What Are The Survival Challenges Facing Dongguan's Textile And Garment Enterprises?

Here world clothing shoes The Xiaobian of the hat net introduces Dongguan. Spin Garment enterprises are facing challenges of survival.

These experiences, together with the latest textile and clothing in Dongguan, issued by the Dongguan municipal SME Bureau Shoes and Hats The industry survey report coincides. Experts who participated in the survey report pointed out that the rising labor costs and rising prices of raw materials, the appreciation of the renminbi, and the Reindustrialization of western countries on the technological innovation of Dongguan's manufacturing industry, Dongguan textile industry, which is highly dependent on export trade. Clothing and shoes Enterprises are facing great challenges of survival and development.

Similar to most clothing businesses, Li Yifeng, a Thai garment manufacturer in Dongguan, initially entered the garment industry and was also "dumping". cloth OEM played.

From 2002 to 2008, it was the best time for clothing business. It was busy at 9 every morning until 10 o'clock in the evening. Li Yifeng recalled that that period of time was a golden day for many garment enterprises. But from 2009, garment enterprises began to go downhill. In order to find a long-term development, Li Yifeng also took the road of brand in the field of OEM.

Similarly, Chen Dafei, who began to manufacture foreign brands in 1995, was also digging a golden pot in the golden age of Dongguan's manufacturing industry. Before and after 2008, influenced by the financial crisis, he also sprouted the idea of making a brand.

In recent years, with the increasingly fierce competition in Dongguan's textile and garment enterprises, the rising cost of procurement, the narrower profit margins, and the macro-economic impact and the continued appreciation of the RMB, many textile and garment enterprises have evolved from the original rapid growth to the difficult advance or barely maintained.

These experiences coincide with the latest survey report on textile, clothing, footwear and hat industry in Dongguan issued by the SME Bureau of Dongguan. Experts who participated in the survey report pointed out that the rise of labor costs and rising prices of raw materials, the appreciation of the renminbi, and the impact of re industrialization of western countries on the technological innovation of Dongguan's manufacturing industry are facing great challenges for the survival and development of Dongguan's textile, clothing and footwear enterprises.

　 Highlights of the European debt crisis

Emerging countries are snatching orders.

According to the recent statistics issued by the Guangdong branch of the customs, from 1 to April this year, the export of major labor intensive products in Guangdong was 199 billion 220 million yuan, increasing from 2.5% in the first quarter to 4.1%, accounting for 18.2%. According to the export volume from large to small, the export of clothing and clothing accessories dropped 9.9%; the furniture and its parts grew 5.1%, the footwear slightly increased 0.2%; the textile fell to 4.6%; the bags and toys increased 20.1% and 9.6% respectively.

In the industry view, the export data "looks good". However, experts who wrote the research report said that this trend is still not optimistic for Dongguan's textile, clothing, footwear and hat industry.

Since the European debt crisis, orders for export oriented enterprises in Dongguan have been shrinking. The direct reason for the decline in export orders is the weakening demand in European and American markets and the lower purchasing intention of customers.

"Although the European debt crisis has been over for some time, the negative effects of its sequelae have not been completely eliminated." Experts say this is mainly due to the weakening of the economic situation in Europe and the United States, and clothing is not the most important consumer goods, which directly affects the export situation of Dongguan's clothing industry.

On the other hand, Dongguan also faces fierce competition from other countries such as Southeast Asia. Dalang Wool Textile Association said that Dalang has many wool textile enterprises in the search for export breakthrough, has been from Kampuchea, Bangladesh, Vietnam, Pakistan, India, Sri Lanka and other countries in the multilateral competition.

"The labor force in these countries is relatively cheap, especially in those countries where tariffs are relatively low, and even some countries such as Bangladesh and Kampuchea have implemented zero tariff policies, which makes Dongguan vulnerable to competition with foreign countries in these countries and regions." Experts say that although Dongguan has some advantages in design, technology and other aspects compared with those countries, it has to admit that these countries and regions are trying to narrow the gap with Dongguan. Competition from these countries and regions should not be underestimated.

In addition, the appreciation of RMB brings a series of challenges. Affected by the increasing appreciation of the renminbi, the export volume of these textile and clothing shoes and hats has declined. According to the measurement of the China Textile Industry Association, the value of the cotton textile industry will drop by about 12%, and the wool textile industry will drop by 8%, and the garment industry will drop by 13%, every 1% appreciation of the RMB.

Referring to the appreciation of RMB from 2006 to 2013, the reporter learned that the value of RMB rose by 3.35%, 6.88%, 6.8%, 0.12%, 3.01%, 5.09% and 0.23% against the US dollar in 2006 and 2007 to 2012 respectively. According to estimates, if the RMB appreciation continues to reach 5%, it means that most export garments and textiles are likely to have "zero profit".

