There Are Still A Few Laughs In The Face Of Cost Pressures In Yueqing'S Apparel Industry.

Rising raw materials, increasing labor costs and financing difficulties.

Yueqing has the title of "China's leisure clothing city", "China's electrical appliance capital", "China's electronic components production base" and "China National drill bit (construction industry) industrial base" and so on. Recently, the newspaper Economic News Department went into clothing, electrical appliances, electronics, drill bits and other industries, listened to the voices of entrepreneurs, professional managers and workshop staff, and reflected their survival status from their feelings and experiences, and narrates the expectations of various industries from the beginning of the year to the current situation.

Yueqing, known as the "famous city of leisure wear in China", has not only reduced the number of garment enterprises in recent years, but also the pace of clothing enterprises' "going forward" is becoming slower and slower.

Facing the enormous pressure of survival, what is the current situation of Yueqing's clothing industry?

Raw materials increase profits decrease

"At the height of the garment industry, there are more than 300 large and small garment factories in the town of Guang pan. Now there are only more than 20 garment enterprises in the famous clothing town."

During the interview, the heads of many garment companies lamented that the clothing industry was not easy to do.

After 2008, there are some small garment factories in Yueqing every year because they are unable to face the increasingly fierce competition and have been eliminated from the market.

Among them, the increase of raw materials and the reduction of profit margins are important reasons.

A boss who made the clothing processing business counted out a suit for a reporter: a suit of about 80 yuan, the cost of fabric needed 30 yuan, the cloth 10 yuan, accessories, zippers, buttons and so on, about 10 yuan, the processing fee was 15 yuan, plus other expenses, a garment can earn six or seven yuan now very well, and last year such a garment's profit can be in 12 yuan.

"The price of button has increased by 2/3, and the cost of each garment has increased by 10% this year."

Lin Furong, director of Yueqing Jingzi Garments Co., Ltd., said that the profit margins of enterprises were squeezed, showing a downward trend.

Chen Hanchun, Secretary General of Yueqing Garment Association, said that the enterprises that were eliminated were often smaller and had a single business mode.

At present, there are more than 140 garment enterprises in the city. In recent years, they have adjusted their industrial structure and production and marketing structure, from the original pure processing mode to the current OEM based business mode, and the profit margins have improved considerably.

Recruitment is difficult to affect orders.

The job hopping of the workers in the clothing factory is very common, the boss wants to think of the way to keep the man.

Under such circumstances, workers' wages are rising.

"Making clothes is too bitter, delicate and complex. In summer, it has to face high temperature irons and other equipment. Many people do not have the willpower to persist and do not want to do it."

Lin Furong said that when the company had the largest number of employees, it reached more than 300 people, and now only 200 people are left.

"Workers' wages have risen by 10% to 15% this year."

Zhu Zengshao, a snow Valley Group in China, said that the monthly salary of the company's general practitioners this year is 1800 yuan plus royalty, which is about 200 yuan a month, and it provides free accommodation. Last year, the minimum wage of general practitioners was 500 yuan / month this year, and the company has a heavy burden on staff salaries.

A worker who has been engaged in clothing production for many years told reporters that last year, a garment factory went bankrupt, and many of the same business owners came in to rush to the staff to maximize their frenzy.

Ye Jilong, deputy general manager of Yueqing Han Bang trousers industry Co., Ltd., said: "because of the unsaturation of the number of employees in Yueqing's clothing enterprises, the scale of the enterprises is limited, and the situation of the loss of orders is common."

Survival by OEM production

Ge Xinglong, director of Yueqing SA Feng Clothing Co., Ltd., lamented that their enterprises specialize in pure processing business, and they can not earn much money in one year. If they change the OEM, they need to invest a lot of money to hire designers.

A small factory can not afford to toss up, do not want to do.

In the fall of some garment enterprises, Yueqing Han Bang trousers industry Co., Ltd. was founded in February this year.

Talking about the reason why the company is brave enough to go in the situation of everyone shouting "clothes difficult to do", Ye Jilong, deputy general manager of the company, said they have great confidence in the prospect of the clothing industry, so long as the finished products can be accepted by the public, they will succeed.

At present, they choose the way of OEM and cooperate with manufacturers.

Similarly, over 20 years ago, the Wenzhou rising Leopard Dress Co., Ltd. became a famous brand Heng Yuan Xiang in 2005.

The design samples of the company will be ordered only if the style is selected.

"We must be innovative in fashion style so as to be competitive."

The company manager Xu Zhe said.

A person in charge of the clothing industry who did not want to be named said that the profit difference between OEM and pure processing is relatively large. The profit of general processing is about 5%, and the profit of OEM clothing is about 10% to 15%. If the enterprise sticks to the original processing mode, the prospect will be even worse.

It's hard to start a brand.

Nowadays, the clothing of a brand counter in Yueqing times square has the products produced by Yueqing Han Bang trousers industry Co., Ltd.

Ye Jilong disclosed that if they produce a pair of trousers sold to the brand for 100 yuan, it will appear in Times Square at the price of seven hundred or eight hundred yuan, and the profit in the middle reaches seven or eight times.

For the Han Bang trousers industry, the net profit of the trousers is only 15 yuan.

In contrast, the generation processing enterprises are struggling to make profits, but profits are not comparable with brand manufacturers.

Therefore, the company intends to build its own brand and increase the added value of its products.

Chen Hanchun told reporters that creating their own brand is not a difficult task, but it is no easy task to start a brand, and it needs to invest a lot of continuous publicity funds.

In fact, as early as more than 10, China's snow Valley Group registered its own brand of snow Valley, but in the end, because it could not afford the large amount of advertising cost, shelved the brand and had to embark on the OEM based business model.

"If the strength of the company is stronger, we will concentrate on our own brand!" Zhu Zengshao, chairman of the company, believes that if clothing companies want to go longer, it is necessary for them to make their own brands.

The person in charge of many garment enterprises in Yueqing said frankly that if he created his own brand, though his profits were high, it would need more risk than OEM, such as business and sales. Besides, the most important point was that their enterprises did not have enough scale and enough funds to start their own brand.

Leaving the industry

In April this year, 6 Yueqing Yueqing garment enterprises and 2 electrical appliance enterprises jointly founded the snow Valley Group Zhejiang Investment Co., Ltd., including St. Burg Clothing Co., Ltd., Wenzhou Huatai Fashion Co., Ltd. and China snow Valley Group.

They extend the industry's tentacles to other areas such as real estate.

"Clothing enterprises have limited profits. We use it as a platform to accumulate connections or finance."

Zhu Zengshao, chairman of China snow Valley Group, told reporters that taking the real estate industry as an example, if developers invest in real estate projects for a total of 120 million yuan, investment companies can inject this capital, but they simply invest in capital and do not participate in all items or profits of their internal projects. Developers will pay them 20% to 30% monthly interest rates and collect accounts after 3 months.

"At present, we are running smoothly. According to this situation, we expect at least a few million yuan per person per year."

Zhu Zengshao said that this investment method is convenient and labor-saving, even exceeding the pure profit brought by the clothing industry.

A person familiar with the matter said that the diversified development of clothing industry has its advantages, but there are also some drawbacks. If too much energy and capital are invested in other industries, it will inevitably affect the development of the industry. The company leaders are unwilling to invest too much money in R & D and upgrading of enterprises, only to meet the huge returns from investment. In the long run, this has a negative impact on Yueqing's clothing industry.