Domestic Clothing Enterprises Turn From OEM To Brand

According to statistics, from January 2012 to February, the total retail sales of 100 large retail enterprises nationwide increased by 6.1%, a record low, and the total volume of retail sales dropped by 4.23% year-on-year.

Just now, the information disclosure of this year's A quarterly listed companies and the 2011 Annual report shows that the profitability of textile and garment enterprises has dropped to single digits. In 2011, the net profit of shareholders belonging to the parent company was 12 billion 470 million yuan, an increase of only 2.16% over the same period last year, and the growth rate dropped sharply.

In these listed companies, a record high inventory has become a common problem in garment and textile enterprises this year. Data show that in 2011, the total inventory of 84 listed companies in textile, clothing and fur industry reached 70 billion 832 million yuan, an increase of 25% over the 56 billion 742 million yuan in 2010. Because of the continuous economic downturn, the domestic garment and textile industry has entered the era of "big inventory".

In the face of high cost pressures, the National Bureau of statistics released the first quarter of this year's economic performance data show that the economic downturn is over expected, the two or three industry accelerated decline, all of which make the domestic garment and textile industry further "add insult to injury".

　　 Inventory increase and order reduction

"Now prices of raw materials tend to be stable. Because of the sharp rise and fall of cotton prices last year, some enterprises have eaten a lot of raw materials at low prices. As a result, the impact of this year's domestic economic downturn and the reduction of orders have highlighted the problem of inventory." A textile enterprise manager told the China business newspaper reporter.

Data show that in the end of April this year, 84 companies listed in the textile and garment industry, 72 companies stock more than billion yuan; 12 companies inventory of over 1 billion yuan. Such as: YOUNGOR (600177) (600177.SH) (stock 2 billion 395 million yuan), Ordos (600295) (600295.SH) (stock 4 billion 633 million yuan), red bean stock (600400) (600400.SH) (stock 3 billion 523 million yuan), Huafu color spinning (002042) (002042.SZ) (stock 2 billion 52 million yuan), Bank of China (000982) (000982) (000982.SZ 2 billion 18 million).

On the other hand, the slowdown in sales has also become a major reason for the increase in the inventory of garment and textile enterprises. "Inventory is a common phenomenon in the field of clothing. The main reason for it is the market downturn, which is more than the manufacturer's expectations. According to industry practice, clothing is usually produced one quarter ahead of time, which requires a prediction of future market. " Baoding Ji Hongxing Clothing Co., Ltd. uniform factory director Xiao Guoxin told reporters.

Take Baoding Hongxing as an example, its main product is men's shirt, and raw materials are mainly purchased from spinning enterprises in Shandong and Jiangsu and Zhejiang provinces. "The price of raw materials has not changed much compared with that of August last year, but due to the reduction of orders, the purchase volume for upstream has decreased by 20%." Xiao Guoxin said.

In Xiao Guoxin's view, the main reason for high inventories is the rapid decline in sales. This trend is quite obvious in the sports clothing brand. This year, Lining, Anta and other domestic sporting goods brands showed signs of slow growth, and their share prices also plummeted.

A senior executive of Anqing new hundred department store also said: in the first quarter of this year, the general performance of retail industry was dismal. As for the department store industry, the decline of clothing sales was more obvious.

In fact, apart from the more famous sports apparel brands, the ordinary three or four line domestic brands are also under considerable sales pressure. Beijing Dahongmen clothing wholesale market is the largest clothing and textile distribution center in North China. In the three phase of the Dahongmen business city, Xiao Tang, a clothing salesman, feels that this year's clothing market is obviously not as good as before.

"From the perspective of intuition, the number of customers who buy clothing this year has not decreased, but the number of customers waiting for orders has been reduced, and the volume of actual orders has decreased." Miss Tang told this reporter.

Miss Tang works at a small stall about 6 square meters. It opens at 4 in the morning and closes at 10. In Dahongmen, this wholesaling booth is called "morning market". "Last year, the average stalls sold more than 5000 yuan per day, and now only two thousand or three thousand of sales per day. 3~5 month is the peak season for clothing sales, but there is no feeling of entering the peak season. Miss Tang said.

