China'S Fashion Factory Brand: Shanzhai Or Shrewd Business?

Some Chinese factories produce branded products and their global counterparts. Luxury goods Brand products are surprisingly similar in appearance.

Hongkong, China -- Made in China Turning to "China" Design "We are promoting the pace of economic development, but in China's economic development" balance sheet ", manufacturing is still more important than Hatsubasa Mitoyo's creative economy.

In recent years, China's manufacturing industry has been hit by factors such as slowing global demand, relocation of purchasing centers to cheaper Southeast Asia and other factors. Factories with high skilled labor can not get enough work, and the suppliers of the major luxury companies have come up with a solution: create their own brand.

Most of these manufacturers do not do the "original single", that is, the so-called "factory surplus" high-quality re engraving products, which is Alibaba chairman Ma Yun recently interviewed, controversial so-called "as good as genuine goods." But in some cases, some other brands produced by Chinese factories are very similar to the products they produce for western customers. Sometimes the origin of these brands is also quite ugly.

"They made such a change in order to protect themselves," said Gerhard Flatz, general manager of KTC, China's top sportswear manufacturing company. "Manufacturing is shifting to other areas. In order to survive, the factory feels something has not been done before. Of course, this kind of business will bring a lot of problems, but the factory is in a difficult position at present. This is a tough battle and they have nothing to lose. "

Build your own brand

Take the leather brand Tuscan 's, for example, the brand is produced by Sitoy in Guangdong, China, and the times group also produces products for Michael Kors, Prada, Tumi and other brands. Tuscan 's claims to have originated in Florence, Italy, but because of its licensing rights to almost all the major global fashion markets outside Europe, its operation model over the past 5 years is more like a Chinese brand.

Times group is now designing Tuscan 's handbags in Dongguan manufacturing base, and has a large retail network from Chongqing to Ningbo, exclusive brand stores and shopping malls in all parts of the country. The handbag itself is relatively high in quality, priced at about 150 dollars, and the same designer brand bag needs at least $1500, and the brand "Tuscan" s is clearly typed. But there are some similarities between some styles and international brands. For example, Tuscan 's's "Gem" series handbag is rigid, square, with handles on top, with pocket flip, gold hardware details and leather chain straps, with similar shape and characteristics to Michael Kors's "Bridgette" handbag.

CocoMojo, a young accessory brand in Hongkong, offers another entirely different example. The operation of CocoMojo is supervised by Wendy Mak, an important figure in China's manufacturing industry. Over the years, her family leather factory is located in the Pearl River Delta region, and has been producing products for Marc Jacobs, Prada and Coach for many years. CocoMojo's handbags are mostly brightly colored marble leather and multicolored shiny leather products, but in terms of their outlines, they are surprisingly similar to the famous luxury brands such as Coach's "Eddie" style lazy shoulder bag. But unlike Tuscan 's, CocoMojo seems to be a small personal project of Mai Shi Yun, and she is most likely to inherit her father's leather empire one day. Nevertheless, if successful, it is a way for her family business to diversify and move upstream to the value chain.

But despite the introduction of some "derivative" designs, the two factory brands are essentially different from the main street brands in Europe. The latter produced a similar product with luxury brands, which was occasionally sold off by plagiarism. After all, these two business models emphasize different interpretations of the spectrum from original design, minor change design to flagrantly copied plagiarism.

Inspired or directly copied?

But if a similar design comes from a factory or manufacturer that is also a big international foundry, will western brands be unhappy because of their production partners or will directly threaten their businesses? Will they be more likely to ignore this problem?

The design of these factory brands, as long as they do not infringe on the interests of factory customers without legal effect, many European and American brands seem to turn a blind eye to these legitimate business operations. But many people believe that luxury brand executives are privately dissatisfied with the "Shanzhai style" products that Chinese factories are spreading with other manufacturers.

