October 26, 2017
The fashion industry is booming in the capital city of Dhaka, and there are many factories and outlets which are very popular for consumers in Bangladesh.
The product is not the only attraction for consumers to visit these stores, but creative concepts are also a reason that brings them to these outlets.
Boutique outlets can be seen in almost all major traffic areas throughout the city. Single fashion boutique stores are available in top shopping malls as well as factory outlets followed by branded stores. In most cases, these stores are largely dominated by global brands. Even high-end global brands like Gucci, Ralph Lauren, Calvin Klein, Hugo Boss, and Lacoste are now available in Bangladesh.
The social middle class in Dhaka is growing, and because of that, global brands are becoming popular and affordable to consumers.
Perception bias
Increasing globalization as well as advanced transportation, communication, and technology, have led to local customers being exposed to and having greater access to various products and services from different countries.
Studies have found that customers often perceive foreign products differently, compared to local products, but that perception bias varies across countries.
For instance, consumers in developed countries have a preference for locally made products while consumers in developing countries like Bangladesh, India, and Pakistan prefer foreign products.
The perception in developing countries is that foreign clothing brands will impress others and increase their social status as they represent modern fashion and indicate higher incomes.
In developing countries, consumers have different expectations from different brands and tend to depend on the brand-name for their purchase decisions.
Currently, consumers have a wide range of choices of foreign products in the clothing industry, and these products have been long perceived to be more popular among consumers, relative to local products.
However, consumer behavior has change considerably in recent times and, to understand it better, I conducted some research to identify the factors that determine consumer preferences in buying local or global brands. I also wanted to compare the factors to provide recommendations for local brands in competing with global brands.
Changing dynamics
There was a time when our economy was heavily dependent on agriculture, with 85% of our workforce engaged in it.
The situation has changed since then, as currently, besides agriculture, ready-made garments (RMG), bank and non-bank financial institutions, outsourcing, foreign remittance from manpower all add significant value to our nation’s economy.
In 2014, industrial manufacturing contribution to our GDP was 17%, whereas agricultural and wholesale retail trade contributed 13% each.
Besides economic growth, increasing urbanization, changes in lifestyle, globalization, and technological advancement in communication and transportation have changed consumers’ behavior.
Now consumers have access to the internet, e-commerce sites, and social media, where they get exposed to the variety of products and services in the local and global markets.
And like many other industries in Bangladesh, branding in clothing industry is reaching new heights.
Favorable results
There is a shift taking place in consumption and my research findings indicate encouraging news for local clothing brands: Customers from all socio-economic classes are now accepting Bangladeshi brands more and more, and are even willing to pay the price of international brands if the local brands can maintain the current level of quality standards and design.
I also found that local brands have penetrated the market to such an extent that they are not only competing with top international brands, but are leading in the market.
The local clothing brands are not only providing quality products but are also providing competitive pricing for target customers. It is encouraging that the overall demand for local brands has grown over the years, as we have various established local brands operating in the market for over a decade, such as Aarong, Yellow, Westecs, Ecstasy and many more.
It is a positive indicator for the local clothing industry that people from all walks of life are relying on the quality of their products and their brand value, and are willing to pay a decent price.
As the results from this study show, the purchasing behavior of consumers living in Dhaka, regardless of their demographic variance, seem to be favoring the growing clothing industry and their continuously improving local brands.
At every age bracket, the demand for the local brands is also increasing. People are more into buying from exclusive outlets of local brands, particularly those which have been around for a while and have established a brand value in the market with their established standard of quality and modern designs incorporating a fusion of the West and the East.
Whatever the category of occupation, the typical Bangladeshi consumer now has a higher demand for local clothing brands; service holders seem to be the highest promoters of local brands, followed by the students.
Also, regardless of the level of income, customers seem to prefer local brands to international brands and even over customized clothes.
These trends are very encouraging for our local clothing brands, and it will give them the opportunity to improve product quality, design, and price.
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