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    Garment Industry: Re Examining The Status Quo Of OEM Processing Industry

    2011/9/27 10:08:00 81

    Present Situation Of Garment Processing Industry

    Borrow Ma Yun, President of Alibaba, a statement: "today" is very cruel, "tomorrow" is more cruel, but "the day after tomorrow" is beautiful. I hope our local brands can stick to it and strive to see the "Sunday" morning sun.


      Since 2011, one obvious phenomenon is the local brand Three lines and four line markets have been opened up.


    The writer lives in Liyuan Town, Tongzhou, Beijing, and is a truly "township" administrative area. It turned out to be the countryside. In the past two years, this area suddenly started to bustle. First, "dear friends" and "blue island" were opened one after another. Then, at the beginning of this year, a restaurant on the opposite side of blue island mansion was suddenly shut down. After asking, it was turned into a clothing store by a wealthy clothing dealer. A few months later, shops such as "361", "Mei Bang" and "Semir" opened one after another. At the same time, the newly opened blue island mansion has some Chinese and foreign brands such as brother, Ya Ying, ONLY, VERO MODA and so on.


    As mentioned earlier, international Luxury brand The store has opened to two or three tier cities in China. Correspondingly, China's local brands have successively opened up three or four line cities and even township level administrative districts.


    This is also a response, though it is a passive response. At this time, the most important thing for local brands is to survive.


    In the high-end market, local brands can not be hard pressed for luxury brands that are invaded abroad. In the low-end market, local brands should take advantage of their own channels, culture and home advantage to take the route of differentiation and strive for survival opportunities for themselves.


    This point, Zheng Yonggang, chairman of Shanshan holdings, has long seen: "the so-called luxury goods have been historically positioned, and Chinese clothing can not reach this height in the short term."


    " European and American brands We are already preconceived, and we are more of an onlooker for local luxury goods. Zhang Zhifeng, chairman and art director of the northeast tiger, said: "Chinese brands lack culture, not history, nor quality, but the brand itself. International brands have a long history of development, while Chinese brands are only about twenty years old."


    Lang Xianping, a famous scholar, should attach importance to the view of clothing brand. "The so-called brand is the result of the successful operation of a product, rather than a means."


    The reason for this is the acquisition of brand fever in recent years. "Some of our national entrepreneurs see their shoes and clothes, and hang up a Italy brand. The price will rise tens or even hundreds of times. I think the secret lies in the brand, and feel that buying a ready brand is all right. But the opposite is true.


    Professor Lang's statement is not without reason. Some of our national enterprises only see that brands can bring sales, but fail to see the hardships behind the success of foreign brands.


    Similarly, Wang Zhuo, Secretary General of the China clothing association, said: "compared to creating luxury goods, I think Chinese clothing is easier to get through. It should be the way to learn American fashion and take popular trends."


    Foreign brands have inherent brand advantages and policy advantages. They occupy the best areas. In some cities, in some places or even in stores, rent free, free decoration and so on. The reasons for this situation are policy factors, consumer factors and public opinion. It is not a matter of two days in a day.


    For local brands, keep a low profile, keep their bottom line, first seek survival, and then seek development. In this regard, such as white-collar, northeast tiger brand, its own consumer groups are relatively fixed, not easy to be affected. However, for some brands with a price of around two thousand or three thousand yuan, it will be more difficult to survive.


       In addition, like the United States, the advantage of the logistics system can be divided into "fast fashion" market.


    When Metersbonwe clothing just entered the market, its main competitors were JEANSWEST, Giordano and so on. Metersbonwe has become the leader of domestic casual wear series for several years. After Metersbonwe's listing, competitors are no longer just local brands. They have targeted the leaders of the international fast fashion industry such as H&M and ZARA.


    In the United States, people in the 25 to 35 age group are still wearing a blank dress, and the clothing needs of these people have not yet been fully developed. It is reported that most people aged 25 to 35 have already joined the work, so Metersbonwe will then excavate the clothing needs of this group of people, positioning them in young, fashionable and business office workers.


    It is understood that most of the funds raised by Metersbonwe will be used for the construction of marketing network, which means that Metersbonwe terminal channel, which ZARA has always envied, will exert its strength again. When ZARA is "fast fashion", there is still room for local brands. {page_break}


      Finally, when it comes to local brands, there is another topic: OEM.


    Ms. Fang has recently been very upset. She spent 1960 yuan on her Coach purse in a store just now, and it turned out to be "Made in China". "I knew it was made in China, so I might as well buy a homemade wallet," Fang said.


    It is strange that the Chinese do not want to buy "made in China", but this is a fact. There are reports that 80% people are unwilling to pay for "made in China".


    The industry is generally positive about doing OEM foundry. According to this view, China can act as a substitute for luxury goods. It can be said to be "one way or another": it can not only earn processing fees, but also solve employment problems, and more importantly, it can learn advanced production technology and management experience of foreign brands through OEM.


    The first two interests are self-evident, and the last one also has successful examples. For example, the domestic know that the high-end brand "northeast tiger" is to make OEM first and then create brand. The "wheat bag", which has been selling well on Taobao, has long been a foundry for Mickey and Goldlion, making confidence and starting to create its own brand.


    No matter from the angle of clothing industry or from the angle of national macro economy, we should also see that "moving from OEM to independent brand" is not an inevitable process. Moreover, after the 2008 financial tsunami, OEM's life became more and more difficult. Intensive production tasks, meager processing fees, so that processing enterprises do not breathe at all. Some enterprises do OEM only in order to win export tax rebates. And every time the tax rebate policy is adjusted, all foreigners will get rid of the benefits. Then, OEM enterprises clamor to raise the tax rebate rate. The result is like drinking seawater to quench thirst, drink and thirst more.


    Earlier, financial commentator Ye Tan published an article in the Oriental Morning Post that "China's manufacturing industry is just a manufacturer of silent poverty behind the luxury brand. China is more luxury than the foundry, and it will not become a share of wealth."


    China is a developing country, but China's luxury consumption growth is the highest in the world. China has become the world's second largest consumer of luxury goods. The Ministry of Commerce predicts that by 2014, China will become the world's largest luxury goods market, accounting for about 23% of the world's total.


    This is the gospel of global luxury brands, but it is not a gospel for China to boost domestic demand, nor is it the gospel of China's clothing industry.


    A developing society needs a gradual increase of consumption, rather than a market that is separated by low-end and high-end consumption. China's consumer market is becoming more and more unbalanced: first, the total retail sales of consumer goods are rising, but the proportion in GDP is decreasing; two, government consumption is increasing, while household consumption is decreasing, and urban consumption is greater than that of rural residents.


    No progress has been made in the consumption of the general public. The growth rate of luxury consumption is thriving. This shows that China's distribution mechanism is unbalanced. Through the distorted income tax policy of "robbing the poor and helping the rich", a group of groups such as capital and real estate market get rich overnight.


    Not long ago, Prada listed 16 billion in Hongkong. Some netizens commented: "foreigners used to pay money, Chinese people processed and sold back to Chinese. Now it's a good thing to turn money into Chinese. " This is not just a simple joke. {page_break}


    "If the prosperity of luxury consumption becomes the symbol of the rise of China's domestic demand after the sound economic and cultural development, we applaud it. Now it has become a symbol of the gap between the rich and the poor and the sluggish domestic demand, which is deeply worrying." Ye Tan's worries are also believed by many people of insight in the industry.


    Therefore, from the point of view of clothing industry or from the perspective of macroeconomics, we should reexamine the present situation of OEM processing industry.


       In the end, do you want to do OEM? If you want to do it, what should you do?

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