Bangladesh loses EU apparel market share faster than rivals

Infographic: TBS

Bangladesh is losing ground in the European Union, its largest apparel export market, faster than many of its key competitors as weakening European demand combines with growing concerns over the country's competitiveness ahead of its graduation from least developed country (LDC) status.

According to the latest Eurostat data compiled by the Bangladesh Apparel Voice, total EU apparel imports fell 9.96% year-on-year to €33.84 billion during January-May 2026, down from €37.58 billion in the same period a year earlier.

Imports from Bangladesh, however, dropped a much steeper 18.89% to €7.28 billion from €8.97 billion. Bangladesh's share of total EU apparel imports declined to 21.5% from 23.9% a year earlier.

Among Bangladesh's major competitors, imports from China fell 4.20%, Vietnam 1.51%, India 13.33% and Turkey 15.66%, all outperforming Bangladesh during the period. Cambodia's exports declined 10.77%, while Pakistan's shipments fell 17.01%.

The figures point to a growing challenge for Bangladesh as it prepares for LDC graduation, with exporters contending not only with weaker consumer demand but also with stronger competition from rival sourcing countries.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said international buyers were gradually adjusting their sourcing strategies ahead of Bangladesh's LDC graduation.

"Exports have declined across much of Europe. Buyers are gradually building sourcing capacity in India because they expect India to enjoy preferential market access while Bangladesh may face duties after graduation," he told The Business Standard.

Hatem said buyers already began developing alternative sourcing bases well before Bangladesh's preferential trade benefits expire.

MA Jabbar, managing director of DBL Group, said Bangladesh's sharper decline compared to Vietnam reflected structural differences in the industry.

"Bangladesh, India, Pakistan and Cambodia are still heavily dependent on cotton-based products, while competitors such as Vietnam have built much stronger capabilities in man-made fibre products. When demand shifts towards man-made fibre, countries with that infrastructure are naturally in a stronger position," he said.

Jabbar said Bangladesh must accelerate investment in man-made fibre and product diversification while also preparing for a future shaped by sustainability requirements.

"Net-zero and carbon-related requirements are becoming increasingly important. Buyers are looking at whether suppliers can demonstrate a credible transition toward renewable energy and lower carbon intensity. Countries such as India and Pakistan have advantages in renewable energy potential, and buyers are factoring these considerations into their future sourcing strategies," he added.

Jabbar warned that Bangladesh has yet to demonstrate a clear long-term roadmap on Net Zero and renewable energy, potentially creating uncertainty among buyers planning their future sourcing strategies.

Jabbar added that Bangladesh still enjoys advantages in manufacturing capability, flexibility and efficiency, but those strengths are being undermined by energy shortages, rising costs and policy uncertainty.

"We need a combined effort from the government and the private sector to improve energy security, support investment, strengthen law and order and show buyers that Bangladesh remains a reliable long-term sourcing destination," he added.

Shovon Islam, managing director of Sparrow Group, said the latest data pointed to a clear market-share loss rather than merely weaker demand.

"While EU apparel imports declined by 9.96%, Bangladesh's exports fell by 18.89%, reflecting buyers' growing risk-mitigation efforts ahead of Bangladesh's LDC graduation and stricter EU due-diligence requirements," he said.

Islam said Bangladesh must urgently secure competitive post-LDC market access through trade agreements and prepare for EU due-diligence and traceability requirements to prevent further order shifts. He added that high bank lending rates, limited access to capital, rising energy prices and unreliable supplies of gas and diesel were placing enormous pressure on exporters at a time when global competition was intensifying.

The latest Eurostat data also show mounting pressure on pricing. Bangladesh's average export value to the EU fell 9.41% year-on-year to €13.96 per kilogram, while export volume declined 10.46% to 521.37 million kilograms, indicating that exporters were selling both fewer and cheaper garments.