How have cancelled or delayed orders from global brands hurt exports?

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Cancelled or Delayed Orders Impact Bangladesh's Export Sector

Big-name international brands have cancelled or delayed billions of dollars in orders from Bangladesh, significantly impacting the nation's export earnings. This situation poses a considerable threat to the apparel industry, which is a cornerstone of the South Asian country's economy, contributing nearly all of its export revenue. Factories are under immense pressure to meet existing deadlines, fearing that these substantial orders could be rerouted to competitors in countries such as Vietnam or China.
Scale of the Apparel Export Industry

Last year, Bangladesh's apparel sector achieved substantial global reach, shipping out US$35 billion worth of garments to major international retailers. These prominent buyers include globally recognised brands like H&M, Inditex, and Walmart. This export volume positions Bangladesh as the second-largest apparel exporter worldwide, trailing only behind China.
Pressure to Fulfill Existing Orders

Despite the global economic disruption caused by the pandemic, some manufacturers are facing pressure from retailers to fulfil outstanding export orders. This pressure arises from the brands' need to maintain their supply chains and meet their own market demands. Factories are thus navigating a difficult balance between adhering to public health directives and meeting the commercial imperatives of their international clients.
Risk of Order Diversion

A primary concern for Bangladeshi garment factories is the potential diversion of billions of dollars in orders to competing manufacturing hubs. Countries like Vietnam and China are seen as alternative sources for apparel production. The fear is that delays or perceived risks in Bangladesh could prompt brands to shift their business to these alternative locations, leading to a direct loss of revenue and market share for Bangladesh.

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How have cancelled or delayed orders from global brands hurt exports?

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