Transformation and Change of Employment: Diversified Ventures for Garment Enterprises

200 million shirts can be exchanged for a Boeing airliner. "China is a big country in clothing, but it is not a strong country in clothing." It has become a consensus among all walks of life. Transformation and change of business have become the path choices facing apparel companies and are related to life and death.

The secret of many domestic garment companies starting up is generally to achieve rapid growth through simple competition such as “heavy products, large quantities, large circulation, and low prices”. This creates an illusion for them, as if it can be expanded more quickly by sticking to the past success mode. The problem is that the market has never been static, and the model of success in the past may just be the cause of today's failure. The lesson of the unsuccessful inspection of Shanshan’s underwear in March is here.

Facing the Ocean, Spring and Blossom. In the office of Xiamen Trade Group Co., Ltd., you can occasionally see seagulls passing by the window. The weather in early spring is warm and humid.

Despite relying on excellent domestic sales business, Haopai Group successfully escaped the financial tsunami and defeated economic inflation. The 67-year-old Hongshou still decided to take a risk to embark on e-commerce.

In the past 30 years, as the board chairman of Haopai Group, Hongxuan has been cautiously careful. “So far there has been no single point in the bank.” Since the founding of Xinjiali Garment Factory (the predecessor of Haopai Group) in 1979, Hongxuan has never deviated from the clothing route. Heartless.

During the 30 years from the Xinjiali Garment Factory to the Haopai Group, the company’s economic growth, like China’s GDP, has continued to rise, and it has not suffered a loss for one year. “In 2010, the sales volume of Hao brand garments was close to 2 billion yuan, an increase of 30% compared with 2009.” Hong Hao set up on February 10 when he was interviewed by this reporter.

"I have done 31 years of clothing, never encountered such a cost increase in 2010, some fabrics rose from 1 meter 8 yuan to 17 yuan, workers' wages rose by 50% to 60%." Hong said.

The Haopai Group’s e-commerce project budget is 100 million yuan. It is planned to be officially launched in May this year and will eventually run independently.

"Non-professional" garment companies either transition or change jobs, this is the path choice placed in front of clothing companies, related to life and death.

“What men's clothing companies are now doing a good job of transformation and upgrading?” Younger’s chairman, Li Rucheng, has been irritated by the outside world’s doubts about the diversity of Youngor’s.

Zheng Yonggang, chairman of Shanshan Group, even stated on different occasions: "I don't care about clothes now. I'm investing."

As two banners of China's garment industry, Youngor and Shanshan Group's performance is quite subversive. A well-known business magazine once criticized Youngor in an article as "not working properly."

In 2010, Youngor successively raised 5.5 billion yuan to subscribe for non-public offerings of up to 10 listed companies. At a land auction held in Hangzhou, Youngor took a total of 2.421 billion yuan to buy two plots in the Shenhua area in Hangzhou and set a new record.

At present, Youngor is the largest real estate developer in Ningbo, and also owns Ningbo's largest import and export trading company, and is also a major shareholder of Ningbo Bank. Younger’s move in apparel, real estate and equity investments has allowed it to be seen as a model for the “primary business + investment” model of Chinese companies for some time.

The data shows that the operating margin of Youngor's flagship shirts has dropped from 50.23% in 2006 to 29.37% in 2009. In the main business revenue of Youngor in 2009, 6.9 billion yuan came from textiles and apparel, net profit was 440 million yuan; 5.2 billion yuan came from real estate, and net profit was as high as 2.8 billion yuan.

According to Youngor's 2009 annual report, about 86% of net profit came from equity investment and real estate. Among them, equity investment realized a net profit of about 1.625 billion yuan, accounting for nearly half of the company's annual net profit of 3.264 billion yuan.

Shanshan even more. It is not difficult to find that the “Firshan” suit store has gradually disappeared from shopping malls in first and second-tier cities. This is not unrelated to Shanshan’s investment of too many corporate resources in new materials and investment.

Shanshan is currently the country's largest supplier of lithium battery materials, and in the field of power batteries all involved in four other people difficult to overcome the core links: cathode material, anode material, electrolyte, separator.

Zheng Yonggang expects that the future will be the era of new energy: "The Shanshan will thus move from small-capacity battery materials to the automotive battery industry. If this industry scale grows up, the accumulation of Shanshan in the past more than 20 years will only be a fraction."

