Globalisation we experience physically. The etiquettes in our apparels tell us that the majority is not produced in Europe. Made in Bangladesh, China and Vietnam is nothing special anymore.
Particular Bangladesh gains in importance as clothing supplier while China is starting to lose its attractiveness in this branch. Bangladesh began as a garment industry in the latest 1970s. Famous brands like H&M, Wall Mart, Gap, Next and Marks & Spencer import their clothes from Bangladesh. Today the label “Made in Bangladesh” is present in nearly every tenth apparel in Europe. Around nine textile imports to Europe are from Bangladesh. Thus, Bangladesh is now the third largest exporter to Europe. In 2004, textile and clothing industry account for 75% of the country’s total export earnings and 80% of manufacturing export earnings.
A survey of the business consulting McKinsey & Company underlines the growing importance of the country Bangladesh. According to this survey 89% of the interviewed CEOs see Bangladesh as top sourcing hotspot in the next five years. The countries Vietnam and Indonesia get second and third place.
But why is Bangladesh so successful in apparel industry? The success of Bangladesh’s garment industry mainly results from low production costs, especially its cheap labour. A garment factory worker gets in average a wage of $43 per month. In contrast China offers an average monthly wage of over $100 which is also of course far too little. In addition, Bangladesh benefits from various preferential trade agreements. For example in January 2011 the EU allowed duty-free access to clothes from Bangladesh.
European and US apparel buyers benefit from decreasing purchasing costs by producing in low-cost companies. It helps them to get a competitive advantage and finally to increase profit. End-consumers want to have cheaper and cheaper clothes and mostly do not care about the source.
One way to reduce this exploitation is as end-consumer to buy fair trade clothes. One example is the German company Trigema which only produces in Germany. It is necessary to set a signal and show that as consumer human working conditions are more important than cheap clothes.