Can Southeast Asia Become A New "World Factory"?

Recently, reporters visited Foshan.

Enterprises understand that the rising textile industry of Southeast Asian countries is becoming the main competitor of Foshan and even China's textile enterprises.

Foshan textile industry is facing tough challenges in the foreign trade situation where the price advantage is losing.

On the morning of May 3rd, crystal source was located in Shunde District, Foshan.

In the booth of the Canton Fair, the general manager of the company, Lin Xiaowen, was receiving an American buyer.

One word is arranged, one by one, details are introduced one by one, and busy for more than half an hour.

But whether the list can be settled, Lin Xiaowen still has no idea: "customers think our unit price is too high."

A reality that has to be faced is that the rising textile industry of Southeast Asian countries is becoming the main competitor of Foshan and even China's textile enterprises.

Under the foreign trade situation that the price advantage is losing gradually, China's textile industry is facing difficult challenges.

Southeast Asia is short of 2 local salaries.

"Guangdong clothing unit price is high, and now our orders are basically taken away by textile enterprises from Southeast Asian countries such as Kampuchea and Vietnam."

With the company's orders declining, Lin Xiaowen went to Bangladesh last year and learned that he was full of sense of crisis: the monthly wages of the local workers were 50 dollars, and the skilled workmen's wages were 100~120 dollars, while the wages of skilled workers in Foshan were generally around 5000 yuan (about 770 dollars), and the cost of workers was several times worse.

"The difference in wages is several times, and the price of each commodity is four or five times different.

Bangladesh, like China in the 90s of last century, is in the honeymoon period of demographic dividend. "

Lin Xiaowen frowned, and he told reporters that the company had long been processing the brand of the famous American Cowboy brand LEE, which is also a big customer.

But since last year, several of these big clients have stopped working with them.

"The main thing is the price."

Lin Xiaowen reluctantly indicated that the company's exports in the first quarter fell by 30% compared with the same period last year.

The overseas sales of Foshan Sheng Qi Garments Co., Ltd. were also severely affected by the Southeast Asian textile industry. The export volume of the company dropped by nearly 40% in the first quarter.

"We sell six or seven yuan for a T-shirt, only 2 yuan for Southeast Asian production, but we can only spell the price. We can only spell the quality and put the main target customers on the European guests."

The director of the company's booth shows that the products they brought this year have worked hard on product quality.

Drive product sales with independent design

"In recent years, the domestic demographic dividend has been gradually disappearing, which has a great impact on the garment industry.

The textile industry must find its own advantages if it wants to continue its development.

Deng Wenli, head of Xiehe Garments Co., Ltd. in Shunde District of Foshan, said that the textile industry of Southeast Asian countries has brought great impact to the enterprises, and enterprises should adjust their strategies according to their accumulated advantages in the past.

At present, Concord clothing is gradually shifting from OEM to ODM.

Deng Wenli said that in the past, foreign guests had given models, and they had copied production, and now they are gradually becoming enterprises to provide samples to buyers.

In the third issue of the 119 Canton Fair, Concord clothing brought 12 self designed cowboy varieties to the exhibition.

On the 3 day, a buyer from South Africa finished reading at their booth and chose 9 products on the spot to send samples.

If it can be settled, Concord clothing will receive 40 thousand orders worth nearly 2 million yuan.

"This shows that the accuracy of our R & D is very high."

Deng Wenli said that enterprises began to increase investment in design in 2010, but at that time they felt little success.

Over the past two years, they have found that products designed by themselves are becoming more and more popular.

At present, the company has set up a special design team, always pay attention to the fashion trend at home and abroad.

In the first quarter, sales of enterprises increased by 13% over the same period last year.

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Can Southeast Asia become a new "world factory"?

Apparel industry has pferred orders to Southeast Asia.

Statistics show that in the first half of 2015, with the sharp decline in China's imports and exports, the EU's import growth from India, Bangladesh, Pakistan, Vietnam and Indonesia was between 29.6%~53.4%; the US imports from Vietnam, Indonesia, Bangladesh and Kampuchea increased by 18%~29%; Japan's imports from Vietnam, Indonesia and Thailand increased by 23%~49%.

FastRetailing, the parent company of UNIQLO, plans to increase its OEM orders from Bangladesh and Indonesia factories starting with the low price clothing brand G.U..

About 85% of Xun group's products were made in China, but as China's labor costs continue to rise, it has decided to increase the production ratio of 20%~30% outside China to 50%.

After 3 years, Muji plans reduced the number of cooperative factories in China from 229 to 86, and the purchasing ratio from China decreased by 60% from 60%.

Following the Vietnam, Burma and Kampuchea, Qingshan business will also be commissioned to produce in Indonesia. Southeast Asian factories mainly undertake sewing processes, and the fabrics needed will still be purchased from Italy and China.

BruceRockowitz, chief executive of Li Feng, the world's largest trade buyer, said a few months ago that wage increases in southern China might force consumer goods manufacturers to move out of production and move to "relatively quickly" areas in lower cost areas in the next five years, including Western China, Indonesia, Vietnam and Bangladesh.

In addition to the pfer of commissioned production, some companies have also set up new factories outside China.

TSI holdings, Tokyo's STYLE, invested 1 billion yen, and began building new factories in Vietnam since August last year.

Women's clothing brand Honeys will also start production in the new factory in Burma this fall.

Editor's note

Not only is Guangdong, but many of the foundry enterprises across the country experience the same.

Under the superposition of many unfavorable factors such as the increase of manpower cost and insufficient overseas demand, the traditional "made in China" trend towards the meager profit era has become a general trend. To get rid of this dilemma, the OEM enterprises must pform from the two aspects of industrial structure and labor structure, and enhance the core competitiveness of enterprises through innovation.

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