How To Make Textile And Garment Industry Bigger And Stronger With 170 Million Employees

In 2020, the total employment population absorbed by the upstream and downstream industrial chains of China's textile and garment industry is said to be as high as 170 million. Although the specific figures can not be verified, the textile and clothing industry undoubtedly occupies half of the national economy.

As a pillar industry, the domestic textile and garment industry is facing a crisis of internal and external troubles. In the past six months, more than nine well-known textile and garment enterprises have gone bankrupt. Four years ago, the profits of mattersbonwe exceeded 1 billion. Today, the former clothing empire is on the decline of loss, while the international fast fashion brands represented by Zara and UNIQLO have become the new favorite of young people.

At such a moment, the transformation of the Internet to the traditional industry, in the field of clothing, in fact, is much shallower than we imagined.

01 "a simple tag is a complicated thing in traditional retail stores"

Clothing is a huge manufacturing system. What we talk about most with the people of traditional clothing enterprises is the production supply chain in the back end of clothing. Every link in the clothing supply chain is like a sophisticated design of gears, these gears bite each other to form a huge machine, and this machine is really affecting the development of the clothing industry.

In the traditional clothing industry, the supply chain is roughly divided into three parts: clothing company, clothing factory and fabric factory. Geographically, the whole clothing industry is concentrated in Qingdao, Guangzhou and the Yangtze River Delta in Shandong Province. The fabrics are distributed in Keqiao, Shaoxing and Zhongda in Guangzhou. The production base is mainly in Jiangsu and Zhejiang.

Wang Jinhua, general manager of youshibao, who had been in the traditional clothing industry for 15 years before, told reporters, "in the specific operation of the supply chain, some clothing companies are very light, only do brand operation close to marketing, and their clothing will be outsourced to the design team. Some clothing companies are more important, the bottom will be equipped with the corresponding design department. In either case, what the designer finally designs can only be called a work. To turn it into a product, it has to go through important clothing production links, including nesting, cutting, sewing, ironing, etc

From design to production, there are two most common modes in garment processing and manufacturing: one is all inclusive mode. The factory is directly responsible for the whole package, and the clothing company directly pays the total price, and finally only receives the finished products. The factory is only responsible for processing, and the fabric is purchased by the clothing company itself. The clothing company will pay two fees, one is the processing fee for the factory and the other is the fabric fee for the fabric factory. As for the fabric logistics from the fabric factory to the factory, you can choose to pull it yourself, or you can ask the factory for distribution.

In addition to the fabric needs to be purchased, there are accessories, which refers to the button material on clothes. If it is the all inclusive mode, the factory will directly prepare accessories for the clothing company. In another way, the clothing company will buy accessories by itself, and the factory is only responsible for the assembly.

"It's also more complicated to manufacture than the raw materials. The fabric itself has its own technology, for example, different fabrics have different underlay. For a linen grey knitted T-shirt, its base cloth should be dyed from the initial white to flax grey; for a skirt with lace, in production, the bottom cloth of the fabric needs the lace process first. These treatments may be finished by the clothing factory itself, or the base cloth may be prepared by the fabric factory. Under different cooperation modes, the upstream and downstream chains may be longer. " Wang Jinhua said.

This complex production process, chain nodes intertwined situation can be reflected in the simplest T-shirt.

T-shirt can be regarded as a very standardized product in clothes, but to make a T-shirt, the supply chain involved is also very troublesome. Starting with the purchase of garment blanks, we need to find a printing factory, then go through a lot of different processes (such as printing, labels, etc.), then to the packaging (at this time, we need to connect with the packaging workers), and finally we are the logistics suppliers and after-sales service. In front of the garment embryo, there is a finishing process, which includes ironing, inspection, folding and other processes, as well as washing, shearing, steaming and pressing. There are garment processing, cloth procurement, printing and dyeing, raw materials and so on.

"There are a lot of doors in the clothing manufacturing industry. A simple tag is a very complicated thing in traditional retail stores. The information on the tag and the description of clothes need to be very accurate, and there are so many SKUs in the store, it is not easy to match them one by one. If there is any discrepancy between the tag information and the clothing, it will be very troublesome, because the store has the purchase record, and it will be issued according to the matching number, and the quality supervision department will carry out spot check. If the discrepancy is found, the punishment measures are very strict. Some stores put labels off directly to save time, but the retail assistants often don't know. " Liu Chao told me.

