Innovation And Development In Guangdong Shaoguan Beijiang Textile Industry

With the high cost of raw materials and manpower, and the slow growth of orders, the crisis is no accident. For large or small and micro enterprises, this kind of crisis can be fatal. For export type Textile enterprises In terms of material processing, it will not be easy to do so. To survive, we must change the way of operation. Founded in 1995, Beijiang textile is undoubtedly born in the golden age. It is an important nutrient for the survival and development of the Guangdong based Shaoguan jeans manufacturer. From the scale of production, Beijiang textile sold more than 300 million in the first half of 2012, which belongs to medium-sized enterprises above designated size. As an export oriented enterprise, Beijiang textile has a very frequent footprint abroad.

In view of the weak market outlook, Beijiang textile will not expand the capacity scale in the next 23 years, but will invest in new production hardware equipment. It requires courage and patience not only to survive in the market, but also to generate income through innovation and change.

Two kinds of downturn

"At first it was just bad abroad, but it was good at home. Now it is bad at home and abroad."

"Five years ago, overseas orders accounted for 70% of our total sales, and then went to 60%, only 50% last year." Qin Gang, director of textile marketing at Beijiang, told reporters that the industry has faced unprecedented challenges since last year.

From 70% to 50%, these figures are no doubt a strong evidence for the reduction of foreign trade, but Qin Gang believes that from a positive perspective, it can be understood as an increase in sales in the domestic market. The European economic downturn is an irreversible objective fact. He analyzed that the Chinese product market is a price sensitive market, and once the price competitiveness of commodities is weakened, the external market will lose. The overall cost of Chinese enterprises has increased, and orders have gone to Southeast Asian countries such as Bangladesh and Vietnam, which are the main causes of the shrinking foreign trade. However, with the contraction of foreign trade, the trend of "expanding domestic demand and attacking the domestic market" has also been widely spread in the industry.

From the sales data of Beijiang textile, it seems that expanding domestic demand is not a specific medicine to solve the problem of survival. The domestic and foreign market sales volume is relative. The quality of the market depends on the total sales and unit price. The total volume of Beijiang textile last year reduced by about five percentage points, but it is still within the control. Qin Gang analysis said, "in fact, in the first half of this year, the domestic market sales are slightly rising, but because of the market situation is not optimistic, our product unit price should be down. Most of all, at first, foreign markets were bad and domestic markets were good. Now, the two markets at home and abroad are not good.

Profit squeeze

Unit price decreases and R & D expenditure increases.

The cost is rising, and the outside is decreasing. In order to adapt to the sluggish market, the unit price of the product has to be reduced. Although Qin Gang did not want to disclose the profits of his products, he told reporters that in order to satisfy the requirements of middle and high-end customers for style design, the investment in product innovation and development is almost the largest among all expenses. "Every season we will launch a new series of over 200 new varieties, which will develop more than 10 new products per month." Many new products, but can not be converted into actual orders, nor can it bring sales effectiveness.

In addition to the transformation from new products to commodities, how to further develop trade and business cooperation with the developers who have established contacts with the exhibition is also an important transformation. "It does not mean that overseas exhibitors can ensure that we can get the order. We set up offices in Europe and the United States, and we hope to have closer ties with customers who have cooperative intentions or have cooperative relations. New products will be actively contacted and we hope to expand the share of each customer transaction as much as possible."

According to the situation of overseas exhibitors every year, Qin Gang concluded that European and American customers like products with high style. The product design must be fashionable and fashionable, and they all like to cooperate with fast delivery manufacturers. "The product category is different, we deliver time is also different. From the next order to delivery, there are 20 days for the category of raw materials. Only 10 days are required for the goods to be stocked, and the average regular product will take 30 days. "Qin Gang said that Beijiang textile is positioning itself in the middle and high grade section, and the customer's requirements will naturally be higher. It must ensure the quality as well as the sense of design. At the same time, the delivery must be fast, which will test the internal operation ability of the factory very much, and the internal production process of the factory also needs to be constantly adjusted. {page_break}

Death of cost

Cotton farmers, textile enterprises in the end who should be protected?

The global cotton production area is large, the output is large, the supply exceeds demand, and the economic downturn, the downstream textile industry enters the cold winter, the cotton consumption reduces, causes the international cotton price to drop this year. At the same time, China's cotton prices are still high, facing the heavy encirclement of international cheap cotton. Because cotton It accounts for nearly 70% of the cost of textile enterprises, while the price of national cotton is still not declining. This has led to a large number of textile enterprises operating at the downstream of the industrial chain falling by 50% or even lower.