"The most worrying thing about brands is that these classic packages also constitute the brand itself. Such behavior will cause brand dilution," Liz Flora, editor in chief of Jing Daily, said earlier this year, the company released a groundbreaking report on China's gray online market and fake (China 's Online Gray Market and Counterfeits). "So far, only the top brands such as Herm s have not been affected. On the one hand, Taobao's Birkin Bags is everywhere. On the other hand, we have just witnessed the world record of the real price of the platinum package in Hongkong.

Others in the industry are more sympathetic to factory brands. Some people simply see this phenomenon as a natural ingenious response to a rapidly changing market in order to raise profit margins.

"All companies need to consider how to continue and grow in the future," said Jason Leung, director of The Alphabet, a sales agent in London, who is responsible for liaison with manufacturers in Greater China. "I have encountered some Chinese factories in the field of global luxury brands, but also have proprietary brands, mainly for the domestic market. But setting up their own brands can make them more strict in controlling their revenues. [because] if they only rely on one or two luxury brands, their incomes will be greatly influenced by the development of these brands.

This uncertainty explains why many major Chinese textile and garment factories are beginning to transform from original equipment manufacturers (OEM) to original design manufacturers (ODM). The former means that they are only responsible for producing products that have been designed, or for making parts for other companies, while the latter completes the whole design process internally.

Some factories that are beginning to play the role of new ODM are trying to adopt a different approach from the times group: they have not switched to starting their own brand, but have designed and produced the entire series and sold them to other companies, which subsequently put their brand labels on commercial products. In the industry, this is a well-known, rapid development phenomenon, now known as the "white label" strategy (White-Label strategy).

"At the Hong Kong Fashion Week exhibition in Hongkong, I was surprised to see that it wasn't a rookie creative designer, but a Chinese factory with various product lines. These series were designed for the production of clothes made by global brands only, "said Susanna Soo, owner of Hongkong fashion brand S.Nine." in fact, I was impressed with the design and quality of the products they provided. I can also understand why the factory will take this step, because as far as I know, they are in a very difficult position.

The main reason is rising costs. According to data from Boston Consulting Group, wages in mainland China have increased almost two times over the past 10 years, coupled with higher energy consumption and logistics costs, which means that local factories in Boston have lost their past attractiveness in terms of economic costs. Western and Chinese brands have shifted their products to Bangladesh, India and Indonesia. On top of that, Chinese factories will also face a big slowdown in domestic and European economic growth.

To improve their products, some factories are trying to recruit talented designers. Li Na, a fashion designer who showed up at Mercedes Benz Mercedez-Benz China Fashion Week, has publicly stated that she has found her factory to create a brand series for her. Traditionally, factories that produce pre designed clothing for western high street brands now want to update their business models. In their conversation, the factory owner explained that he felt the pressure from the local community and (very interesting) from the government, and had original aesthetic brand, so they became interested in Li Na.

Opportunities for skills upgrading and quality upgrading

Although it is hard for you to make a conscious negative reaction to the so-called factory brand phenomenon, the increase in the number of self operated brands will not only benefit the end-users but also to the parties in the industry. Shanzhai and piracy are still big problems in China's manufacturing industry, but if factories can get rid of the way of doing nothing in mind, they may be able to find a way out in an unexpectedly strong position.

"In the final analysis, factories are more advantageous than most brands," Flatz said. "Factories have highly skilled workers and know how to make products cheap and beautiful. That's why KTC plans to adopt different strategies. We are closing our partnership with some brands and joining hands with young designers. This is the way forward. "

The factory has been trying hard to meet the stringent standards of international brands for many years. Now it can hire most young Chinese designers with overseas education background, plus a strong marketing team, which can provide original and high quality clothes at competitive prices.

But it is still naive to think that factory brand is a combination of creativity and economic effectiveness. Although there will be a case, the more direct solution to the observer's opinion is that western brands and Chinese factories are seriously examining their current work practices.

Jason Leung said that the importance of human relations is more important than that in the West in order to do business in China, so if luxury brands cultivate these relationships and provide more incentives or investment opportunities, factory owners will feel uncertain about the future. Because the root of this phenomenon is the uncertainty of the future.

"If you are familiar with the Chinese, they can wear the same pants with you; if they do not get along well, they will run you." Flatz said, "things are so simple."