"The appreciation of the renminbi will be hard to avoid for such industries as clothing which are highly dependent on export trade. At present, many orders have been sent to rival countries such as Vietnam, Kampuchea and India. Experts say that some of the orders are transferred to new manufacturing countries with lower cost. Dongguan's competitive advantage as a manufacturing city is relatively weakened.

　　 Material labor costs rise

Serious brain drain

Besides the bottleneck of exogenous development, the bottleneck of endogenous development is becoming more and more serious, which is mainly caused by the employment gap and the rising of raw materials.

In recent years, the clothing industry in Dongguan has a saying: "some people do not have goods to do, and no one does." This statement points out that there is also a contradiction in the employment of Dongguan's textile, clothing, shoes and hats, that is, when the early season is low, the orders are scarce, and the workers have nothing to do.

In the survey report of municipal SME Bureau, 74.8% of enterprises reflected gaps in employment. Among the enterprises that reflect the shortfall in employment, the most urgent needs are ordinary workers and skilled workers. Among them, ordinary workers account for 56.7% of the employment gap, and technical workers account for 54.8%. In addition, R & D personnel accounted for 14.4% of the employment gap, and management accounted for 13.5%. Although the employment gap between R & D personnel and management personnel is relatively small, it is difficult to recruit suitable personnel.

The reason for not getting workers is on the one hand, the loss of Dongguan's labour force, and on the other hand, the marked rise in the wage requirement of the labour force.

The new labor contract law, which was formally implemented in 2013, has achieved remarkable results in protecting the legitimate rights and interests of workers and defining the rights and obligations of both parties. The introduction of this law inevitably brings about the rise of the direct labor cost of enterprises, which is also one of the reasons for the decline in corporate profits. More importantly, the work mentality, consumption habits and rights protection consciousness of the new generation of workers are quite different from those of the earlier years. In addition, the domestic price level continues to rise, and the improvement of Dongguan's labor remuneration is unavoidable.

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"In addition to ensuring a reasonable salary level, we should also pay attention to improving employee welfare and working environment. Some workshops even add air conditioning, music players, accommodation and catering, which are much improved than before. It is to improve the quality of life of employees and ensure retention of talents." Li Shengli, director of Dongguan Dongsheng Cashmere Products Co., Ltd.

Despite this, Li Shengli said, the new generation of employees is still more difficult to recruit. Beginning in 2013, Li Shengli's company has already put into full use of computer looms. Even if the labor force is reduced, the recruitment problem still exists. "Shrinking orders, we do not dare to lay off a lot, because it is more difficult to recruit people in the future, but orders are often overstaffed in the off-season, so it is very contradictory."

It is not surprising that ordinary workers are hard to recruit. Enterprises also have a more troublesome problem: the loss of high-end talents is serious. "Compared with Guangzhou and Shenzhen, Dongguan will be more difficult to recruit senior executives." Dongguan Tianxiang Clothes & Accessories The head of the limited company said that the job hopping rate of executives was relatively high. They trained executives for several years and often switched to Guangzhou and Shenzhen enterprises. Therefore, many enterprises reflect that Dongguan's current talent competition mechanism is not perfect enough. Both enterprises themselves and the government level need to continue to pay attention to and work together to solve the talent problem for garment enterprises.

As for the rising price of raw materials, it has become an unbearable burden for enterprises since 2010. Since 2010, cotton, Leatherwear And other raw materials prices rose significantly, resulting in a sharp increase in clothing enterprises production cost pressure. In particular, the state started the cotton purchase and storage to form a "bottom effect" effect on cotton prices, leading to the inversion of domestic and foreign cotton prices. And due to quota restrictions, many enterprises could not purchase cheap cotton abroad.

The huge cost difference of cotton makes Dongguan cotton textile international competitiveness more affected. India, Vietnam and other countries take advantage of the low price of cotton yarn and occupy a lot of market share. According to the clothing industry in Dongguan, the most prominent year for the price of raw materials and fabrics in clothing industry is 2011, which rose by 30% to 80% in the year.

The rising cost makes the average profit margin of small enterprises with "three to one supplement" in Dongguan less than 5%, and the overall profitability has been weakened.

　 expert

Enterprises should transform to "light asset mode"

Dongguan's clothing and footwear industry has made a remarkable leap. Now there are internal and external troubles. In the survey report, the experts put forward: Dongguan should prevent the transformation and upgrading of the footwear and footwear industry from carrying out the "smile curve" path of "extending both ends and upgrading in the middle", that is to say, insisting on the transformation from the pure manufacturing process to the high-end R & D design, advanced manufacturing and brand marketing.

In the whole investigation process, experts found that at present, the proportion of advanced equipment used by Dongguan textile, clothing, footwear and hat manufacturers is relatively low, and many enterprises even do not have advanced equipment at all. Therefore, the whole industry's technology and equipment need to be upgraded to improve production efficiency.

