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The Traditional Agent System Of Clothing Industry Will Come To An End, But E-Commerce Can'T Save You

2022/7/18 20:14:00 2

Clothing Business

With rusty iron doors and mottled walls, four elderly female workers are shuttling among more than 40 computerized flat knitting machines to make Christmas blankets. Soon, they were transported from Changshu to North America and Europe, and entered the shelves of Costco, Wal Mart and other channels, adding some color and joy to the festival.

The output value of China's textile industry is more than 10 trillion yuan, which can be called the trillion empire under the public's eyes, and the textile and clothing industry is the dazzling crown of the Empire. Changshu is undoubtedly one of the most dazzling pearls in the imperial crown.

Changshu is located in Taihu Plain. Since the economic center of Song Dynasty moved southward, Changshu has always been an important grain producing area in China. Today, Changshu has China's 100 billion level textile and clothing industry cluster, mainly autumn and winter clothing, especially down jacket and jacket; In recent years, it has been extended to women's wear, T-shirts and other categories.

However, there is also a potential crisis under the reputation. With the increasing awareness of environmental protection and clothing prices in the past, the supply of textile and clothing has increased; They either take the initiative to transform, or transfer out, or be replaced by emerging industries.

"As you can see, it's not entirely labor-intensive." Xie Wenying, founder of Shengxiang knitting, told Yibang power. She started her business for more than 20 years. She not only OEM for overseas brands, but also opened retail stores in Taobao. Last autumn, the 16 year old factory was about to expire, and Shengxiang knitting faced the choice of closing down or transferring.

When they are struggling, the outside world has changed. New materials, intelligent manufacturing, digitalization and fashion design are turning textile and garment into new industries, and functional fabrics and unmanned factories are in hot demand. In Europe, America and Japan, which have already completed the industrial transfer, most regions still have R & D and parent factories. For example, Ishikawa and Fukui in Japan were once important textile industry clusters, and then transformed into carbon fiber composite material centers.

Compared with land rent, environmental protection and labor force, the new technology transition and consumption changes have caused a greater gap for textile and clothing. In Changshu, the application of new technologies and structural changes are going on at the same time, but this may be difficult for the first generation of entrepreneurs to complete.

  01、 Structural contradiction behind 70% return rate

There are 293 prefecture level cities, 388 county-level cities, 1312 counties and 7693 townships in China. The number of clothing stores and the overall consumption power of these places are not low. In the past, Changshu's clothing was distributed to these places through the first-class offline channels.

Until five or six years ago, in the autumn, vehicles from all over the country would block Changshu clothing city. However, since then, with the growth of online channels and small batch purchasing, the former congestion has disappeared.

Many Changshu garment enterprises told Yibang power that in recent years, many stores have crossed over agents and directly look for factories to place orders. The owners of 3-5 offline stores or online stores gather together to look for the supply chain in Changshu. They will place orders only when they see the spot at the gate.

"If you don't have an order, you have to give it to the next one in one color." A large factory owner told Yibang power, "there is no threshold now. If you don't do it, someone will do it."

Maybe the large-scale manufacturing system will collapse according to the current situation. Without big customers, the finished products produced in large quantities may become inventory. At present, Changshu has only a few large garment factories with more than 1000 employees, and few factories with 500-1000 employees.

Small batch and multiple purchases have gradually become the norm, and the production end is also fission into the form of large factory + satellite factory. Usually, after a large factory receives an order, it will split the order into several small orders, take out a part and subcontract it to the satellite factory.

"I think if you have to pick up a small order, it's not much different from your retail business." The boss told Yibang power, "in this case, you should do retail." In fact, in recent years, many Changshu factories and supply chain enterprises have begun to explore retail business, or serve e-commerce retail, many of which provide a consignment.

In 2020, the outbreak of Xinguan epidemic will accelerate the transformation and exploration of Changshu clothing. "The situation forces us to try live and online channels. You can't do it without trying." Many factories take ready-made products to online sales, found that the effect is not ideal. "Live with goods, 99% of the clothing photos look very good, but the fabric is cheap, simple, and the price is also very expensive."

Changshu clothing brand D is mainly for men's wear in autumn, winter and spring. Its products include jacket and down jacket. In the past, it was sold in thousands of stores across the country. The ex factory price of jacket is about 150 yuan, and that of down jacket is about 200-300 yuan. Put on the live broadcast platform such as Shuo Yin, I found that the online peers sold cheaper than their factory price.

