As an apparel sourcing hub, Bangladesh has a strong past and faces lots of challenges for the future. A recent McKinsey report on 'Bangladesh's ready-made garments industry: The challenge of growth' triggered much discussion on just-style - prompting its author, Achim Berg, to respond.

The study was financed in full by McKinsey, and was driven by our intention to better understand what to expect from Bangladesh as an apparel sourcing hub. This issue has come up quite often in our client work and we felt it was time to take a more critical look into it.

With this aim in mind, we interviewed CPOs in Europe and the United States who are responsible for some $46bn in total apparel sourcing value. This is a group of senior managers who not only think about "what they would like to do", but who were responsible for 66% of all apparel exports from Bangladesh to Europe and the US in 2011.

We also interviewed 100+ local ready-made garment (RMG) suppliers representing approximately 10% of Bangladesh's total apparel exports.

And finally, we concluded that "a number of significant challenges brought on by growth exist. Depending on how well the most critical issues can be managed, the market will realistically develop at an annual rate of 7% to 9% within the next 10 years".

This forecast value growth rate is below the historical rate of 14% for the period 2000-2010 regarding Bangladesh's total apparel exports, though it considers not only the established customer countries, but also emerging customers (such as China and India).

Despite these technicalities, we agree that it is difficult (and risky) to forecast future developments - but we do strongly believe that European and US buyers have the intention to further increase their sourcing from Bangladesh in the mid-term.

So have the tides really already turned, based on US import data in the second half of 2011? It could be the case, but we are sceptical, since a thorough interpretation of the statistical data demands caution.

Yes, import volumes from Bangladesh into the US were down by 7% in 2011, but total apparel imports were also down by 4%. This makes the loss more relative, but also shows a small market share loss for Bangladesh.

However, of the top ten importers, India, Pakistan, and Latin America showed even heavier losses, and only Vietnam and Cambodia were able to report growth on a low, single-digit level.

But it should be noted that the previous year 2010 was very strong for Bangladesh's RMG exports into the US, with a growth rate of 12% - which means that the 2011 import volumes and values are significantly higher than those of 2009. So the question is: Is 2011 really a change in trend or could it simply be a weaker year after a very strong one?

Looking at Europe (12/2010 to 11/2011), Bangladesh's volume imports into the EU15 countries paint another picture: the 9% growth rate was the strongest in the last five years and it helped Bangladesh significantly outperform China (-1%), Turkey (-5%), and India (-9%) in the same period.

It is and will remain a challenge for Bangladesh to take advantage of the demand growth and turn it into "real" growth, with concerns including inflation, new factory development, and foreign direct investments.

But we are actually confident that key stakeholder groups, buyers, suppliers, and government will jointly find a way to overcome many of these shortcomings. And when they do, it could result in an export value of $36bn to $42bn by 2020, meaning that the market would triple by the end of the decade.

Achim Berg is a McKinsey Partner and co-author of the study 'Bangladesh's ready-made garments industry: The challenge of growth'. His comments here are made in response to 'The Flanarant' on just-style last month, which examined a surprising decrease in garment sales from Bangladesh and presented a critical review of the McKinsey report.