China'S Garment Industry Needs To Strengthen Its Competitiveness

In the first half of 2008, the labor industry in the Yangtze River Delta and the Pearl River Delta experienced cold currents, and the garment industry took the lead.

This phenomenon reflects the competitiveness of China's garment industry and challenges the "clothing industry is one of the most competitive industries in China".

We have to think: what is the competitiveness of China's garment industry since the reform and opening up?

Does the Chinese garment industry really occupy the competitive edge in manufacturing?

Can the "OEM-ODM-OBM" upgrading road of Xingxing new country in East Asia be the main way to upgrade our garment industry so far?

China's garment industry still needs to strengthen its competitiveness. In recent years, China's apparel industry has been eye-catching in the manufacturing links of the apparel industry chain.

From the table on the right, we can see that in 1994, China's garment industry ranked first in the world in 16.7% of the international market share, 7.8% higher than that in the second place in Italy. Since then, the international market share of China's garment industry has been ranked first, and by 2006 it has even been higher than the total sum of 25 European Union countries.

From this point of view, China's garment industry has certain advantages and its international competitiveness is constantly improving.

But can we assume that our garment industry has accumulated enough strength?

To this day, the international division of labor has completed the pformation from industrial level division to value chain division of labor, and garment industry is no exception.

The asymmetry of the strength of the enterprises in the global value chain leads the leading enterprises to grasp the strategic control power and have the coordination and management power to the global value chain. The whole value chain presents the power and governance structure of Pyramid type. Moreover, the asymmetry of this power leads to a great difference in the added value of different links.

In the clothing global value chain, the design and sales link is a strategic link in the value chain, so the added value is high, while the manufacturing link is a non strategic link with low added value.

According to a Japanese data, the added value of the garment industry has become 19%, wholesale 15% and retail 36%.

A garment factory as an example, the Japanese clothing brand XIMA GI (Japanese pliteration) produced a cotton 60%, polyester 35% low-grade women's coat: according to Japanese requirements, the garment factory purchased raw materials from the enterprise, the factory purchased material price of 19 yuan, sold to Japanese wholesalers 28 yuan, wholesalers to the first class agent price 55 yuan, marked on the label supermarket retail price is 1890 yen (according to the trading period of 100 yen =6.42 yuan), about 121 yuan, can calculate the added value of each link, production link 9 yuan (28-19), wholesaler 27 yuan (27), retailers for the yuan yuan. Zhejiang

Therefore, it is necessary to assess whether the clothing industry of the country has advantages in the strategic link of the global value chain.

If we want to gain competitive advantage in garment industry, the key is to grasp the monopolistic advantage in the strategic link of apparel global value chain.

The advantages of China's garment industry are mainly concentrated in non strategic manufacturing sectors, while the design and sales links with control capability and strategic position are relatively weak.

Because garment fabrics, accessories and accessories are often unable to meet the requirements of high-end clothing production, the export of domestic garment industry is dominated by medium and low-grade clothing for a long time, and the proportion of processing, sample processing and brand processing occupies the absolute majority of export garments.

In 2007, 50% of China's garments were processed by raw materials, and more than 30% of them were supplied by trademarks, styles and patterns of the importers, and only 10% of their own brands were processed.

The proportion of OEM, ODM and OBM has been as high as 7: 2: 1, and the OEM ratio is 90%.

Besides, in the composition of these 90% OEM export enterprises, the export volume of foreign-funded enterprises accounts for 1/3 of the total export volume.

The export volume of private enterprises is higher than that of foreign-funded enterprises, but the total number of enterprises is about 1.5 times that of foreign-funded enterprises.

Private enterprises are not only small in scale but also in a large proportion of private enterprises, which are built around offshore factories of foreign-funded enterprises, such as the introduction of a foreign-funded garment enterprise locally, and the private printing and dyeing factories and fabric factories soon built up nearby. Therefore, once a foreign capital escapes, a batch of private enterprises will fall down.

According to statistics, in recent years, the total value of industrial output of garment enterprises has accounted for nearly half of the total foreign-funded enterprises.

In short, the proportion of China's garment industry, the OEM and the proportion of the three funded enterprises in this link indicate that the great superiority of the garment industry in China is largely contributed by the foreign-funded enterprises. The competitiveness of China's garment industry, especially the competitiveness of the local enterprises, needs to be improved.

Through the analysis above, we can see that although China's garment export ranks in the forefront of the world, the garment industry in China is at the lowest value in the global value chain, and most of the local enterprises have not cut into the mainstream global value chain.

The basic question that needs to be considered in the upgrading of China's garment industry is: which part of the garment industry can enhance the right to speak?

Manufacturing is the lowest value-added link in the apparel global value chain. At present, the ability of local enterprises to cut into the lowest link of the global value chain needs to be improved.

Following the comparative advantage of Chinese clothing enterprises, manufacturing links should be the best breakthrough point in cutting into the global value chain.

If the clothing companies in mainland China can be promoted to the segment market with high grade and price like those in Taiwan and Hongkong, they can still get good added value.

The enhancement of manufacturing capability is beneficial to further extending the relative standardization part of the design and distribution links, thus strengthening the paction relationship with buyers.

Therefore, how to improve the advantage of production is the urgent task for our garment enterprises to survive and upgrade.

In order to achieve the long-term goal of OBM, enterprises should begin preparation when they substitute for processing.

OBM is different from the operation mode of generation processing. It focuses on the two activities of "innovative research and development" and "brand marketing". It has great differences with the OEM managers.

In the OEM mode, the challenges faced by self created brands are not only to grasp new activities such as innovation, R & D, brand marketing and market opportunities, but also to change business models.

In the OEM period, the extra learning required to go beyond the generation processing is helpful to reduce the limitation of mode pformation.

Therefore, Chinese clothing enterprises must adhere to the two way at the same time: strengthen OEM and prepare OBM.

Besides, the ideal cooperation between leading buyers and garment suppliers is a strategic alliance of mutual benefit.

This requires garment suppliers to have the "quick response system" supported by production capacity. The purpose is to promote cooperation between garment suppliers and retailers, so that the right products can appear where needed at the required time, reduce inventory risk and speed up inventory sales.

This quick response system is sometimes pnational, requiring the guarantee of product quality, style, quantity and time and the ability of all-round coordination.

With the improvement of the overall level of manufacturing suppliers and the increasingly fierce competition, manufacturing suppliers need to provide consumers with demand information, participate in the design to participate in the distribution of a full range of services.

It is necessary to order different products from different countries at different times, and to deal with the shortening pressure of the delivery date. Therefore, the establishment of information management system is an urgent task for garment manufacturing.

It can be seen that strengthening OEM requires the integration of talents, management, modern means of information and updating of technology and equipment.

Yang Jing: editor in charge