Sri Lankan garment exports lose market share
Sri Lanka’s garment industry is losing market share in its key export destinations, the US and the EU, to its competitors from India, Bangladesh, Pakistan, Vietnam and Cambodia, according to a report by the Colombo-based Institute of Policy Studies.
"Despite considerable increases in absolute export earnings to both and US and EU markets, it is of concern to note that Sri Lanka’s relative market share in garment exports has been losing ground. The increase in export earnings over the years has been due largely to a shift in Sri Lankan garment exports from the US to EU," the IPS said in its report, ‘Sri Lanka: State of the Economy 2012’.
"Sri Lanka has been seeing a steady decline in its market share in the US from 2.3 percent in 2005 to 1.8 percent in 2011. Sri Lanka has been losing out to countries such as Pakistan, Vietnam, Bangladesh, Indonesia and Cambodia. Pakistan’s share in the US apparel market was significantly below that of Sri Lanka in 2005 at 1.8 percent, but is now ahead at 2.1 percent. Diversification of its product range, marketing and large investments in value-added sectors including sewing machines, stitching, knitting, finishing and knitting processing have contributed towards Pakistan’s progress,"
"While Sri Lanka has been successful in penetrating the EU market, 2010 and 2011 have seen a marginal decline in the share compared to 2009. Moreover, Sri Lanka is bound to lose its foothold further as the EU GSP Plus concessions eroded. Sri Lanka garment exports will face higher tariffs under the new reforms that would come into effect from 2014. Whereas China and Turkey still account for over half of the garment export share in the EU, Sri Lanka has been losing its market share to competitor countries such as Bangladesh, India, Vietnam, Pakistan and Cambodia. Bangladesh has been particularly successful in penetrating the EU market, with an increase of 6.2 percent in 2009 to 11.2 percent in 2011.”
Industry sources said the country was losing around US$ 1 billion each year due to the withdrawal of GSP Plus, said The Island.