Could Thailand be an alternative solution to India for consumer goods?
The import of Thai products is growing in Bangladesh on the back of higher demand and top quality in a country where the consumer class is fast-expanding.
Babywear, cosmetics, fashionable footwear, fancy products, spices, more fresh vegetables, fruits and foods, nuts and snacks segments are packed with Thai goods.
Thai boutique hotels, restaurants, beauty parlours and salons are springing up in major cities like Dhaka, Chattogram and Khulna aswell as in lots of district towns.
Local businessmen opt for the Southeast Asian nation as an alternative to two major sourcing destinations: India and China. Actually, Thailand has turned into a extremely popular alternative destination, especially to small and medium traders mainly for just two reasons: better quality and geographical location.
Many businessmen don't want to depend on India and China. Goods are smuggled into Bangladesh from India as the two countries share a lot more than 4,000 kilometres of borders, while China can't always supply quality food at affordable prices.
For example, Antu Kareem, managing director of Pentagon International, a consumer goods distributor, began stationery business in Bangladesh in 2000.
He used to import ball point pens from India. His business have been on a roll as the demand was high. He was an agent of almost 15 Indian consumer goods in Bangladesh.
But, his rewarding business faced a significant setback all on an abrupt when similar varieties of branded goods started slipping in to the country through borders. The business enterprise nosedived overnight.
He desperately tried to keep his business afloat, but to no avail.
With the changed situation, he also changed his sourcing destination and chose Thailand, as there is absolutely no possibility of the products being smuggled in to the country.
"I did so not choose China as persons don't have faith in Chinese goods. Japan is a very expensive destination and I also need to follow a whole lot of regulations if I do business with Japan," Kareem told The Daily Star.
The US might have been another potential source, but he did not opt for the American market since it required a lot of capital.
"I thought only Thailand could be my perfect choice in Asia as I could buy all goods at competitive prices with shorter lead time and quality goods."
He started business with Thailand in 2005. Today, Kareem may be the sole distributor of Kodomo-branded goods in Bangladesh. Currently, he distributes branded items such as for example shampoo, soap, toothpaste, face powder and utensils.
Kareem's annual turnover is Tk 100 crore and sells Tk 40 crore worth of Kodomo-branded goods in the united states.
"My business is great now and I haven't any fear about smuggling."
Thailand is a long way away from Bangladesh. However, geographically it really is closer to the united states compared with other Parts of asia. "This can be the biggest advantage of employing Thailand," he said.
Many local small and medium-sized businessmen can't spend the money for business of consumer goods with the united states and Europe, although there is a major demand for the products from the regions.
"However, Thailand can provide those goods at competitive prices," Kareem added.
Like Kareem, Abdus Salam, head of business for food division at Fair Group, is another businessman who supplies snacks of the Thai brand Tong Garden around Bangladesh.
Each year, Salam, who previously had trading relations with India, imports $1.5 million worth of snacks of the brand and distributes them through his agents. He has been doing business with Thailand for the last 10 years.
"Bangladeshi consumers have more rely upon Thai products than goods from other Parts of asia like China and India."
With the rising demand of Thai goods, Salam's business keeps growing at 20 % year-on-year.
"The secret to their success is that there is absolutely no border between Bangladesh and Thailand by which goods could be smuggled into."
He applauded the Thai embassy in Dhaka for working relentlessly to promote Thai companies in Bangladesh for many years.
"The embassy's cooperation helped a whole lot grow business here. Thai people are incredibly cooperative. We feel encouraged," Salam added.
Superstores also sell Thai fresh foods and vegetables, dehydrated foods and fruits, according to Kamal Bayazid, owner of Thai Corner (Food).
Virtually all superstores have a separate Thai corners as the demand for the things from the Southeast Asian nation is increasing, he said.
Bayazid supplies Thai fruits, vegetables and pastes of spices to superstores.
The three businessmen demanded Bangladesh sign a free of charge trade agreement (FTA) with Thailand for easing business as the demand for Thai goods is going up.
The import duty on some of the Thai goods is more than 200 %, importers say.
For instance, importers need to cough up Tk 200 to import one kilogram of nuts. Such a higher duty is a major barrier to flourishing trade between your two countries, they said.
Commerce Minister Tipu Munshi discussed the problem of signing an FTA throughout a recent visit to the united states.
"The Thai government is quite wanting to sign an FTA. We are also actively considering to strike the FTA with Thailand and some other Asian countries soon," he told The Daily Star.
At the fifth joint trade commission meeting between Bangladesh and Thailand in Bangkok in January, the minister demanded trade benefit on the exports of 36 Bangladeshi products to Thailand.
"Our export basket is narrow. So, we can not exploit the Thai market that much," said Munir Hossain, vice-president of the Bangladesh Thai Chamber of Commerce and Industry.
"We are able to send garment what to international retail chains such as H&M and Zara, that have existence in Thailand."
If the proposed FTA is inked, textile, garment, pharmaceuticals, jute and jute goods and light engineering of Bangladesh ought to be included.
"Otherwise, Bangladesh might not benefit from the FTA," Hossain added.
Thai companies are widening their footprint in Bangladesh at such a breakneck speed that Thai Airways has tripled its daily flights back and forth Bangladesh, aside from state-run Biman Bangladesh Airlines plus some private airlines.
"We would like Thai direct investment in the industries like hospitality, textile, motor parts and hotel management as they are already strong in these areas," Hossain added.