Speaking of the difference between cotton prices at home and abroad, Qin Gang believes that the government is duty bound to support textile enterprises through extreme cold. "The industry urgently needs the government to introduce new and reasonable policies to ease the slump in the textile and garment industry. The purpose of the government to protect cotton farmers is understandable, but subsidies are not equal to the protection of takeovers. The protective price of national cotton reserves is nearly 1/4 higher than the international cotton price. "The market is not optimistic, the cost is not reduced, the textile producers get less profits, and the interests of cotton farmers are protected, and the textile enterprises are pushed to the position of isolation. "This is just like that we have been forced to buy" expensive cotton ". Compared with Southeast Asian countries, China's manpower cost has lost competitiveness, even the cost of raw materials has no advantage. Export oriented enterprises are very difficult. Qin Gang disclosed that because of the cost control, Beijiang textile will buy some cotton and Pakistan imported cotton in addition to the purchase of national cotton stores. "Plus the wage level and electricity charges and water charges of Guangdong workers are generally higher than those of the northern regions, so the textile enterprises in Guangdong are more comprehensive."

Breakout

In the second half of this year, Beijiang textile new pulp dyeing project will be put into operation, with new equipment to help upgrade product grades and further open new market segments with new products.

Order after going abroad

60%~70% overseas customers from overseas exhibitions

Every time he contacted Qin Gang, he seemed to travel abroad. In the construction of marketing channels, Beijiang textile was very active overseas. "Since customers mainly come from home and Europe and the United States, they have opened offices in Europe and America since 2008, with the aim of maintaining closer ties with local customers," Qin Gang said. Most of the new customers in Europe and the United States have established contacts when attending exhibitions abroad, and are basically looking for customers of high-end products.

"We are going to attend 12 different European and American exhibitions every year, almost every month." Qin Gang believes that it is necessary to actively participate in overseas exhibitions, such as PV cowboy show and kingpins exhibition every year. These exhibitions are international in terms of exhibitors' level, influence and scale. As far as Qin Gang observed, there are indeed quite a few Chinese counterparts in the exhibition in recent years, but still only a few. On the one hand, it can be understood that the sensitivity of Chinese denim producers to overseas exhibitions is still low. On the other hand, it can be considered that the market of Chinese denim fabric is still relatively coarse.

Nowadays, overseas exhibitions have become the designated action of Beijiang textile, like migratory birds. The reporter understands that the 60%~70% of overseas orders of Beijiang textile is recognized by overseas exhibitors. Qin Gang also indicated that the results of overseas exhibitions are not short-term effects and need long-term training and maintenance. This is also the main work of the Beijiang textile Europe and America office.

Counter market screening customers

Select potential customers and increase the share of single business

Despite the efforts to expand the domestic market, the list is still the main food and clothing of Beijiang textile. The number of overseas orders received by the first half of this year has been basically flat, but the number of overseas customers has decreased by 30%. "It needs to be explained that our total foreign trade volume in the past two years is still able to achieve an annual growth of 20%," explains Qin Gang. Two years ago, Beijiang textile began to build a customer risk assessment mechanism and conduct careful assessment and screening of customers. After the implementation of the evaluation mechanism, the number of customers decreased significantly, but the long-term customers' share of important customers increased. In the channel development, he believes that Beijiang textile is more inclined to tap the potential customers for sustainable cooperation, dig deep into the type and amount of customer orders, and avoid the risk of bad debts to some extent. {page_break}

Internal preparation for war

Using new equipment to achieve future revenue generation

The industry is looking forward to miracles, but from the current situation, the second half or even next year, "no surprises" has become a consensus. "The domestic and international markets are weak, the price competitiveness of Chinese products is weakened, the cost of labor and raw materials is lost, and the shrinking of exports is a fact before us. These deficiencies can not be changed in the short term, so in the next one or two years, I personally think that the overseas market is still not optimistic, and the European economic crisis is still spreading. It needs a process to recover. On the contrary, the domestic market is more confident in the long run. After all, the comprehensive cost, including the rising cost of labor, is the natural result of urban development. China's huge consumer market still has potential. " Qin Gang believes that textile enterprises should focus their efforts on improving competitiveness rather than complaining about external conditions. "The external environment is always changing. What enterprises can do is internal regulation, such as strengthening brand services, enhancing value-added products, differentiated products, and so on."

"In the second half of this year, the new pulp dyeing project will be put into operation. The new equipment will help improve product quality and further open new market segments with new products." In view of the low market outlook, compared with other textile enterprises, Beijiang Spin The scale of capacity will not be expanded in the next 2~3 years, but new production hardware equipment will be put into operation. It requires courage and patience not only to survive in the market, but also to create income through innovation and changing the way of operation. "Facts are in sight. We can only continue to take the road of differentiation to win. In the current sales situation, innovation has brought benefits to us."