In the lower reaches of the garment industry, Xiao Chen, a saleswoman in a department store in Dongsheng, Inner Mongolia, also feels the chill of this year's clothing market. "Our counter sales amounted to 200 thousand yuan a month in the same period last year, and this year's monthly sales volume is 160 thousand yuan." Xiao Chen told reporters.

Zibo Dongtai group, a shopping mall deputy general told our reporter that this year's sales of clothing sales in the mall were unchanged from last year. But considering the rising price of clothing unit, the actual sales volume is down. {page_break}

　　 Cost pressure

The house is leaking for a rainy night. Just as the inventory of clothing and textile enterprises is at a high level, the rising cost becomes another pressure. "Since the Spring Festival, many garment factories have been closed down." Xiao Guoxin told reporters.

Baoding Ji Hongxing's Rongcheng county is located in the triangle hinterland of Beijing, Tianjin and stone. Its clothing industry is well-developed, and has the reputation of the northern "Chinese clothing (000902) town" and "China's men's wear city". According to Xiao Guoxin, there are thousands of enterprises engaged in garment processing in Rongcheng County, and there are hundreds of them in scale. The main reason for the closure of these garment factories is the increase in costs and the decrease in orders.

Among them, the rise of human cost is most obvious. "A lot of factories that shut down factories are difficult to digest because of the high cost of human resources." Xiao Guoxin told reporters.

According to Xiao Guoxin, he made two salaries for workers before and after the Spring Festival, and labor costs rose to 40%. In a small county like Rongcheng County, the average worker's salary is as high as 2200 yuan per month. "The rising cost of manpower has led to many rising costs, including operating costs." Xiao Guoxin said.

The spring report of China's economic outlook released in April 25th by the Chinese Academy of Social Sciences pointed out that the rise of labor costs in China is rigid, and the impact on exports will persist for a long time. In the next few years, labor costs will increase by about 15% a year.

In fact, as a labor-intensive industry, the rise of human cost is not only in the process of garment processing, but also difficult to digest from the upstream textile enterprises and downstream retail channels.

"For textile industry, labor costs are the most stressful, and it is difficult to retain people every year without increasing 15%. Labor costs last year were about 2700 yuan per capita, this year at 3100~3200 yuan. Most of the weaving factories in Guangdong are full of 50%~70%, but not enough. Zhang Han, deputy general manager of Zhongshan Silk Import & Export Group Co., Ltd., Guangdong, said. The rising cost of labor and the mobility of employees have become the most common factors affecting the efficiency of enterprises. Textile and garment industry has the greatest pressure and cost, but the price can not be raised. The whole industry is facing a survival crisis.

Cai Yanhua, Secretary General of Wujiang textile chamber of Commerce, told reporters that the labor costs of textile enterprises rose by 20%. At present, the monthly salary of textile workers in Wujiang is between 3500~5800 yuan.

In fact, the rise is not just labor costs. Behind it, the expenses of utilities, rent and office expenses Cao Cao are also increasing rapidly. "In the first quarter of this year, the cost of raw materials decreased steadily, but its decline was far less than that of customers." Xiao Guoxin told reporters.

　　 Breakthrough in transformation

Behind the dilemma of garment enterprises, a phenomenon that can not be ignored is that China's status as the world's factory is gradually disappearing.

Influenced by the rising cost of manpower and the appreciation of RMB, more and more international clothing brands have transferred orders to Vietnam, Indonesia and some emerging labor markets in Africa.

Under such a background, domestic garment enterprises should turn from the original OEM to independent research and development brand. "The advantage of making OEM is that the risk is small, the disadvantage is that the profit space is small. Making the brand can get more profits, but the risk is bigger." Xiao Guoxin told reporters.

It is reported that Baoding Hongxing has developed its own men's shirt brand called tengguan after the financial crisis in 2008. Now it sells 200 thousand pieces each year, increasing at 25% annually.

At this year's fair, some participants said that in recent years, Chinese textile and garment enterprises have emerged a number of high technology, independent brands of export products, welcomed by the international market.

A foreign trade enterprise official said, "although the factory export market is still mainly OEM, the proportion has dropped to 70%, 30% has gradually made the brand, and the domestic market has mainly made the brand."

"Making OEM, the factory is very easy to stereotype, a year to do one or two billion already reached the ceiling, but the brand, there is no sales ceiling, and profit is 3 times to 5 times the OEM." The person in charge told reporters.