Cashmere Industry In China: Who Has The Final Say?

Cashmere is the "golden nail" of the clothing industry. A mature goat can only pick 10 to 40 grams of cashmere every year, and it needs 3~5 sheep to dedicate to a cashmere sweater.

Prices are rising every year, but there is a strange phenomenon in China's cashmere industry. In the past 10 years, the export price of cashmere sweaters has gone up and down, and the adverse factors such as the rising land cost and the appreciation of the renminbi are pressing at the same time.

At the end of July, leaders of the domestic cashmere industry and leaders of the leading enterprises gathered in Nanjing to convene the summit of the mainstream brand of cashmere in China and explore the way to break the ice.

Nanjing, known as the three largest "stove", was raining heavily during the hot season of July. The "Cashmere mainstream brand summit" held in Nanjing in July 31st also sent a timely rain for the troubled cashmere industry.

"Made in China" is no longer news in the international market due to the lack of its own brand.

However, the international experience of Chinese cashmere products, known as "soft gold" and "fiber diamond", is still shocking.

In July 31st, China's food and animal products import and Export Chamber of Commerce and other five "country name" units held the "China cashmere mainstream brand summit" in Nanjing, and the message from the forum was thought-provoking.

The top more than 40 brands of Chinese cashmere industry attending the conference generally agreed that the development prospects of China's cashmere industry were not optimistic.

As Mr. Huo Jianguo, President of the food and Animal Import and Export Chamber of Commerce of China, said, the top executives of enterprises explore common problems encountered in the process of cashmere brand establishment and promotion, and find out how to find the general law of cashmere industry brand development.

China's cashmere resources occupy a global monopoly position. More than 2000 cashmere production enterprises actually control 93% of cashmere raw materials in the world, about 40000000 cashmere sweaters per year, and the output accounts for more than 75% of the world's cashmere sweaters.

However, in 2007, the average price of each Chinese cashmere sweater was only 30.58 US dollars, equivalent to only 200 yuan.

It should be said that China's cashmere products as the top natural textile raw materials in the international market experience, for China's exports of textiles and clothing, and even "made in China" is no lack of sample significance.

"Brand is not only a reliable product quality, but also has cultural support and brand management, which are never encountered by our enterprises," said Chen Tao, chairman of China National Snow Lotus group.

As a trademark of the cashmere industry in China, Zhang Zhicheng, CEO of the Erdos Cashmere Group, combed out various external constraints of cashmere brand: the industry did not form a cohesive force to resist the price negotiations of international buyers, single product, homogenization competition and so on.

Awkward monopoly industries do not have international pricing power. In 1996, the average price of cashmere sweaters exported in China was 37.89 US dollars per piece. In 2007, the average price had dropped to $30.58 per piece - Bian Zhenhu, vice president of the China Chamber of Commerce for the import and export of food and animal products, reported such a set of data.

"Golden armor" sold the land price, and China's cashmere enterprises went into an awkward position.

In fact, China's cashmere industry has been in the global monopoly position, and its output accounts for more than 75% of the world's total output, of which quality cashmere is more than 90% of the world's total, and exports account for more than 80% of the world's total. More than 3/4 of the world's cashmere consumption market is produced in China.

More than 2000 cashmere enterprises in China control 93% of cashmere raw materials worldwide.

Unfortunately, although China's cashmere industry has considerable strength, export prices have not increased at the same time. Instead, the export prices of cashmere sweaters have continued to decline due to intensified market competition at the low end.

Under the double pressure of RMB appreciation and domestic inflation this year, the average price of Chinese cashmere sweaters exported from 1 to May was only 32.5 US dollars.

This shows that the bargaining power of Chinese cashmere products in the international market has not been enhanced with the development of China's cashmere industry.

The reason is that China is at the lowest end in the global textile and apparel trade chain.

Bian Zhen Hu said half jokingly that the hard-working cashmere enterprises in China are doing "hard work", and foreign vendors can make more than ten times of their money by placing a brand on China's products.

When Huo Jianguo spoke at the meeting, he put forward that the brand is the core element of winning in the modern commercial competition.

Brand owns the market.

In today's international division of labor system, developed countries rely on brand and technology advantages to occupy the high end of the industrial chain and share the main interests.

The developing countries are losing a lot of profits in international exchanges because of their backward technological level and lack of independent brands.

At present, China's cashmere industry has actually become the "workshop" of raw materials and products for foreign enterprises.

The lack of brand is a fatal wound in China's cashmere industry.

The establishment of our internationally renowned brand has become the only way for China's cashmere industry to achieve self-improvement and create brilliance.