A McKinsey report suggest, western mass-market brands may reduce sourcing from countries like Bangladesh for manufacturing readymade garments (RMG) in the coming years. The apparel marketing companies are likely to gain from sourcing Mexico or Turkey, in the neighborhood of the US and Europe respectively, instead of Bangladesh. The report emphasised the apparel companies' need to focus on near shoring, automation, and sustainability to meet customers’ needs.
According to McKinsey, a 5-percentage point increase in sell-through would make up for the higher labor costs encountered closer to home. The US firm called 'chasing cheap' products in Asia outmoded as low-cost has, in some cases, become synonymous with low-quality and low-compliance in a world where transparency and ethics are in high demand, too.
By 2025, 82 per cent of respondents in the McKinsey-Sourcing Journal survey expect to move more than 10 per cent of their total sourcing volume to near shoring locales. Such a scenario may affect the potential growth of Bangladesh's garments, a more than $36-billion industry with the highest concentration of laborers.
