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Bangladesh Gaining on China and Vietnam in Race to Dominate U.S. Apparel Market

Although China and Vietnam are still leading in the race for U.S. apparel import market share, Bangladesh has been gaining ground as well.

Apparel imports from Vietnam have totaled $6 billion year-to-date, according to the most recent data published by the US Department of Commerce’s Office of Textiles and Apparel (OTEXA), and have grown almost three times faster than those from China so far this year on a dollar basis, though the total volume is just over a quarter the size of China’s.

Growth in imported apparel from Vietnam accelerated in September, bringing its share of U.S. imported apparel to 10%, a gain of almost .9 percentage points of market share so far this year compared to the same period in 2012.

Vietnam has maintained its strong number two position thanks to increases in men’s and women’s cotton and manmade fiber shirts and blouses, men’s and women’s pants, and manmade fiber dresses. There were decreases in some categories of innerwear (bras and nightgowns) but increases in others (underwear and pajamas).

Total apparel imports from Vietnam so far this year are $4.5 billion, up 12.5% from last year. The cost per SME of apparel imported from Vietnam fell by only .4% in the month.

U.S. apparel imports from China totaled $22.4 billion through September. Year-to-date units (on a square meter equivalent basis) rose 5.2%, driving the cost per unit down by a higher-than-average 2.5%. China’s share of U.S. apparel imports is 37%, ahead of last month’s 36% year-to-date share, but .4 percentage points behind the same period last year.

Total apparel imports have grown 3.7% on a dollar basis through September compared to the first nine months of last year, Total unit volume, measured on a square meter equivalent basis, has increased 5.3% in the year-to-date period, driving the average cost per SME down by 1.5%.

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Product categories from China that have seen the biggest increases so far this year include women’s and girls’ woven cotton pants, manmade fiber men’s knit shirts, women’s blouses and hosiery; manmade bras and other intimate apparel. These increases were offset by declines in many other categories, including cotton and manmade fiber skirts and dresses.

Despite all its issues with safety and infrastructure, Bangladesh has come roaring back, and so far this year has shipped $3.8 billion worth of apparel to the U.S. and gained .36 points of US apparel market share, comprising 6.4% of total apparel imports. It is now the third largest source of U.S. apparel, having replaced Indonesia in the number three spot on both a dollar and unit basis. Key product categories from Bangladesh include men’s woven cotton shirts and men’s and women’s cotton pants. However, recent legislation in Bangladesh that significantly increased the minimum wage there might alter considerably the country’s cost advantage vis-à-vis China and Vietnam, and could slow its growth.

Sri Lanka is also on the move. So far this year, it has shipped over $1.2 billion dollars worth of apparel to the U.S., 10.3% ahead of last year, the second fastest growth rate after Vietnam’s, putting it ahead of Pakistan as one of the top U.S. trading partners in dollar volume. One reason for this is a 3.4% fall in the value of the Sri Lankan rupee compared to the U.S. dollar in the first nine months of the year. Key product categories from Sri Lanka include women’s bras and men’s and women’s cotton pants, two areas in which Sri Lankan clothing makers have developed specific capabilities.

Mexico, Honduras and Indonesia have also suffered significant share losses in U.S. apparel. CAFTA has lost share to ASEAN. CBI imports, which are up by double digits on both a dollar and unit basis but flat on a share basis, are almost exclusively cotton tees from Haiti.