China'S Manufacturing Cost Advantages No Longer Come Out Of The Production Line Of Foreign Garment Enterprises.

China in the first half of 2012

Exports continued to slump, the volume growth was weak, and the growth rate slowed sharply.

Foreign trade is sluggish, investment in China's clothing industry is not reduced. Market consumption is getting warmer. However, inflation has caused clothing prices to rise or become a hindrance to continue to stimulate domestic demand.

China's cheap labor force has always been an important factor for foreign labor-intensive industries to invest and build factories in China. In particular, clothing enterprises are more sensitive to labor costs, and ordinary enterprises will control labor costs between 20% and 30%.

meanwhile

It is also an important support for China's national economy. It plays an irreplaceable role in providing employment or contributing to GDP.

China's apparel industry is the world's largest garment producer and consumer country.

But in recent years, with the advantage of cheap labor in China no longer obvious, the withdrawal of foreign garment enterprises' production lines has begun to become more and more intense.

"Low labor costs, low rental costs and low raw material costs" have all been added to the Chinese garment industry.

Adidas global CEO Haina said that because of the increasingly high wage standards set by the Chinese government, Adidas hopes to partially withdraw from China and move to cheaper labor areas.

Facing domestic clothing and

Adidas's global rival Nike also made the same decision on the high production costs of the industry. As early as in March 2009, Nike announced that it would stop its sole footwear factory in Taicang, Jiangsu.

Not only that, many domestic enterprises have begun to shift their productive forces to foreign countries.

A factory of tens of thousands of people in Guangdong will move 50% of its capacity to Vietnam in 2015 or 20% to India or Sri Lanka, leaving less than 30% of China.

Today, the "overseas foundry" trend has been blown off the line, as the Internet of fast fashion industry.

Enterprises, who have recently said that starting from autumn and winter this year, the origin of the label on the shirts of fan ksin pin (hereinafter referred to as customers) is no longer the same China.

As one of the largest e-commerce clothing brands in China, all customers use OEM mode, and factories are mainly located in the Yangtze River Delta and the Pearl River Delta region.

But since last year, customers have started appearing "Made in Bangla" products.

According to Liu Hao, deputy general manager of fan first production center, since last autumn and winter, Fan Ying and Nantong new high printing and dyeing Co., Ltd. have invested in Bangladesh's foundry factory, placing 210 thousand shirts in Bangladesh factory.

This year, some casual pants will also be produced in Bangladesh.

In 2013, products such as down garments and sweaters are also expected to make trial lists overseas.

In addition to having a relatively low labor advantage, Bangladesh takes the textile industry as the pillar industry of the country and has a complete set of perfect textile industry chain.

In the production of basic products such as shirts, casual pants and sweaters, Bangladesh's textile technology is excellent and the cost is about 30% lower than that in the domestic market.

In terms of quality, the surface accessories of all customers in overseas processing factories are provided by domestic suppliers designated by customers. In the early, middle and late stages of production, all customers will send quality inspectors to supervise the local factories in Bangladesh. Before entering the domestic warehouse, the products must be tested with the same quality inspection products as the same standard in China.

Now, the pass rate of Bangladesh products exceeds 95%.

As domestic labor costs continue to rise, Nike and Adidas have announced the closure of their own factories in China.

At the same time, China's clothing brands of increasing scale efficiency are also exploring the way of overseas foundry.

As far as van customer service is concerned, it has moved some shirts orders to Bangladesh since last year.

This year, products such as sweaters, casual pants, down garments and so on are expected to make overseas trial orders.

After China's accession to the WTO, it has entered the stage of globalization and fully integrated into the world trade system.

Since China has a large number of cheap labor and foreign capital, this situation has changed, and the rapid rise in various kinds of costs in China has made "China made" the advantage of the bonus no longer.

For example, in the past, sweaters in China were mainly produced by manual or semi-automatic production, because they were cheaper and better.

Now China's domestic wage increase has surpassed productivity growth. The average wage of Chinese garment workers is about 1~2 dollars per hour, and the rate of increase is accelerating.

For most e-commerce enterprises that are still in a state of loss, it is a pressing matter of the moment to seek a manufacturing base that enriches cheap labor and has a lower cost.

In fact, many production bases of domestic and foreign manufacturing enterprises have shifted from coastal areas to the west, and even Southeast Asia, especially Vietnam and Bangladesh, are increasingly favored by European and American businessmen.

