Zhejiang apparel industry out of business innovation and the development of homogeneous competition

Published: 07th April 2011
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With Ningbo Shanshan Group multi-brand operations, Wenzhou U.S. Waters? Bonwe group business models such as virtual business successful launch of clothing, Zhejiang escape from the "manufacturing" and development.
"Most apparel companies are from Zhejiang, the manufacturing sector started, often a lack of commercial imagination." Vice president of Zhejiang Garment Association, Mr Chan said, "can not imagine such an international clothing brand Zara in China, with its successful business operation, only the Shanghai Nanjing Road of a flagship store every day sales of 100 million won a year nearly 4 million women's market. "
Chan Kwok-keung said the Spanish brand Zara winning a unique business model. Zara positioning side, select the best site built flagship, the scale is equivalent to a small shopping mall. Customers are free to store the selection, fitting, as consumers, especially young people to pursue individual to bring a distinctive shopping experience.
Rely on hundreds of designer, Zara designs each year nearly 12,000 kinds of style, a product from design to shelves, only 10 to 15 days, with the domestic garment enterprises in the period 6 months in sharp contrast, and each style in store with a number of models are limited, the new shelves period not more than two weeks. This gives consumers the impression of two: first Zara clothing sales fast, the second is the store is always new. Zara also through the effective use of information technology to achieve the control link for each business. Zara store managers are responsible for the sale of goods, and to forecast demand orders to Headquarters, Headquarters summary of that information through the Internet, the fastest production and delivery organizations.
"Zara has brought a new brand and business model." Zara has been doing OEM Hangzhou Hempel Group Chairman Gao Zhiwei sighed, "is the garment manufacturing industry, the thinnest part of the profit chain, a large number value from the design, distribution, service, brand. "
"China's garment industry has experienced 20 years of development, although the quantity and quality has been greatly improved, but still in the bottom of the world's apparel chain." Mr Chan said. Zhejiang, for example, in 2005 the province garment export delivery value of 51.8 billion yuan, ranking the nation, but the average unit price of exports is only 3.7 U.S. dollars.
Get rid of homogeneous competition
Zhejiang CEOs talk about the number of garment enterprises to improve product value, industrial upgrading, from how to improve the equipment used to increase the research and development, improve product quality to consider. "Almost all world famous brand of apparel products are produced in Zhejiang, indicating the quality of our products have been bad." Youngor Group Vice Chairman Li Rugang said, "Younger present only industry brand, is not a business brand, not a designer brand, not to mention shirts do consumers think of first Younger. "
"Domestic consumer demand for apparel has already not 'durable', but more personalized experience and to meet the needs of multi-level consumer psychology." Keung explained, "Many apparel manufacturers failed to grasp the change in time."
Stresses beyond the manufacturing industry to consider upgrading, on the one hand, there is the quality of domestic brands is not the equipment, technology, the key is management. On the other hand, in the clothing industry, services, and the value of circulation beyond the manufacturing sector the number of times or even 10 times more potential.
"Zhejiang apparel industry in both product and industry patterns showed homogeneity." Mr Chan said. Men with the largest base in Ningbo, for example, products are mainly shirts and suits, more than 2,000 clothing enterprises in the vast majority of processing enterprises, the national clothing brand have 12. However, a fabric processing region in Italy more than 10 000 enterprises, only 10% do the end product, the rest are to be supporting all aspects of the enterprise; in the terminal business in 1000, each only do 2-3 different products. Product, format differences within the region to ensure the formation of good industrial chain collaboration.
Homogeneity led to the majority of Zhejiang large, medium and small garment enterprises focus on competition in the processing area. According to Zhejiang Garment Industry Association survey, many small and medium enterprises by the brand awareness is not high, underemployment, and lower clothing prices and other factors, far less effective large-scale enterprises. "If all firms are crowded in the manufacturing field, the end result will be a part of the small and medium enterprises closed down, while the strength is not strong in large enterprises become an international brand factory." Mr Chan said.
Innovative business models
"Most developed countries garment industries apparel is defined as the 'fashion industry', covers the design, production, circulation, advertising all of the forms." Mr Chan said, "but the domestic apparel industry has also limited in the 'manufacture? Sales' link chain is very short, if the extension of industrial chain, Zhejiang apparel companies in each link are promising, the key is to identify the different enterprise's own position, cluster communication between the horizontal and vertical to enhance cooperation and achieve shared services. "
"Powerful conglomerates, such as Youngor, Firs, etc. should be main attack brand management, marketing channels and innovative business models such as the high value-added part of the region 2 to 3 strong consumer brands." Mr Chan said, " majority of SMEs is mainly responsible for processing, and other links, do create the brand. "
Garment domestic channels, for example, there is much room for upgrading the service sector. Zhejiang Garment Association survey found that although the domestic department store decorated luxury rental business area but the main way of profit, while not taking into account the specific characteristics of the brand, the other consideration is not enough customer demand. The company self-built brand stores can hardly reflect the content and unique shopping experience.
"Familiar with the domestic garment enterprises 'production? Sale' was a marketing model, the future development of garment industry of Zhejiang is one such way to produce Ding Xiao upgraded to the market to decide the marketing mode of production; other hand, building an innovative business model around the brand, "vice president of China National Garment Association Fengde Hu told reporters. "In addition to Zara this fast fashion business model to meet, the Zhejiang clothing enterprises can take advantage of opportunities to change the current domestic retail, small and great use to the team the way into the establishment of commercial production and marketing integration as the core business model, reduce transaction costs. Currently, the fashion industry of Zhejiang Ningbo Shanshan Group has emerged multi-brand operations, Wenzhou U.S. Waters? Bonwe innovations such as virtual business model, these companies have achieved good results. "

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