Take a knitting T-shirt enterprise in Dalang town as an example, the factory originally used a hand loom, each machine needs one worker to manipulate, and then the hand loom is upgraded to CNC loom. Now one person can take care of 6 to 8 machines, and a machine is equivalent to the production efficiency of 40 to 60 people in the past.

"Although there is a certain risk to purchase a large number of equipment at a time, it is worthwhile to update this from the input to output ratio." He Zhijun, the head of the enterprise.

In addition, experts have also found a problem. For a long time, most of the international marketing and promotion work of Dongguan textile, clothing, footwear and hat enterprises is basically undertaken by middlemen. Therefore, experts suggest that enterprises should turn indirect trade to direct trade, find suitable terminal customers, establish long-term and stable relations, and reduce transaction costs and operational risks.

But the disadvantage of this approach is that reducing the middlemen's links will also bring challenges to enterprises, such as establishing their own overseas sales network system, the risk of loss of goods or unsalable products. At present, some powerful companies have begun to try to take orders. " Zhong Daguang, general manager of Dongguan Zhongda knitting and Garment Making Co., Ltd., said that the process of business proficiency needs a process.

"Enterprises will eventually have to go to light asset mode transformation." Experts say that most of Dongguan's textile, clothing, shoes and hat enterprises are brand OEM workers. In the way of subcontracting to domestic sales, enterprises can choose to cooperate with enterprises adopting light asset mode, or enterprises can directly build their own brands through light asset mode, that is, enterprises only do research and development, licensing, sales and other core links, and outsource production, logistics and so on. Dongguan city search [-0.63% special fund research report], Dongguan city beauty is this kind of enterprise.

However, such a method is very difficult for productive factories, and enterprises are required to abandon their original workshop and production capacity, and brand marketing, R & D, and so on. Designer Recruitment and training, market positioning, and channel development are all skills that enterprises did not have, and the difficulty was relatively large.

"But in the long run, it is very important for the healthy development of the whole industry." Dongguan Song Ying Industrial Co., Ltd., responsible person said. The predecessor of Song Ying was founded in 1987 in Dongguan Humen credit garment factory. In 1996, Dongguan pine Eagle Co., Ltd. was established. After more than 10 years of development, pine Eagle has the comprehensive ability to develop, produce and sell products including men's shirts, Western-style clothes, jackets and so on. Song Ying also bought a French brand to fill the vacancy of the high-end brand market.

"Enterprises should be more profound and rational. This is a painful and lengthy process. Enterprises need to be careful and patient, but the success of transformation and upgrading will bring considerable profits and strong competitiveness for enterprises." Experts say.

Dongguan textile, clothing, footwear and cap industry

In the early days of market economy after the reform and opening up, Dongguan garment enterprises sprouted up and sprung up through the economic exchanges with neighboring Hongkong and sprouting up in the field of foundry and imitation. Many garment enterprises in Dongguan laid the foundation for becoming the famous garment production base in China at that time. Dongguan's individual town streets initially formed regional and clustered garment production enterprises.

Since the 90s of last century, Dongguan's textile, clothing, footwear and hat industry has entered a stage of rapid development, and the degree of marketization has improved. The garment industry has become the main industry of Dongguan's development at that time, and the two business models of brand design and foreign trade processing have begun to take shape.

Clothing, casual wear, children's clothing, etc., mainly in the towns of Changping and Liaobu, which mainly produces wool knitted products, mainly in the town of Cha Shan, radiating Shilong, Dongcheng, Shi Pai and other townships, mainly producing casual wear, children's wear, knitted T-shirts, sportswear, underwear and so on. Dongkeng Town has gathered men's clothing enterprises to produce Western-style clothes, such as the famous Western costumes, David Roth, Weing and other famous Western clothes are all produced in this town; the towns such as Ma Chung, Hong Mei, Sha Tin and other towns form the water village area, mainly engaged in printing and dyeing, washing water and other links; the central hall town mainly produces jeans clothing; the shoemaking mainly distributes in Nancheng Houjie Humen. At present, Dongguan textile, clothing, shoes and hats have also shown a clear industrial distribution, taking Humen town as the center, radiating Changan, Houjie and other townships, mainly producing fashionable women. In addition, the footwear industry in Gao, Liaobu and Shatin also has a certain scale.

As one of the first ten textile industrial bases in the country, Dongguan has 3 provincial-level industrial cluster provincial demonstration zones and China, including Humen garments, Dalong Mao and Houjie shoes. Brand clothing Manufacturing a number of textile and garment industrial bases such as famous towns and so on. There are 7 enterprises in the textile, clothing and footwear industry in Dongguan, whose main business revenue exceeds 1 billion yuan, of which the main revenue of YISHION group is 6 billion 800 million yuan, and 54 kinds of brand names of textile, clothing, shoes and caps.