Shanghai Clothing Export Orders Increase Profits But Compression

A few days ago, the great Hongqiao of Shanghai

Although the financial crisis is gradually dissipating, the export of textiles and garments in the first half of this year has been exported to US $7 billion 592 million, an increase of 12.15% over the same period last year, but the increase is far below the average increase of 21.35 percentage points in the same period. The proportion of textile and garment exports to the whole city's exports has dropped to 9.09%, down 1.67 percentage points from last year.

The survival of clothing and apparel exporters is now an open secret.

Where is the future of Shanghai's foreign trade enterprises?

Wandering at the crossroads

The general manager of a private clothing export enterprise was asked about the moment.

According to the survey, at present, more than 30 thousand foreign trade enterprises with import and export performance in Shanghai, the proportion of foreign trade enterprises with little or no manufacturing function is gradually increasing, because the production and labor costs continue to increase.

A large part of Industrial and Trading Company and industrial self export enterprises, which were born in the 80s and 90s and characterized by the combination of industry and trade, have now evolved into pure trading companies, just like past professional foreign trade companies in Shanghai.

Earlier, the reporter visited a well-known Industrial and Trading Company in Shanghai. The head of the company told the company that there were more than 20 wholly owned or controlled textile and garment factories in the past.

But even so, business is still very difficult. Last year's net export interest rate was only 0.7%.

Textile and clothing have always been the most important export commodities of Shanghai's foreign trade. Under the difficult conditions of financial crisis, the textile export of Shanghai city is still up to 15 billion 266 million dollars last year, accounting for 10.76% of the total export volume of the city in the year, and the second largest export commodity after Shanghai's information and communication products.

Although the textile and garment industry is a traditional industry, it is not a sunset industry. No matter international or domestic, there is always a market for textiles and clothing.

However, for most of Shanghai's foreign trade enterprises, they are now wandering at the crossroads, continuing to export and living space getting smaller and smaller.

Innovation ignites hope

Wang Xinpei, deputy director of the Shanghai Municipal Commission of Commerce, recently told reporters that as China's largest trading port and building an international trade center, what is missing is not physical strength but mental strength.

He explained that textile and garment exports as an example, now almost everywhere are OEM processing, earn a little hard, "physical" money, Shanghai enterprises can no longer do this, this is not the direction of Shanghai.

The hope of Shanghai's export is to rely on "brain power" and innovation.

Unlike industrial production, how should foreign trade enterprises abandon their "physical strength" to innovate?

In an office building in Pudong, Lin Yuhua, general manager of Shanghai Xinta International Trade Co., Ltd. introduced the process of changing from foreign trade agent export to ODM (original design manufacturer).

Like most of the foreign trade companies in China, the company has been a "setter" company for a long time, that is, to produce and export to the domestic factories according to the woolen knitted apparel samples from foreign enterprises.

Due to the lack of core competitiveness and the increasingly fierce competition at low prices, the company urgently needs to solve the way out.

At that time, there were three ways before the company. One was to run factories on its own and take the road of integration of industry and trade, but it needed a lot of investment and excellent production management personnel.

Two is to engage in foreign trade agency services, but because of the risk and not easy to control, it has also been denied.

Three is to strive to become China's most powerful wool knitting resources integrator, the core content is to engage in ODM, to provide international buyers with design, proofing and other extended services.

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Since 2005, the Confederation has started building its own design and Research Center for wool knitted garments, and has been designing cooperation with 5 universities in Beijing Institute Of Fashion Technology.

In the past, the company's ability to receive orders was weaker because basically it was designed and patterned by foreign buyers. Now, from the selection and design of fabrics, fashion colors and styles, the services provided by the company are greatly enhanced.

Compared with 5 years ago, the average export profit of the wool knitted garment increased by nearly 6.

Doing export business is not something that some people imagine to go all the way to such a bag business. It seems that it has nothing to do with innovation.

As a latecomer, Shanghai New Union textile import and Export Co., Ltd. has also tasted the sweetness of innovation.

Since last year, the company has set up proofing centers, design centers and fabric research and development centers.

Last autumn's Canton Fair and this year's China Fair, the new textile designers carried their own design samples to the booth, and foreign buyers with sensitive smell immediately came to the talks. Buyers from Britain, Liechtenstein and other countries also placed orders, and their prices were somewhat higher than that of OEM (OEM).

And "Mr. Sai" leads the way.

Although China's foreign trade export is the first in the world today, the number and amount of its export are the highest in the world, and it can not be equated with the core competitiveness.

Earlier, when interviewed by a number of foreign trade companies, the reporter felt that the reason why most foreign trade enterprises were hesitant was the lack of some support.

It is like reinforcing steel bars instead of cement to support high-rise buildings. Supporting the strength of foreign trade enterprises should be "Mr. Shi" (Technology) rather than low-cost bidding.

It should be noted that after years of sustained and rapid development, China's exports are still mostly traditional labor-intensive commodities, and its technology content and added value are relatively low, and are at the low end of the export value chain.

At the same time, China's foreign trade is at the cost of resources and energy consumption higher than the average level of developed countries and the greater damage of the environment and ecology. Moreover, the share of many export commodities in the world market has reached a higher level, and it is difficult to maintain the high growth rate in the past.

Therefore, if we can not support exports with science and technology as developed countries, our foreign trade enterprises will have difficulty in grasping their own future.

It is in view of this crisis that 11 years ago, Shanghai Silk Group Co pioneered the establishment of a technology center in Shanghai's foreign trade enterprises. It invested millions of yuan to tens of millions of yuan a year, providing strong technological support for the export of enterprises.

For example, the establishment of a national accreditation laboratory accredited by CNAL to carry out textile testing services and garment appearance inspection services has been recognized by various countries and most of the multinational companies. A textile research and development center has been set up to develop new woven fabrics, such as wrinkle resistant, waterproof, anti fog, flame retardant, antistatic and UV resistant functional fabrics, so as to support the external orders of various business departments. A fashion design proofing center has been set up. Last year, the design proofing center has designed more than 3500 new styles of clothing, 17 thousand and 500 samples and 10 million garments export.

Last year, the profits earned by the silk group company's export in the form of ODM accounted for 70% of the total profit of the enterprise, while 80% of the profits of the company 5 years ago came from OEM.

It needs to be explained that the average export profit margin of OEM is only one third to one fourth of ODM.

In addition, the silk company has also set up a team of 69 people for quality evaluation and control.

At present, R & D and technical services not only cover the entire enterprise, but also have begun to open to the society. For example, a French company has commissioned the silk company to develop and design 400 new samples.

The government should teach people to fish.

From Shanghai itself, the international trade center is not only an increase in trade volume, but also a more important and urgent task is to improve the quality of foreign trade and the successful pformation of foreign trade export development mode.

Of course, enterprises are the main body of the market and the main body of the construction of the international trade center. However, the pformation of Shanghai's foreign trade enterprises is also inseparable from the role of the government.

The role of the government should be mainly embodied in environmental construction and policy guidance, but it can not be separated from specific supporting measures.

Just like teaching people to fish, the duty of the government is not to go all the way to catch fish, but to teach people how to catch fish.

Similarly, to help foreign trade enterprises to pform, the past practice is often subsidized by overseas exhibitors and trade promotions. Although their actual effects are somewhat, they are not obvious.

Since last year, the Municipal Commerce Commission has focused on helping foreign trade enterprises to establish design proofing centers, helping 21 foreign trade enterprises to enhance their competitiveness in the international market.

Obviously, this effort has limited strength and limited financial resources to the knife edge, prompting some enterprises to begin to change the direction of trade innovation.