China’s clothing practice economies of scale

China’s clothing practices economies of scale

When it comes to vertical integration, it is actually an asset-heavy strategy. Take the upstream selection of clothing production as an example. During the economic crisis, it can reduce costs and obtain a high-efficiency supply chain through its own “heavy” approach.

Under the current economic situation, compared with the light-asset strategy, the heavy-asset strategy is more suitable for Chinese garment companies with industrial economic strength, because they are more transformed from product processing and manufacturing.

Youngor: an early practitioner of “vertical industry chain”

The famous economist Lang Xianping said that the practice of “vertical industrial chain” often appears in times of economic crisis, so it must be promoted and abandoned. However, he believes that fundamentally, for a clothing company, having a “vertical industry chain” that is too long is not a bad thing in itself. As long as management is strengthened, the power of this system engineering will be far better than that of other companies “going it alone.” Youngor’s reputation as a “vertical industry chain” has long been known. When it was founded, some people complained: “The path Youngor is taking now is, to put it more fashionably, to build an industrial chain, to put it more unspeakably, to be small and complete.” “It should also go to herd sheep, because the wool is also its own.” Well produced.”

Youngor disagreed with this and said, “It will work.” Recently, Zhejiang Province’s newly released “Zhejiang Province Brand Building Situation Report” shows that Youngor Group, which owns multiple brands, has become an enterprise with the highest brand value in Zhejiang Province with a value of 9.2 billion yuan.

Look at what Youngor has done in these years. It jointly built a washing plant with Japan’s Kodachi and got involved in the printing and dyeing field; it spent US$100 million to build a textile city, and established a joint venture with Nisshinbo and Itochu to establish Japan-China Textile Printing and Dyeing Co., Ltd., involved in yarn dyeing, weaving, printing and dyeing and other businesses; it invested 15 100 million yuan to build Yike Accessories Industrial City to provide supporting accessories products for Youngor; established a joint venture with Itochu and Hong Kong Youth International Holdings Co., Ltd. Wool Textile Dyeing and Finishing Co., Ltd. to provide supporting wool spinning raw materials; through investment in the Textile City, acquired Xinjiang Xinmian Group 11.2 Ten thousand spindles of cotton yarn production capacity…Through the above series of project investments, Youngor has basically completed the vertical integration of its upstream business. The relevant person in charge of Youngor said that the reality of China’s clothing industry determines that they must make this choice: “The purpose of Youngor’s upstream business is not to make money, but to save money.” Under the economic crisis situation, Chinese clothing companies with strong asset support choose vertical The industrial chain can not only save money, but also promote industrial mergers and integration.

As a representative of the National People’s Congress, Bosideng President Gao Dekang also said at a public event in Beijing recently that amid the economic crisis, Chinese clothing has reached a golden time for adjustment and revitalization. He believes that heavyweight clothing manufacturers with industrial influence should also try to increase fabric research and development efforts, focusing on the innovation of fabric concepts, innovation of fabric technology and innovation of fabric mechanism, and these three innovations will fundamentally Improve the quality of Chinese clothing.

Asahi Kasei: Provide upstream options for China’s clothing industry to alleviate difficulties

In view of the current requirements of China’s garment industry and enterprises to cope with the economic crisis, some large international fabric manufacturers, such as Asahi Kasei, have also responded positively and made appropriate adjustments to the economic situation of China’s garment industry this year. Last week, Asahi Kasei Business Department Director Masato Narumatsu made a special trip to Beijing in order to better explore the path of industrial cooperation with China’s apparel industry amid the economic crisis. Our reporter exclusively interviewed him.

Narimatsu Masato told reporters: “Our actions in the Chinese market this year are directed at the huge team of fashion designers, such as continuing to hold the Designer Creativity Award. Because the decision-making power of fabrics of clothing manufacturers is in the hands of designers. In addition, we plan to work hard to forge the vertical industrial chain of clothing companies, cooperate with Chinese clothing companies, and help Chinese clothing companies achieve ‘self-sufficiency’ in fabrics.”

In terms of clothing fabrics and fibers, Asahi Kasei represents the first-class level. Now its Bemberg products have also attracted the attention of Chinese clothing manufacturers through endorsements by famous models and creative awards. In fact, a few years ago, Asahi Kasei Corporation began to focus on helping Chinese clothing companies move upstream of the “smile curve” in industrial economics.

For example, the Asahi Kasei China Fashion Designer Creative Award launch event signed with China for 5 years. This form of cooperation reminded reporters of the “Brothers Cup” that year. Japanese Brother sewing equipment also used the channel of clothing designer selection to enter China’s large and small clothing companies. The “Brothers Cup” has played an immeasurable role in promoting the product research and development of Chinese clothing companies. Many elites who have become the mainstay of product research and development in clothing companies today have become famous in the “Brothers Cup” competition. Narimatsu Masato said: “Vertical integration or horizontal integration of the industrial chain are two very important dimensions for the upgrading of the garment industry. When we cooperate with garment manufacturers, we realize that when garment producers carry out vertical integration of upstream and downstream, We need to consider the depth and breadth of integration. Among them, depth refers to the integration mode, such as mergers and acquisitions, strategic cooperation, etc., and breadth refers to the extent of integration. Garment manufacturers must calculate this account well!”

Returning to the current economic crisis, it is time for powerful clothing manufacturers to think about changes. Looking upstream, how can they have a say in raw materials? Do you want OEM, ODM, or your own brand? While looking at external costs, do you also look at internal costs? These are the starting points for the reporter to write this article.

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