It can be seen that the whole chain in the clothing supply chain is very long and there are many nodes. Almost every process involved is in the charge of different factories. It is very professional and subdivided. The cooperation mode of the supply chain is also flexible and diverse. But in the end, it is a result of the cooperation of multiple suppliers.

02 "the industry itself is not produced on demand"

When I asked what problems existed in traditional clothing production, Wang Jinhua replied. In his view, the two biggest problems in the traditional clothing industry are inventory and fabric.

When the brand side organizes production, it places orders in the back-end supply chain according to the annual plan. For example, the factory and fabric factory will organize raw materials and production line according to the order quantity of 100000 pieces. After the production of these clothes, due to the deviation of the brand's prediction, it may sell well or not.

If it can't be sold, it will generate inventory. In order to cover inventory, the brand side usually adopts the method of high gross profit rate, and increases the price to 10 times of the cost, so that even if the sales are good, the whole clothing production supply chain is very large, and it is almost impossible to pursue orders again. Because the raw materials are also divided into batches, all the fabric accessories may not be available when tracking. And for factories and fabric factories, they also need to bear a lot of uncertainty and risk because of the relationship between the brand side.

"Large scale fabric suppliers will be pressed by brands. In fact, in order to meet the needs of large merchants, they will also choose their own pressed fabrics (by cylinder). These fabrics if the market trend is not good, can not sell, will also produce inventory. The most typical example is the rise of fast fashion brands such as Zara in recent years. Because of their pursuit of quick response to the market, they require fabric suppliers to have the ability to quickly replenish goods, so they often transfer the risk to these fabric suppliers. " Wang Jinhua analyzed.

Nevertheless, most fabric manufacturers are still willing to cooperate with these big brands who can't afford to offend, because these big brands usually have regular payment rules and large volume of goods. For the problem of pressure goods, fabric suppliers will take some strategies to alleviate, such as opening their own file, or putting the overstocked inventory on the platform to sell bulk goods.

Another boss of a family business in Guangdong, who is an OEM of traditional clothing, told me that all inclusive factories are usually more powerful because they receive large brands, so the pressure and risk of the factory are even greater. For example, we are responsible for a series of processes, such as the whole cloth purchase, the whole package production, and the overseas production. In these processes, the factory has to put the cash flow on the cloth factory, the risk of unqualified QC should be borne by itself, and the labor cost of workers should be paid. And the tricky brand side will often spot check, if the final do not want this batch of clothing, the factory often can only get back 20% of the cost, the risk previously borne will be converted into loss pressure on themselves.

Because of the complexity of the production process, the various processes, and the superimposed uncertainty of each link in the factory, fabric factory and raw material factory, the communication, coordination, logistics and transportation between the factories have integrated into a huge and bloated supply system. The efficiency of this supply system is not bound to be too high, but the bigger problem is that the supply system is an unstable structure.

Liu Chao in the process of doing excellent T, the biggest feeling of the whole process is that the biggest problem in the industry is that we can't find a supplier with stable quality. "None of the manufacturers are willing to stock them. And it's really hard to be stable. We have looked for it in China. Some suppliers can give you a good experience at one time, but they can't guarantee a stable supply of this quality for a long time. Because the cost is still very high, the suppliers always prepare hundreds of thousands of pieces each time. In the end, we found two satisfied overseas, one in the United States and one in Japan. "

In addition to the problems of the industry itself, the external market environment and some other increasing "new variables" also deepen the hidden diseases of the traditional clothing industry.

First of all, the most direct impact comes from the clothing trade. TPP has a great impact on China's clothing industry, and the domestic clothing industry will face the pressure of trade transfer effect and weaken the position of integrated division of labor. In addition to foreign trade, higher manufacturing costs are another variable factor.

"Many foreign brands have begun to shift to Southeast Asia and other regions instead of looking for Chinese OEM manufacturers. For example, Vietnam is a TPP manufacturer. If they find them to do OEM, there is a tax rebate policy for the tariff profits of the clothing industry. Large amount of fabrics are focused on rolling amount, which is greatly affected by the global market. Domestic textile and garment industry can not pull up foreign demand now. With more competitors and more domestic trade, the market share will certainly be dispersed, resulting in squeezing. " Wang Jinhua told me.

The cost of manufacturing industry includes land cost, logistics cost, bank borrowing cost, electrical / natural gas cost, human cost, etc. Take Shanghai as an example. Because it is not the place where raw materials are supplied and the manufacturing cost is too high, the manufacturing industry has become weaker and weaker. Levis is said to have more than 20 million turnover in Shanghai, but its profit is only 400000. As a labor-intensive industry, garment factories are becoming more and more difficult to recruit workers.