In Bangladesh, the minimum wage standard of the garment industry was greatly raised in 2010. The daily wage of garment workers was only about 1.5 dollars per month, compared with 3000 Tucca (about 43 US dollars) per month, which is much lower than that of China.

Its exports to the European Union, ASEAN (China, Japan, South Korea), Canada and other countries enjoy preferential policies such as tariff free and quota free.

In addition to relying on cheap labor and preferential policies in Southeast Asia to effectively reduce the cost of products, on the other hand, for the online clothing brand, the gradual deterioration of the electricity supplier financing environment also makes the investment concept of investors gradually rational.

After the crazy electricity price war, investors are rational thinking.

While domestic brands are seeking the way of international production, the Chinese garment industry is facing a gradual decline in the era of "made in China".

Not only foreign companies such as Nike and Adidas have fled, but domestic enterprises are also turning their productivity to foreign countries.

Fan Ke Cheng CEO mentioned that when he inspects the foundries in the south, he found that the layout of some enterprises in China is changing quietly.

"A factory of tens of thousands of people will move 50% of its capacity to Vietnam in 2015, and 20% will go up to India or Sri Lanka, and China will have less than 30%."

In order to maintain market competitiveness, textile enterprises must strengthen their management and management capabilities, optimize their product structure, and reduce costs through various means to raise gross margin, and seeking overseas foundry is a good choice.

China's post labor era?

Despite the cost advantages of overseas OEM, overseas OEM has both advantages and disadvantages.

To seek overseas foundry production, enterprises must rely on scale effect to effectively reduce production costs, which puts forward certain requirements for the supply chain management capability of enterprises.

It is reported that Japanese retailers commissioned production and sporting goods manufacturers to accelerate the establishment of an overseas production system of "China +1", that is, establishing another production base outside China and in Southeast Asian countries.

The reasons for this trend are: first, enterprises should disperse production bases to deal with unexpected situations such as urgent increase in production or labor shortage and ensure stable supply; two, avoid the risk of China's labor costs growth.

Vic CEO Chen revealed recently that Vic has worked with Bangladesh's foundries to test the overseas garment manufacturing market, which costs about 30% less than that in China.

Since last year, van customer service has moved some shirts orders to Bangladesh, which is the first time that domestic clothing suppliers have tried overseas foundry.

Van Kee said that now they are speeding up the layout of overseas foundries.

Chinese textile enterprises put factories in Southeast Asia, such as Bangladesh, facing the problems of how to ensure product quality, technical level of overseas processing personnel, import and export tariff collection, lack of supporting facilities, shortening the pportation production cycle of accessories and garments and so on, which are factors that enterprises need to consider.

Therefore, She Wenjing, manager of Guangdong textile import and export Limited by Share Ltd, pointed out that China's textile manufacturing industry is shrinking, but it is far from "lost". Tariffs and pportation costs will still keep most domestic enterprises' orders in China.

In this regard, Liu Hao, deputy general manager of fan first production center, said that the enterprises made in China are still the main force of the cooperation between customers and customers.

This has led to the fact that many brands in China are still dominated by domestic production, but seeking overseas foundry production is a trend of strategic development.

This development trend does not necessarily bring about bad effects. China's development can not simply stay in the labor-intensive stage. The position of a country in international competition depends to a large extent on the development level of new and high technology industries. However, the expense of high-tech industry is huge and the quality of talents is high. In the current situation, we should consider how to precipitate and develop new and high technology, instead of thinking about how to win the attachment of labor intensive industries to us.

In addition to wages, pport efficiency is also an important consideration.

France's clothing brands began to look for processing areas nearby: Eastern Europe, the Mediterranean region and Madagascar.

Romania, known as "Europe China", has become France's largest supplier of textiles and clothing in Europe.

In addition, the continuous expansion of China's domestic market demand and labor shortage also make Chinese enterprises unwilling to sign long-term contracts with small and medium-sized clothing brands in Europe.

The gradual loss of the advantages of garment foundries is bound to bring great impact to enterprises. In the face of this inevitable development process, the Qing Research Center analyzed that for Chinese garment manufacturers, this is a dilemma, but it is also an opportunity and challenge.

Brand creation leads industrial pformation: from OEM to brand creation, this is the only way for China's garment industry to pform.

Due to long-term professional garment processing, Chinese enterprises have more mature large-scale production and processing capabilities, and lack of brand creation and promotion.

Chinese garment enterprises should be calm and accept this change. Meanwhile, we should learn from Japan and Korea and our coastal areas and Hongkong to experience this pition smoothly.