Chinese Clothing Can No Longer Be Synonymous With "Making Hard Earned Money".

In 2008, China's manufacturing industry was not a very optimistic year. Under the pressure of RMB appreciation, labor cost increase and the deterioration of international economic environment, China's manufacturing industry entered the "winter" early.

As a labor-intensive garment manufacturing industry, the pressure is even greater. Many people are not optimistic about the prospects of the garment manufacturing industry. But Li Rucheng, chairman of YOUNGOR group, a leading clothing manufacturer in China, thinks that manufacturing industry is an eternal industry.

In June 24th, China Economic Weekly reporter came to YOUNGOR group.

Li Rucheng, who sits opposite the reporter, wears a white YOUNGOR shirt. He speaks with a clear tongue and a simple person.

It is in front of this simple Zhejiang farmer who spent more than 20 years leading YOUNGOR from a small factory with only 20 thousand yuan in assets to a large group enterprise with an annual sales income of about 18000000000 yuan.

Li Rucheng, who has been in the garment manufacturing industry for decades, knows the root of his old business. "Manufacturing is the foundation and the foundation. No good manufacturing industry, service industry, R & D and so on have lost the foundation.

Manufacturing is a very important industry for the whole world. "

Li Rucheng told China Economic Weekly that in Europe, every country and every region sees manufacturing as very important, but because of the rising cost, they have to pfer their base abroad.

Now the Chinese society does not seem to attach importance to the manufacturing industry. It is the low end of the industry that the manufacturing industry can not make money.

In fact, for China, a big country with 1 billion 300 million people, the manufacturing industry can solve most of the employment problems, and the manufacturing industry is only upgrading and upgrading, and there is no need to eliminate it.

"I believe manufacturing is eternal. The key is what products to make and what products to make."

Make shirts into luxury goods.

In recent years, with the change of economic environment at home and abroad, garment manufacturing industry, like other industries, is also facing enormous cost pressures.

In the international market, especially in the US, the consumption of the retail market is becoming increasingly flagging. Some garment suppliers have to pfer the market elsewhere.

Faced with this situation, YOUNGOR adopted 50:50's market strategy, that is, 50% of its products are facing the international market, and 50% of the products are facing the domestic market, so as to digest the pressure from all sides as far as possible.

"In China, the rise in labor costs is normal, and the key is whether products can be upgraded or not.

Not only the grade of the product should be improved, but also the value should be raised. Finally, the price will be raised and the profit of the product will be raised. "

Li Ru Cheng said.

According to the reporter, currently processing 1 shirts by proxy, the processing fee in Laos is US $0.5, some enterprises in Jiangsu can earn 1-1.5 dollars, and YOUNGOR can earn 2.5 dollars. If we are the top brands in the world, we can even get the difference of 15-20 dollars per piece.

In response, Li Rucheng said: "because we have the value of existence, the key is the product.

Now our shirts can be sold for 500 or 600 yuan, and the highest 2000 yuan is also available.

We will develop slowly to the high end in the future. This is a follow-up direction. "

Reporters at a YOUNGOR exclusive store in Dongdan, Beijing, saw a large proportion of shirts from 300 to 800 yuan.

"The price is a little higher, but the fabric and quality are all good. The cost performance is basically acceptable."

A customer picking shirts at the shop told reporters.

High prices must be based on high quality.

In recent years, YOUNGOR has invested 3% of its sales revenue as a technology development fund every year. It has developed VP series of shirts, DP cotton free ironing shirts and other high-end shirts.

New products account for more than 70% of the products put into the market every year.

Among them, DP cotton free ironing shirt has become a special product of men's wear market in recent years. Its unique properties such as wrinkle resistance, moisture absorption, easy drying, easy decontamination, good ventilation and durable shape make it occupy a favorable position in the national sales competition.

Since 2005, the gross margin level of YOUNGOR has been above 40%, far higher than the industry average (the weighted average gross profit margin of the listed companies in the first three quarters of 2007 was 14.06%).

