Figure 1 Leather Industry Overview of Bangladesh

Bangladesh's leather industry has long been a cornerstone of the country’s export portfolio after the RMG sector, offering immense potential to establish itself as a global leader in premium leather goods. As the global leather goods market is projected to grow from USD 440.64 billion in 2022 to USD 738.61 billion by 2030, Bangladesh’s robust backward linkage in raw material production positions the country to capture a larger market share.

Figure 2 Bangladesh's Total Export of Merchandise Made of Leather

Bangladesh is among the top ten leather producers globally, benefiting from a strong supply of raw hides and skins as byproducts of its thriving livestock industry. Coupled with a skilled workforce and competitive production costs, the country is well-positioned to expand its global market presence. However, the sector has long been over-reliant on exporting semi-finished leather, limiting its revenue potential, and restricting industry growth.

Now, Bangladesh is looking to move beyond just selling semi-finished products and shift towards value-added manufacturing. Producing finished goods such as premium footwear, handbags, and apparel presents a significant opportunity to increase export earnings, create jobs, and strengthen the country’s position in the global leather market. By prioritizing this transition, Bangladesh can unlock new economic opportunities and establish itself as a key player in high-value leather exports.

Opportunities for Growth

Figure 3 Bangladesh's Leather Industry on the Global Stage

Bangladesh’s leather industry has several opportunities to solidify its position as a global leader. The country’s preferential market access to major economies, including the European Union, Japan, South Korea, China, Australia, and India, presents an avenue to expand its footprint in high-demand markets. By capitalizing on these trade advantages, Bangladesh can increase the export of value-added leather products.

 Bangladesh has established itself as an exporter of footwear to various global brands and is now diversifying into new product categories. The country currently exports a wide range of items, including shoes, wallets, sandals, belts, accessories, flip-flops, and various types of boots, to renowned international retailers such as Fila, Deichmann, Timberland, Aldo, H&M, Marks & Spencer, S.Oliver, and Wolverine.[i]

 Investments in technology and infrastructure are crucial to achieving this goal. Modernizing production facilities, ensuring compliance with international environmental and labor standards, and implementing a functional CETP system would enhance the industry’s global competitiveness. Moreover, attracting foreign direct investment (FDI) could facilitate knowledge transfer, improve production efficiency, and help develop globally recognized Bangladeshi leather brands.

 To strengthen forward linkages, a strategic focus on value addition, brand building, and compliance with international standards is essential. Transitioning from exporting semi-finished leather to manufacturing finished goods can significantly boost the industry’s profitability. Encouraging local entrepreneurs to invest in premium leather goods and facilitating FDI to build state-of-the-art manufacturing units will help the sector thrive.

The leather industry in Bangladesh holds immense potential. By addressing its challenges and leveraging emerging opportunities, the sector is poised to move beyond raw material exports and establish itself as a leading producer of high-value finished leather products. This transition will not only contribute significantly to Bangladesh’s economic growth but also strengthen its position in global trade.

As Bangladesh embraces diversification and value addition, international buyers and global brands have an opportunity to partner with a growing, cost-competitive, and quality-driven manufacturing hub. With a skilled workforce, an abundant supply of raw materials, and a commitment to sustainable production, Bangladesh is ready to provide better value, reliability, and innovation to the global leather market.

This article was authored by Sakina Binte Belayet, a Business Analyst at LightCastle Partners. For further clarifications, contact here: exportbangladesh.ec4j@gmail.com