An Analysis of the Difficulties of China's Garment Industry

As Chen Dapeng, executive vice president of the China Garment Association, said that in the 30 years of rapid development in China, although the apparel industry has been ups and downs, it is still fairly stable. However, in 2012, it was a time when it was a turning point. In the past, companies were talking about transformation and upgrading. However, it has been thinking about when to turn and how to turn it. “The time has come to change. The conditions, the environment, and the foundations of China's garment industry and market have changed. The entire industry has developed very fast. The original expansion depends on speed, scale, and low cost. Now it is important Promote endogenous motive force.” Chen Dapeng’s remarks are profound after he thinks carefully.

In fact, on the topic of sluggish development of the industry, there have been different opinions and viewpoints in the past two years. As many industry experts put it, the development trend of the industry in 2012 is gradually clear, perhaps with high costs, sluggish domestic and foreign sales, transformation and upgrading, and innovation. All are major issues that companies are concerned about. But in the past few years, many companies are also accumulating energy, hoping to solve the obstacles to development. Based on this foundation, the China Garment Association also hopes that the industry can pass through the fog and internal strength. From 2012's “crossing” to the “strength” in 2013, the China Garment Association is extending the support of CHIC to enterprises. Bigger, and "strengthened," is also a thought that has emerged after considering the pressure of the development of garment companies.

Stress 1: High cost kicks off low-price competition “Cost pressure is one of the biggest pressures on Chinese garment companies, and the cost of labor has been high. In the 30 years of reform and opening up, the treatment of workers should be improved, and such improvement It is also the result of China’s economic development. The bottleneck of the development of garment enterprises is not the improvement of costs, but rather how the companies should do after the cost increases.” Chen Dapeng said that compared with China, the labor costs in Europe and the United States are nearly ten times higher, but the European and American labor agencies The value created is more than ten or even several times that of Chinese products. "China's low-cost era should be over. What companies need to do is adjust their production methods and operating methods after raising costs. In the past, they may rely on quantity to win. But the profits from large-scale production are not many, and marketing concepts must be changed. In accordance with the changes in the market to create a personalized brand, enhance creativity and innovation, in particular to ensure continuous innovation."

Since last year, due to the rise in labor costs in China, many foreign brands' production orders have shifted to Southeast Asian countries. However, in the eyes of Chen, these are just low-value-added orders, which does not mean that China's garment production has no advantage. “Chinese clothing accounts for one-third of global exports, and not only low-cost ones, but also high-value-added products. The advantages of China’s garment manufacturing still exist, and the future direction of the apparel industry must enhance its level of creativity. ”

To increase creativity and increase added value, companies need to increase their endogenous motivation. All of this will take time. It is clear that the old era of Chinese clothing, which was previously developed at a high rate of several tens of percent, has ended.

Stress 2: N-way transformation of export companies From the introduction of Chen Dapeng, we can understand that the form of clothing exports this year is not good. From the fourth quarter of last year to May of this year, the number of exports has been negative growth. Because the low-cost advantage is no longer, many export companies have also abandoned the production of low-value-added products, seeing the vigorous development of the domestic and domestic sales market, and the number of export companies that wish to transfer to domestic sales is not a minority.

However, after the experience many companies will find that export to domestic sales is not so easy. Chen Dapeng said: "More than half of China's apparel exports rely on quantity support. Once such companies are converted to domestic sales, a series of factors such as R&D, design, purchasers, and suppliers must be reconsidered. This is very difficult."

Frankly speaking, Chinese garment companies still have a long way to go in terms of research and development, but they also indicate great potential. Compared with export enterprises, domestic companies need to spend a large amount of money to make the company more embarrassed, and the cooperation between export companies and domestic brands may be a better way. "Foreign trade companies have very good processing capabilities and certain design capabilities. If they can cooperate with domestic brand enterprises, it is a very good idea." As the executive vice president of the China Garment Association, Chen Dapeng saw a lot of transformation of export-oriented enterprises. The success and failure, so he does not favor the transformation of export companies to do the terminal brand. “There are also many companies that have transformed their brands into foreign companies and lost tens of millions of yuan but have failed to achieve results. If export is a smooth road, then domestic sales are more like climbing, which requires good constitution, good equipment, and science. Methods."

Obviously, the transformation of foreign trade companies to do branding is a train of thought, but it is not the only way of thinking. China's garment manufacturing industry has entered a new period of development. Enterprises should consider the next step in the development of the brand.

Pressure 3: At the end of the market, the deduction of points at the end of the market must be a matter of pressure for fair export companies to switch brands. Domestic brands are also under pressure. Some people say that when they see the same clothes of the same brand abroad, the foreign price is much cheaper than that of the domestic market. A large part of the profits are given to domestic shopping malls. The bottom-line deduction for domestic shopping malls is a huge nightmare for apparel brands. In the past two years, the prices of clothing in shopping malls have been rising, and the growth rate has caused many consumers to scream for food. In fact, it is not only buyers but also brand owners who can't afford it. A few days ago, when a reporter from the “clothing time” interviewed the marketing director of a clothing brand, she said: “I don’t particularly like to come to the mall to buy clothes because I know that a large part of the price is given to the mall and it’s really attached to There is little value on clothes."

In the face of the problem of deduction for security, Chen Dapeng said that this is an old problem, but the old problem also needs attention: “The mall has a high asking price. This is a problem in the market. There are problems in the market. There is nothing wrong with this. But what we want to emphasize is that The shopping mall must give fair treatment to all brands." Chen Dapeng has been emphasizing fairness. "The international brands and domestic brands in the mall should be treated equally. The country should further regulate the market order, and the mall should not be because of the international brands and Considering the difference between domestic brands, this is what the association should call, and the media should call for it."