European fashion brand production business moved westward and made in China

As China moves to the upper reaches of the industrial value chain, many fashion brands are finding suitable suppliers around the local area. Many countries around Western Europe are becoming new fashion manufacturing centers.

The cost of procurement from China is on the rise, but it is still relatively low. Therefore, the decision of the fashion brand to be changed from "Morocco" or "Moldova" is not entirely due to cost considerations.

The rapidly changing consumer behavior is the main driving force for demand in the fashion industry. Companies in the industry need to be flexible enough to survive the competition with strong rivals Zara, an Inditex (ITX) company. Zara can launch a fashion similar to a catwalk show in the store in just a few weeks. Currently, 60% of its products are produced in or around Europe.

The Italian lingerie brand La Perla designer Giovanni Bianchi told Reuters: “The cost of producing clothing in Turkey and Mexico is certainly higher than that of Chinese manufacturing, but considering the (China) salary increase, the cost is not How much higher, and Turkey and *** are much closer to Italy, more convenient for us, and better quality."

At the end of last year, the brand had moved its Volkswagen brand Studio La Perla production line from China to Turkey and Mexico, and moved pajamas from China to Portugal.

The brand estimates that if it is necessary to complete the same work, if it is necessary to pay a manpower cost of 10 Euros in China, it will have to pay 15-16 Euros in Turkey or Turkey. Therefore, in this respect, manufacturing costs in China are still the lowest. .

However, this situation is gradually changing.

In the past five years, China’s national wage index rose by an average of 15% each year. The Institut Francaisdela Mode estimates that the monthly salary in China's coastal areas rose from 240 euros in 2005 to 400 euros last year, while the current monthly salary is *** 160 euros, and Morocco and Moldova are 152 euros and 200 euros respectively.

In addition, conditions imposed by Chinese factories are more stringent, which also makes fashion companies have to think twice when considering whether to cooperate with China.

French fashion brands Jean-Charles de Castelbajac, Barbara Bui (BBUI.PA) and Etam (TAM.PA: Quotes) have recently moved some of their production operations. To areas closer to home.

These brands stated that Chinese manufacturers are constantly putting pressure on the scale of their orders, which may lead to a backlog of goods, which has to be discounted, which in turn damages the brand image.

Jean Shire recently moved overseas production operations to Hungary, and its production leader, Celine Lopes, said: “The cost-effectiveness of manufacturing in China no longer makes us satisfied.”

Barbara Bui moved production to Hungary, Bulgaria, Romania and Turkey in 2010. Jean-Michel Lagarde, the deputy chief executive, said: "The distance and language barriers caused by manufacturing in China have made it difficult for us to maintain good quality."

“We are more likely to act in our way when working with producers in Southern and Eastern Europe.”