Corporate management and the aging of garment business owners themselves are also a problem. "At present, these garment business owners are very old. Many of them are 50 or 60 years old and lose their momentum. In addition, in recent years, the momentum of Internet technology is very fierce, many people are less and less enthusiastic about investment in industry, and the traditional clothing industry has also been affected. ". Wang said.

03 "Zara has 200 designers who are responsible for flying around the world and watching various shows every day"

There are so many reasons to explain why the life of traditional clothing enterprises is not so easy, but if we want to find out one of the most noteworthy reasons, it may be the impact of this generation of young people who are accustomed to Internet life on the clothing market.

"With the upgrading of consumption and the post-90s group becoming the main consumption force in the market, two new changes have taken place in the clothing Market: on the one hand, the mainstream consumer groups' demand for personalization has gradually increased; on the other hand, the awareness and concept of brands of these post-90s generation are weakening." Wang Jinhua told krypton.

Young people tend to buy different clothes instead of the same pop up items all over the street. Their emotional appeal is stronger and stronger, and the pursuit of personalization also makes the market demand changeable. At the same time, it is difficult for these young people to name a strong domestic clothing brand immediately. Apart from suits and other more serious occasions, they rarely have a unified brand awareness. This is also reflected in the cosmetics and luxury markets.

"In the past, girls must buy LV bags, cosmetics must buy Estee Lauder, but now the post-90s have no such idea. They seem to pay more attention to other things. For example, in South Korea, there was a cosmetics brand that was very cheap and not good at efficacy, but they would design the cosmetics bottles very cute and the stores were designed to be very pink, but they sold very well. " An Internet company that does cosmetics live broadcast said.

A few years ago, when MetS Bonwe invited Jay Chou to be the spokesperson, this domestic clothing brand was still a synonym for fashion in the eyes of many young people. In the first half of 2015, the company made its first loss in seven years. Four years ago, their annual net profit exceeded one billion.

"From a billion profit to a loss, the biggest problem of American bond is that the family business is stagnant and has no innovation. The market environment of Meibang when it was founded in 1995 was totally different from that of today. At that time, the group of consumers that caught up with was reflected in the change of generation. Meibang continues to only do marketing and marketing, but its management, design, inventory, supply chain and other aspects, UNIQLO and Zara are completely out of the way. In the past, people thought that Meibang fashion, but now users lose interest, and many of the market has been snatched away by international fast fashion brands. " A clothing industry source told 36 krypton.

From fashion to out of fashion, this step change of consumers' brand impression is almost fatal. The brand impression is related to the commercial anticipation of Meibang. When they are increasingly unable to keep up with the trend and grasp the needs of consumers, the large-scale production of clothing does not meet the needs of young people, which will lead to overstocking. In addition, young people have become the main force of online shopping. As a stable sales channel, e-commerce impacts on the operation of physical stores, and the loss of position is a natural result.

When the consumer side changes, and the production side is insensitive to changes, the players who can't keep up with the fast changing rhythm will be out of touch. In contrast, Zara, a fast fashion clothing brand, has achieved the speed from design to shipment within 15 days by using small batch and rapid response chain. They are always faster to catch the current trend, closely adapt to the changes of consumer side, and launch the appropriate style.

"There are 200 designers under Zara. These designers fly around the world every year to see various shows and explore fashion elements, or to put it another way, they call it copy design. These designers will immediately entrust the design to the process manufacturer, and then produce a batch of styles in small quantities. They will use the fastest way of transportation - air transport to the store for sale, and then see the market reaction. In Zara terminal stores, pad is used for sales statistics, and the store manager will make preliminary prediction according to the local sales market, and then summarize the data to the headquarters and then transfer the goods, twice a week. " A person in the industry explained to me how Zara works.

This operation mechanism ensures that Zara can always provide the latest and most abundant fashion styles in stores, so that consumers have the reason to continue to buy in the store. Moreover, the small batch mode can quickly sell the clothing, and the most annoying inventory problem can be avoided.

However, closely fitting with the needs of consumers is only the performance of the clothing industry which is partial to the front end of the market. The reason why most traditional clothing brands can't stick to the users in the front end is that the reaction speed of the back-end supply chain can not keep up.

How does Zara solve this problem? "Zara will have several measures to alleviate the problem of long reflection arc in the supply chain.

