands and develop their private label collections. They can quickly identify market sentiment and
interest and immediately react to sales analytics. They usually place a small trial order initially. If
the response is satisfactory, they place an actual bulk order. These types of buyers benefitted
greatly during the pandemic times.

Major renowned retailers such as H&M, Primark & Zara directly place orders to the apparel
manufacturers in Bangladesh. They can place orders quickly since they only need one development
sample for order confirmation. Their price pressure is high, leading to lower prices for trims. Their
order quantities range from large to very small.

Fashion brands such as Detsky Mir (DMR), Dochki-Sinochki – Russia, develop a collection six to
12 months before the original production. These brands require a salesman sample (SMS) of each
collection style. Every sample must look exactly like the product will in the store. Those samples
also require branded trims and accessories. It takes months for an order to be placed.

Intermediaries (trading houses/agents/importers/private label companies) resell products made in
Bangladesh to buyers higher up the apparel value chain. They focus on low prices and require
flexibility in quality and quantity. Some provide sourcing and logistics solutions, such as Lachmis
& Li & Fung. They also focus on design, market trends & stock-keeping. In local jargon, foreigners
are called the buyer in Bangladesh, even if they are intermediaries. Intermediaries, based in
Bangladesh, are usually called buying houses.

Apparel Manufacturers are the garments factories. There are roughly 3000 export-oriented apparel
manufacturing factories in the country.