"If you only look at the pictures, a piece of clothing may cost 999 yuan. When you get the clothes, it can only be 199 yuan. To put it bluntly, it is to sell a style." The founder of the brand told Yibang power, "the pictures are beautiful, and the models look good, but its quality and workmanship can only support 199 yuan."

Many factories have tried to replace materials and come up with a low-cost product to sell in e-commerce and live broadcasting rooms. Most of the results are not satisfactory. In addition to the lack of operation related talents, another reason is that the return rate of live delivery is too high.

During the period of 618 this year, the return rate of small and medium-sized sellers in the category of clothing is almost close to the limit - more than 70% of them belong to the consensus, and some businesses even approach 90%. High returns push up costs and prices, and sellers suffer.

On its B side, high return rate increases the choice cost of consumers. "It's rare to return goods at ordinary times, but the rate of return in these two years is too high." When it comes to buying clothes in the last ten days of this year, the consumer will not return the clothes for six months. If I don't want to buy them back, I will return them for six months

High return rate has a self circulation effect. If the return rate is high, the sales price needs to be increased. If the price of the same product is increased, the return rate may be increased. If there are no more channels to digest these returned products, businesses may be dragged down.

Last summer, Yibang power conducted a survey in Changshu and found that many factories gradually put their focus on the transformation of the production end after a round of trial. The flexible production with the characteristics of small batch and many times needs the factory to carry out digital transformation, so that the data of the whole production process can be transparent and visible, and even the data of the production end and the retail end can be connected.

  02、 A rise and a shortage, leading to a marginal revolution in the clothing industry

If we say that the change of consumption behavior and channel form is a gradual change process, clothing enterprises can gradually complete the transformation through learning and transformation, then the shortage of labor force is a more rigid constraint. In Changshu, the shortage of workers and the resulting challenges are even more urgent.

According to China's latest census data, the number of working age workers aged 16-59 has dropped by 40 million in the past decade. The number of young people who are willing to enter the clothing factory is less and less.

The younger generation would rather enter the delivery, express delivery and catering than enter the clothing factory, earning more than 6000 yuan a month. In Changshu, the children of local people seldom want to enter the workshops and factories any more. Most of the workers come from the central and western regions.

In the clothing industry, except for some products such as woolen sweaters and T-shirts, which can be produced by automatic equipment, the role of workers in most products and links can not be replaced by machines. Especially in Changshu's down jacket and jacket, automation equipment can only replace part of the labor, such as down filling and embroidery.

After the Spring Festival every year, the biggest headache for the boss of a clothing enterprise is that two thirds of the employees leave the company or negotiate with the boss. "The boss of the clothing industry is actually very hard-working, really tired." A factory owner told Yibang power, "when you have a bad year, you lose money, but the employees' money can't be in arrears, and it will increase a little every year. If you don't increase, OK, I won't do it for you and go to another company."

The annual output value of a textile and garment factory is about 20 million yuan, and the net profit can reach more than 10% in the early years. In recent years, the labor cost has been rising, and the net profit has been falling all the way. At present, it is only about 5%. During the peak period, there are more than 80 people in this factory. Now there are only 40 people. Most of them are old people with more than ten years' service, and the least are four or five years old. Their average monthly salary is more than 6000 yuan, but it is still difficult to recruit young workers.

The wage of skilled workers in Changshu is about RMB 8000-10000 in peak season. For a down jacket produced in Changshu, the labor cost has accounted for 60% of the factory price, while the cost of raw materials is only 40%. According to local businesses, recognized pay is still rising rapidly.

In order to cope with the shortage of labor and the rising cost, many garment factories have been transferred to the central and western regions and Northeast China. The raw materials and accessories are still left in Changshu, processed in other places, and then transported back to Changshu. The other is to retain the parent factory in Changshu and subcontract some orders to other satellite factories. In order to complete the efficient operation of the supply chain, the digitization of production and supply chain is first applied in these enterprises.

The founder of a children's wear brand told Yibang power that after the transfer of production links, the labor productivity of the new factory was low, usually only about 80% of the original. However, they are still willing to transfer out. First, local labor resources are stable, which can ensure stable production capacity and timely delivery. Second, after a period of training, the labor productivity in these areas is rapidly increasing.