First of all, it is not completely catering to the consumer market. Another change factor of fashion fashion is from the fashion circle. Zara will let them design from the bottom of the fashion design elements.

For example, at the beginning of the year, they will do color planning, which often comes from the fashion circle. When these plans are made, Zara will ask its suppliers to prepare the dyeing semi-finished products of the large frame first, so as to save the later reaction time. And if you look closely at Zara style clothes, you will find that the bottom cloth of these styles is almost the same type, because only in this way can the pressure of the fabric factory upstream be reduced.

In the end, Zara has never been a blockbuster. They even do limited hunger marketing. All these measures, combined with the strong position of Zara brand, the supply chain is willing to cooperate, and it is possible to rapidly produce small batches of clothing. " The industry analysis.

Similar to Zara, Han Du Clothing Co., a fast fashion brand in China, has taken a similar approach to solve the supply chain problem. A person in the industry told me that the whole process operation mechanism of single product is adopted by handu Clothing Co., Ltd., which is led by the market, design and planning team, makes real-time adjustment according to the market response, realizes the analysis according to the sales data, and predicts the market at the same time. Because of the high requirements on the supply chain, it is easier to achieve single product.

On the contrary, many small domestic manufacturers often bear the pain to meet the changing demands of the market. However, once the fabrics are changed, the reaction speed behind them can not keep up with it, because it is very difficult to do the whole category, and the supply chain needs to be rebuilt.

04 "China actually has the earliest flexible supply chain, which is the small workshop model"

In recent years, the flexible supply chain was proposed to meet the needs of the consumer market.

The traditional supply chain model is the supplier market, where consumers buy what the enterprise produces, which is related to the enterprise products; now the demand side is dominant, and the emotional demand is stronger and stronger, but clothing enterprises are forced to cater to consumers, so consumption is the leading factor. Small batch and fast demand of consumers.

As a result, this market change has prompted garment enterprises to face a transformation: in the past, they used to produce large quantities of goods in a year and then distribute them. Now, they are likely to cause overstocking. They need to cater to the market and return orders after selling well, so as to reduce clothing inventory.

The new requirements for the supply chain are as follows: the original chain operation was to make production plans at the beginning of the year, fabric manufacturers began to organize grey cloth, dyeing process, etc., and then delivered them to garment processing plants for processing. After production, garment factories handed them over to brand manufacturers, and then the brand manufacturers distributed goods. Now, due to the unstable market demand, frequent, small batch and unstable orders have become the mainstream, requiring fabric suppliers The clothing factory caters to the change of the brand, so it produces the concept of flexibility (rapid response chain). Flexibility is to leave flexibility space for supply chain.

"Strictly speaking, China's flexible supply chain actually came out very early. The small workshop model is a kind of flexible supply chain, which is flexible enough. But for garment factories, industrial production is standardized. The machines and equipment in the factory need to adapt to the flow production. If we want to create a flexible supply chain with the same speed and quality, we need to see whether the production line can adapt to the personalized production demand. The same is true for fabric factories. In the past, there was no VAT charge for more than 1000 meters. Now, the cost of small batch production is rising. Fabric factories can only use price increase or adjust equipment flow to respond to speed. " Wang Jinhua told me.

"Most factories generally don't have the courage and capital to do it. At the same time, the transformation is also very difficult. A large brand usually has a few hundred pieces per order, but there are many SKUs, so the requirements for the factory to transform the production line are very high. " Liu Chao also told me a similar point of view.

Although it is difficult to transform the flexible production line, the demand of reverse customization is becoming more and more obvious. There may be only three types of manufacturers that will continue to adhere to the mode of industrialized mass production: the first is enterprises with strong brands, which will not cater to consumers, but will guide consumers in a forward-looking way; the second is enterprises with strong sales channels, which occupy all the long tail and support the standardization of chemical industrial production; and the third is the export-oriented enterprises, which will not cater to consumers but guide consumers forward-looking Our products are mainly sold to Africa and other third world countries and regions.

For most garment enterprises, transformation is almost necessary. "China's clothing enterprises started to do OEM, and there were no clothing brands. Now, with the increasing cost of profit, garment enterprises find that the opportunity to do OEM is getting smaller and smaller. If they don't do their own products now, they will go bankrupt." Wang said.

Therefore, the first problem is that the enterprises will not be able to enter the market if they do not want to enter the market. From the perspective of their own operation, it will be a general trend to attract the purchase with the uniqueness of the commodity and organize the rapid production to launch. Therefore, more and more clothing factories will start to adopt this mode.