Several OEM Forms Of Revealing Luxury Goods

In the face of the huge Chinese market, the attitude of luxury goods manufacturers is very "ambiguous". On the one hand, some luxuries are actually produced in China; on the other hand, luxury goods refuse to acknowledge that they have been subcontracted in China in order to maintain an honorable image.

To China, luxury goods manufacturers show a complex mood. On the one hand, they want to avoid it. On the one hand, they want to avoid it. What are the traces of luxury goods in China, because luxury goods have become extravagant when they were produced in China? 　　

The international top luxury goods represented by Prada remain mysterious in the hearts of the Chinese public. But a recent "Chinese company may hold Prada" news seems to shorten the distance between the 100 year luxury brand and China.

According to the reporter's understanding, the Prada side rejected the acquisition request of Shanghai businessman Lu Qiang on the grounds that "the Chinese takeover may change the brand style". Lu Qiang said in an interview with the media that he had bought Prada13% shares in a Italy consulting company which had bought 20 million euros. When he hoped to acquire more than 20% of the shares, he became the controlling shareholder of Prada. Prada learned that the consulting firm was behind the Chinese and suddenly raised the price, raising the stock price of the creditor bank, which could only buy 450 million euros, to 700 million euros.

Prada even announced in an E-mail form that no one of the Prada family members would sell it to Lu Qiang, a Chinese businessman. The 94.9% stake of the company is still controlled by the husband of the Prada family and Prada granddaughter, while the remaining 5.1% share is controlled by the joint Italy St Paul bank.

No matter how Prada knows about the "Chinese style", China, as a luxury consumer country, has no doubt about the significance of Prada. There were even media reports that many luxury companies, including Prada, have foundry factories in China. If the news is true, Prada's handling of China's related problems is extremely contradictory.

In July 15th, Wang Qiang, a lawyer from Guangdong, who was a legal consultant for many garment processing enterprises, told the reporter of "rule of law weekend" that many of the enterprises he served were OEM for luxury brands (including Prada). "This is not new in the industry."

The truth of Prada foundry is hard to distinguish.

Reporters at The Peninsula Beijing Hotel Prada store, the shop staff told reporters that all goods sold in the shop were purchased from the original factory in Italy. When asked if there was a foundry factory in Prada in China, the staff member said, "listen to the grapevine, the company has a foundry factory in Dongguan, but it is only for shoes, and it is only accessories for shoes."

After calling the China headquarters Prada Trading (Shanghai) Limited, Prada, the operator of the company said that it did not need to communicate with the media if it heard about the contents of the interview. "If the matter is serious enough, the public relations department personnel will make a statement to the media on their own initiative", and refuse to transfer the phone without providing the real name of the staff of the public relations department.

It has been reported by media that the xingxiong shoe factory in Dongguan, Guangdong, may be a Prada foundry factory. It is also known as the "Xingang Industrial Park", which is about ten minutes away from xingxiong shoe factory. The workers say that the shoes they produce include Prada, and they are finished shoes and all exports.

The reporter found a shop on Taobao that claimed to sell luxury goods. The owner of Bangkok, a pseudonym, wrote in the store code that the products of this shop are authentic, which is the final form or model of the Chinese luxury brand. As manufacturers do not work outside the handbags, they can not provide all the external packaging and small ticket of the counters, and can not provide subsequent warranty services. The brand of this shop includes Coach, Burberry, Hugoboss and so on. It has sold Prada's wallet before, but Bangkok told reporters that the goods of Prada are getting harder and harder to get.

Bangkok said that there are some channels to take delivery of goods in the factory, but it is not easy to disclose. But Prada does have some factories in China, but basically they are semi finished products. They should be transported to Italy for marking (printed with MadeinItaly labels), so "Prada products that are not received in the special store are more likely to be genuine."

Several OEM forms of luxury goods

Unlike Prada, veteran brand Italy luxury brand Armani has publicly stated that some production lines are made in China. After the financial crisis in 2008, the number of luxury goods moving to China in order to reduce costs has also been increasing. Tianjin JINDA Clothing Co., Ltd. publicly stated on its website that JINDA is the only manufacturer of Pierre Cardin Menswear, and also the processing base of many world-famous brands such as Armani, CK, Reporter and so on.

Ceng Mingyue, a researcher at the Cheung Kei luxury Research Center, University of International Business and Economics, told reporters that the top luxury items are Pyramid routes. Under normal circumstances, the top products in Pyramid are completely high-end and produce very little, but some brands will also develop products that the public can afford, such as perfume and scarves.