According to the data provided by the China National Business Information Center, YOUNGOR ranked first in the market share of shirt sales in 2007, compared with 14.24% of the market share. It is almost twice that of second conch shirts (7.21% of the market share).

Every link is branded on YOUNGOR.

"YOUNGOR's products also belong to the middle and high-end level, there is still a certain gap from the top level.

So last year we spent a lot of time on top products.

For his company's R & D, Li Rucheng said frankly, "our R & D is still at a relatively elementary level."

In his view, most of the R & D of Chinese garment manufacturers are followers of the world's top technology.

"But we should also attach importance to the innovation of our system. For example, we are now integrating raw materials, fabrics, production enterprises, sales and retail as an integrated industrial chain, which is a very good attempt for us."

By 2006, YOUNGOR has completed the construction of the entire industrial chain of the textile and garment industry, and built a huge industrial platform: the upstream cotton fields and spinning enterprises can guarantee the supply of high-quality raw materials for their enterprises, and their own yarn dyed and woolen enterprises can ensure that the design of the garment companies has their own raw material selection, while the terminal's marketing channel ensures the smooth sales.

It is understood that the current YOUNGOR 80% sales are done through their own channels.

YOUNGOR apparel has more than 100 branches in China, more than 400 self owned stores, and more than 1500 commercial outlets, and this figure is growing at the rate of 100-200 newly opened each year.

"If we have good channels, we will only have fluctuations within 10%, there will be no big fluctuations, strong seismic capacity."

Li Ru Cheng said.

Some people think that textile enterprises have to specializes in division of labor to do what they are good at when they want to develop.

But Li Rucheng believes that the world's industrial chain has different stages, and there are different levels of development.

In the next 5-10 years, YOUNGOR will combine market construction, channel construction and brand building as the focus of the company's development.

With the guarantee of raw materials supply, production and sale, Li Rucheng began to look abroad.

"The year before last, we introduced the first batch of shirts from abroad, and we sent 200 thousand pieces last year. Tens of millions of dollars were returned to us this year.

This is a good combination of upstream and downstream industry chains with raw materials and fabrics. "

International Merger and acquisition is the first step in brand internationalization.

In January 22, 2008, YOUNGOR announced that it purchased the new Malaysia group, which is the core business department of KELLWOOD's Menswear, with us $120 million net assets.

KELLWOOD is one of the five largest clothing giants in the United States, and its men's clothing business takes Hongkong Xin Ma group as its main body.

After the merger, YOUNGOR acquired 14 production bases in Sri Lanka, Philippines and China's Guangdong, Jilin and Shenzhen, including the more than 20 famous brands ODM (processing) business, including POLO and Calvin Klein, including five authorized licensing brands such as Nautica and Perry Ellis, as well as the top teams with decades of experience in international brand management and design experience, sales channels to hundreds of department stores in the United States, and a strong logistics system to ensure smooth flow of products into department stores.

As a giant in China's textile and garment industry, YOUNGOR's brand internationalization has taken a substantial step.

According to Li Rucheng, after the merger, YOUNGOR's clothing production capacity will reach 80 million, becoming the world's largest men's clothing business.

CICC's recent research report on YOUNGOR shows that in 2008, the net profit growth rate of YOUNGOR textile and garment sector is expected to reach 28.5%, of which 11% comes from the new Malaysia.

In the 2009-2010 year, the integration of new horses and the development of brand retail industry are expected to promote YOUNGOR textile and garment business to gain about 20% profit growth.

Li said that M & A is a new attempt to acquire the new Ma group and master its marketing channels. YOUNGOR can quickly enter the mainstream market of the United States and play the national brand, which is in line with YOUNGOR's long-term goals.

"But the integration of sales, production management systems and YOUNGOR systems in New Zealand needs a process, and the two sides need to merge slowly."

Li Rucheng told China Economic Weekly, "we need to make Chinese enterprises explore overseas. There are not many successful cases in China. I want to make a success."