Home textile and apparel industry should straighten out the "two self" ideas and speed up the upgrade

Li Xueyong, governor of Jiangsu Province, recently invited 10 heads of textile and apparel companies such as Hongdou Group to discuss and discuss ways to cope with the situation. Textile and garment companies have stated that companies must accelerate their transformation and upgrading.

All along, textiles and garments are traditionally advantageous industries and important civilian production industries in Jiangsu Province. They rank among the “trillion-dollar” scale. The world famous brands, Chinese famous brands and well-known trademarks represented by red beans rank among the top in the country. However, in the context of this economic downturn, it also faces enormous challenges.

"The Standing Committee Meeting of the State Council held on September 12 to support the development of foreign trade and the "Several Opinions on Promoting Steady Growth in Foreign Trade" discussed and adopted were very timely and resolved the problems in four areas. First, the problem of corporate funds was solved. Such as accelerating export tax rebates and increasing bank loans; Second, easing the cost of SMEs; Thirdly, there is a very big increase in efficiency, which provides the convenience of customs declaration; Fourth, enhancing confidence is very important, policies can increase the confidence of export enterprises. Expanding the coverage of export credit insurance means that orders for small and medium-sized enterprises that they did not dare to accept have now been dared to take over.” Representative ***, Party Committee of the Red Bean Group and President Zhou Haijiang expressed their high degree of recognition.

“But we should see that our international pressure is very great. This pressure comes from two aspects: First, the European and American markets remain in a downturn and the long-term nature cannot be reversed; the labor costs in Southeast Asia are low, and the pattern of the entire industry shift is difficult to reverse. Garment companies strengthen their transformation,” said Zhou Haijiang.

“My advice is to create a 'two-self' company. First, build an independent brand. No matter how low the cost of labor in Southeast Asia, there are independent brands, that is, the market can not be transferred, and the market is yours. The second is to create independent innovation companies and improve the technological content. And quality, to digest the cost." Zhou Haijiang said.

Chairman of Shanghai Red Fuji Home Textiles Co., Ltd. Dong Fulong also agreed with the thinking of “two-self” companies: “At present, the development of the industry is facing the phenomenon of declining demand, high prices and high inventory. Traditional price competition is a dead end and must be promoted through the brand. Innovation and internal potential for transformation and upgrading."

In recent days, adidas, Nike and other international apparel and footwear giants have also added production lines in Vietnam and Indonesia.

Why these foreign brand companies' "outward movement" has caused a lot of impact on the Chinese foundries. In Zhou Haijiang’s view, because they are the owners of the brand, both in China and Vietnam, the dominant power is entirely in the hands of Adidas and Nike, and power cannot prevent it from switching markets. Only the gains and losses of interest measurement are its choices. Different market determinants.

Adidas and Nike's production of “move out” has sounded a warning for China's textile and garment industry. Zhou Haijiang said that foreign capital is also the maximization of profits. Once there is no profitable market in another market, he will not hesitate to leave. In this regard, in addition to adopting measures such as tax cuts for enterprises and improving the protection of labor rights laws, it is even more critical to cultivate a large number of independent brands with core technologies. Only in this way can we have the right to speak and pricing in a market economy, and then have the dominant power to divide the market.

On the other hand, both sides of the smile curve should be improved to improve the technical content and quality. “I think the 'Lewis turning point' of the Chinese population has already arrived. This is something that companies must face. Although it is hard for people to accept in the short term, in the medium and long term, it is a good thing to promote the transformation and upgrading of enterprises,” said Zhou Haijiang.

“Especially in economically developed areas such as Wuxi, the cost of labor, land, and other factors are higher than in economically underdeveloped regions. If the normal development logic is followed, large labor-intensive enterprises such as red beans should die, but the fact is actually the opposite. Red beans survived and lived well. Even after the financial crisis in 2008, red beans still maintained a double-digit annual growth rate. In 2011, the operating income reached 35.1 billion yuan, and the tax revenue in the first half of this year increased by 30%."

Why can red beans maintain healthy and stable development? Zhou Haijiang pointed out one of its “secrets”. The key is thanks to the transformation and upgrading strategy implemented in recent years. As a leading player in the apparel industry, Red Bean has completed its transformation from a production and management model to a creative operation model in recent years.

Since 2008, Red Bean has accelerated the pace of group transformation and upgrading, accelerating the realization of high-tech industrialization of traditional industries and high-tech industrialization. To compete in R&D and design, to be competitive, to be profitable to the brand, to establish a perfect chain monopoly system, to take the path of brand management, to create their own "smile curve", and to achieve transformation and upgrading through technological innovation and brand promotion.

“We changed from the original production and operation type to the creation of operation type, the original engineering center as a model factory, and the rest of the outsourcing. Our own energy is mainly focused on R&D and design. The front end is the creation and the back end is the operation. The Group has firmly grasped the three key elements of innovation: talent, platform, and investment, and its ability to innovate has rapidly increased, said Zhou Haijiang.