Many enterprises that continue to stay in Changshu to develop and grow are trying to replace people with equipment and technology, starting from the places where they are most likely to be replaced. In order to solve the problem of textile pollution, colored yarn and other new materials are also entering the local production link. In the post-processing and quality inspection, image recognition products based on artificial intelligence technology have appeared. And the robot arm, also entered in the fabric and clothing handling link.

At present, the textile flat knitting machine is widely used. Stoll is one of the world's top five computer flat knitting machine brands (Germany Stoll, Japan's Shima Seiki, Switzerland's Steiger, Italy's pluodi, and China's Cixing). A new Stoll flat knitting machine costs 600000 yuan. In recent years, due to strong demand, the price of second-hand Stoll flat knitting machine has also risen to more than 300000.

  03、 To bridge the gap, we mainly rely on these two types of people

Compared with the land rent, environmental protection and labor force, the new technology transition and the change of consumption behavior cause a greater gap for textile and clothing. Now, Changshu clothing industry is in a delicate key point, on the one hand, it needs to transform from traditional textile and clothing and digital, on the other hand, it is also facing the transition and inheritance of two generations.

Changshu is a typical representative of "Southern Jiangsu model" written by sociologist Fei Xiaotong. In the 1980s, private enterprises in southern Jiangsu developed rapidly relying on township enterprises; Most business operators come from farmers or workers.

At the beginning of the WTO, China has entered the WTO with the advantages of being flexible and hardworking in every corner of the world. As the first generation of entrepreneurs, they laid the foundation of industrial development, and through the form of industrial belt, they developed and expanded collectively and went to the world.

However, each generation has its own limitations. The gap brought by the new technology transformation and consumption behavior is much larger and deeper than in the past. Now, the first generation of entrepreneurs has gradually aged, and many second-generation entrepreneurs are or have entered these enterprises. Changes driven by new technologies may be made by second-generation entrepreneurs.

At present, in addition to bosden and other enterprises successfully completed the second generation succession, more Changshu clothing enterprises, such as Jinchen, xinkaisheng, longdafei and other leading enterprises, are still led by the first generation entrepreneurs on the whole.

Manufacturing industry involves a long chain. In addition to routine business, it also needs to deal with more complex relationships, which is what our parents are good at. For example, after the second generation entrepreneurs take over, they need to deal with the team led by their parents and the elderly. They often need years of accumulation to inject fresh blood into enterprises.

In addition, the manufacturing industry is an asset heavy field, with low input-output, hard work and tiredness. Therefore, many second-generation enterprises are not willing to inherit their father's business. "Digitization is a system engineering. If the next generation doesn't want to do it, the previous generation will not be able to do it for a few more years. What's going to spend so much time doing, and still can't understand." Said the founder of a brand.

With the accumulation of the first generation of entrepreneurs, the second generation of entrepreneurs are more likely to do something more interesting on this basis. At present, many second-generation entrepreneurs have entered the enterprise and are doing some specific work.

For example, in 2016, a OEM company was led by her son-in-law to do Taobao store, mainly selling explosive products and tail goods, with a customer price of about 100 yuan and a single store selling about 1 million yuan a month; Another leading printing and dyeing enterprise, the second-generation entrepreneurs introduced live delivery and anchor resources from Hangzhou into Changshu, not only serving its own enterprises, but also signing contracts with local enterprises to serve Changshu's clothing ecology.

However, inheritance alone is not enough. Another new force to promote the digital transformation of Changshu is entrepreneurs.

Changshu is the name of China's textile and clothing industry chain is quite perfect and rich. Many towns under its jurisdiction have their own industrial clusters: Yushan is a famous town of cold clothing; Haiyu town and Shajiabang town are well-known in the country for leisure clothing; Meili town is a famous town for warp knitting; Xinzhuang Town is for knitting. In addition, Changshu also has a large professional clothing market in China.

In recent years, some young entrepreneurs are bringing new hopes and opportunities to Changshu. In the upstream, some people enter the upstream fabric field and become the supplier of international famous brands, while others spend a lot of money to purchase equipment, hoping to become the next Shenzhou International in the textile field. More brands such as rongri and Guibu are coming closer.

In a more secretive corner, digital technologies such as 3D volume measurement, 3D fitting and VR shopping are entering Changshu, and technologies such as virtual reality, artificial intelligence and big data are also being used in the field of clothing. And all this starts with the younger generation.


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