History

History of Bangladesh Buying House

The export oriented RMG sector in Bangladesh started its modest journey as a small non-traditional sector of export in late the 1970s. After the liberation, especially from the 90s the RMG industry started to surge at a formidable pace as the country was gaining political and social stability. Within three decades, RMG has transformed itself as the country’s highest revenue generating sector, contributing 82% (USD 28.094 billion FY 15-16) of country’s total export. 70’s or 80’s there have no BH in Bangladesh. The early 90’s some entrepreneur brings the buying house concept to fulfill the industrial demand

Now according to reports from BKMEA, BGMEA & BGBA there are more than 1000 enlisted buying houses, 1500 export oriented textile industries and more than 6000 (4000 under BGMEA and 2000 under BKMEA as of 2015-16 FY) RMG industries operating in the country. It is to be mentioned that real number would be bit less as there are companies who are members of the both BGMEA and BKMEA. Through last 2 decades’ this number was growing very fast. Industry insiders said, buying house is a hub for sellers comprising of leading manufacturers, exporters and suppliers, displaying their latest and trendiest collection of apparels to a huge audience round the year.

Why need Buying House?

Actually a buying house always plays a vital role in the RMG sector. It is the combination of all marketing activities, which is not only related to searching foreign garment buyers, order collecting, media for the manufacturers but also placing orders to the suitable garments manufacturing factories and providing all types of technical and communicational support to the buyers and manufacturers

BH plays an important role in the garments manufacturing sector of Bangladesh. Bangladesh RMG sector is 100% dependent on foreign buyers, and foreign buyers depend on garments buying house. Because many times they don’t have enough idea of the production country, way of communication, culture, nature and so on, whereas buying house provides them strong support by supplying garments products according to their demands. To reduce buying house dependence some of the most famous buyers opened their own office in Bangladesh which is very costly. That is not possible for all foreign buyers. So that the new buying houses are increasing day by day. Below are some fundamental points for a comprehensive view on the necessity of BH

Cost Saving

Production cost reduction is one of the prime objectives of a retailer. If a buyer gets the product with competitive price and best quality, it’ll help to catch the mass level consumer market. Bangladesh is 100% export oriented manufacturing country. Hundreds of buyers and retailers are producing their brands from Bangladesh but the maximum company has no any liaison or own operational office here. So for the appropriate execution of an order there has no alternative to depend on a good reliable buying partner except build up an own functioning office. Setting up own office is costly and time consuming factor. One of the famous Brand country manager CarinKjellgren said, “Half million USD we are investing only for maintain 30 employees per year”. Whereas a buyer can easily get all services from a buying house only to share some percentage FOB or service charge or sometime both.

Intensive Care

A new product like a new born baby, without proper care it’ll bring thousands dollar losses on both sides. A big lose for a buyer is reputation as well as money. The Merchandiser, leader of the products always busy to take care of the product’s quality as per buyer requirement. He is the doctor of any types of intensive situation in the development to shipment stage. And that is not possible for buyers from the far away. Buying houses are performing this kind of services with full buyer and supplier satisfaction.

Intend Support

The supplier normally achieved 90 days for a single order execution lead time. In the recent year, it’s reducing significantly, but not more than 60 days that mean within this anything can happen. A continues third eye support is needed in this complex supply chain process; it is badly needed in the supplier side especially in the production time. In the production time merchandiser need to take some important decision for smooth production, so that before take the decision he has to observe the real scenario, what happened the production floor after wide-ranging observation, he can make a decision save quality and production both in stipulated time. And it’s not possible for a foreign buyer without a buying house support

Main strong communication

The proper communication never happened without appropriate knowledge about the subject and complete technical know-how. Buying house receives proper information from the buyer and makes it understandable for the supplier