"There are also some brands that have multiple production lines, and the product line at the top of Pyramid is definitely in the place of origin." Zeng Mingyue told reporters. Zeng Mingyue told reporters that there are several forms of general luxury goods in foreign OEM: one is the production of finished products abroad, such as Armani has seven production lines, the top GiorgioArmani is produced in Italy, part of EmporioArmani is produced in China, one is from overseas enterprises part of the process of production, "I once went to Japan with a Chinese business owner to look for embroidery craftsmen, and later found that the craftsman who worked with us also provided Chanel hand embroidery business"; finally, it completely authorized the operation, for example, Pierre Cardin authorized many Chinese enterprises to produce some low-end products, such as down garments and socks.

In fact, outsourcing or finding OEM is risky for luxury goods, which will affect the overall image of the brand and even the company's business. Such a practice will indeed reduce costs, and may raise low-income people to become high-end brand consumers, but it will also dilute their brand value. Zeng Mingyue explained that before and after 1994, GUCCI had outsourced a part of it, but the enterprise even went bankrupt. "After all, luxury goods are not fast products and should not be popular."

However, Wang Qiang told reporters that it is not easy to do the job as a substitute for luxury goods, because luxury enterprises are very strict with the quality control of the foundries. Every generation factory will have special quality control personnel. "Now there is even a specialized QC (quality control) Company in Shenzhen, which serves for the OEM business of the big brands."

"There are tens of thousands of processing enterprises on this side of Guangdong, and dozens of people can do the same for luxury goods." Wang Qiang said. {page_break}

Luxury goods' fascination with origin

Zeng Mingyue told reporters that in the luxury industry, it is very particular about COO (CertificationofOrigin), and "origin determines product positioning". However, there is no general rule of origin in the world to specify the requirement of "MadeinItaly" or "MadeinFrance" on the product.

Referring to Prada's refusal to buy Chinese enterprises, Zeng Ming said it could be understood, "because the impression that China is making to the world is cheap, cheap and not honourable".

Honorable, it is precisely these luxury brands can create a brand image, in order to create a sense of distance and nobility. Zeng Mingyue told reporters that she had heard of a case when a person found that he had printed "MadeinSpain" on his LV bag. He was very angry that he thought the bag was not honourable. "In fact, Spain is also a big country in leather manufacture. But when consumers saw that the French brand was not produced in France, the sense of respect for the bag was greatly reduced."

"It is not that who is good or who is not good, but the brand of luxury goods and popular routes is only managed under different business models." Zeng Mingyue added that the quality of Chinese products has completely integrated with the world, but the impression that China has made to the world has not changed.

"However, luxury brands generally hide their production processes very deeply. Everyone knows that Chanel and LV headquarters are in France, but few people should know where their factories are. Ceng Mingyue said.

Even the above mentioned Xingxing shoe factory, which may be a foundry for Prada, is relatively concealed and strictly managed. It is reported that every entry and exit of the factory is guarded by security, and the number plates must be worn in and out of the factory. All suppliers are not allowed to enter after four p.m.

The article entitled "the dispute between Li Heng and Dongguan Daling Shan xingxiong shoe factory and Heshan Yi Gao Shoes Co., Ltd." is a contract between Li Heng and xingxiong shoe factory. It signed a confidentiality agreement (including competition restriction clause). It agreed that Li Heng could not cooperate with herself or engage in cooperation with the third parties within third years from the date of termination of labor relations with xingxiong shoe factory, or be employed in (including serving) third parties engaged in similar products or similar businesses with xingxiong shoe factories, or similar products or businesses with competitive relations or other interests with xingxiong shoe factories. Reporters found in the survey

Xingxiong shoe factory found Li Heng worked in the company shortly after leaving in May 2006, and commissioned a lawyer to send a lawyer's letter to Li Heng and Yi Gao in January 4, 2007. He asked Li Heng to abide by the agreement on the competition agreement in the confidentiality agreement and the consequences of prompting the breach.

Such confidentiality measures are rare in general shoe factories.

Wang Qiang told reporters that some of the enterprises he served had made luxuries products and then sold them directly to the Chinese stores. The labels on the products were "MadeinItaly" or "MadeinFrance". At the same time, a small number of products were sent abroad to bid for them, and then shipped to the country for clearance certificates to confirm to consumers that the products were imported from abroad.

In response, Zeng Ming Yue said that this should not be the top luxury item. Liu Wenxian, an international brand introduction center in China, also said in an interview that although it is not an industrial standard or a unified international rigid regulation to comply with those conditions, the label of "MadeinItaly" should be pursued. At the very least, it is necessary to ensure that the core technology of the product is made in Italy, and the main raw materials are also from Europe before it can be labeled "MadeinItaly".