Previously, Zheng Yonggang repeatedly expressed his interest in the gaming industry in public and regarded the game industry as another growth point for Shanshan. Previously, Zheng Yonggang and Shan Shan Group had held approximately 29.89% of shares in Zhongke Yinghua, and later a large number of shares were reduced. At present, Zheng Yonggang holds 8.77% of the shares and remains the largest shareholder.

Data show that in 2010, China’s textile and apparel exports totaled US$206.53 billion, an increase of 23.6% year-on-year. In the domestic market, last year, the retail sales of clothing, shoes, hats, and needle textile products by enterprises above designated size reached 5874 billion yuan, a year-on-year increase of 24.8%.

200 million shirts can be exchanged for a Boeing airliner. "China is a big country of clothing, but it is not a strong country of clothing" has become a consensus among all walks of life. Wang Qianjin, editor-in-chief of China's No. 1 Textile Network, said that the reason for the export's rebounding beyond expectations was mainly due to the destocking of the West after the financial crisis broke out, as well as an explosive increase in demand during the post-supply phase.

“But this is only a short-term behavior. There is a lack of support for the recovery of consumer purchasing power. In the coming year, China’s textile and apparel market share will have limited expansion. Exports will no longer be the major source of profits for large companies. Some SMEs will face A severe test," Wang Qian said.

Statistics from the China Cotton Association show that in November 2010, the price of domestic standard cotton has set a record high price of 33,000 yuan per ton, which is an increase of more than 50% compared with October. Due to declining output and strong demand, the industry forecasts 2011. Cotton prices will remain high.

In the field of clothing, Shan Yonggang has already stripped about 70% of its production capacity and switched to outsourced production. In addition, it has 35 branches and more than 3,600 sales staff. Disbanded.

Unexpectedly, from November last year to February this year, a short period of 3 months, Shanshangufen underwear was inspected in Henan, Tianjin failed. The media asked: "Are there any loopholes in the coincidence or quality monitoring? The chairman of Shanshan Group, Zheng Yonggang, is committed to a multiple development strategy. He enters the game industry and returns, and he is betting on lithium battery new energy industry. He did not expect to encounter the backyard in the clothing industry. Fire."

Cui Tao, an apparel consultant, said that the secret of many domestic garment companies starting up is generally to achieve rapid growth through simple competition methods such as “heavy products, large quantities, large circulation, and low prices”. This creates an illusion for them, as if it can be expanded more quickly by sticking to the past success mode. The problem is that the market has never been static, and the model of success in the past may just be the cause of today's failure. The lesson of the unsuccessful inspection of Shanshan’s underwear in March is here.

"More than 90% of garment companies are driven by the integration of products and business operations. It is precisely because of the deep structural defects in the Chinese garment industry that many clothing companies can quickly grow through simple competition in the early stages of development. Suddenly encountered the fate of homogenous competition," said Cui Tao.

Some people also pointed out in the article: "It is really better to listen to people who say that they are investors. But in reality, they are all eager to regain their leading position in the menswear industry. Younger's multi-brand strategy and Shanshan's multi-brand internationalization are all due to this. "Younger also repeatedly emphasized that "We have been very hard in the apparel sector. Clothing is the foundation of other industries."

The difference between Li Rucheng and Zheng Yonggang is that even if Hong Hongtao establishes “Hongmentang Investment Co., Ltd.” with a value of RMB 200 million, it will also be involved in some financial and insurance industries, but it will not be involved in capital operations such as real estate and equity subscriptions. In the apparel industry, we are making a round of progress, focusing on long-term development."

"Overseas Development Business" and "E-Commerce Project" are the main actions of the brand in 2011. “The current planning is only based on brand image promotion. There is no sales organization set up overseas, and no specific sales target for e-commerce has been set. We are looking at the market outlook and potential consumer groups,” said Hong Hao.

Industry insiders point out that not only are the cards extremely discreet in the face of the Internet, but in fact, only a handful of apparel companies are doing e-commerce independently, and similar companies like Vanke are more marketing companies than manufacturing companies. Including seven wolves, nine animal husbandry Wang is also set up an official flagship store in Taobao Mall, only the Annunciation in the operation of the BONO website, but the sales situation is not satisfactory. Data shows that Seven Wolf’s 2009 financial report showed online sales of 3 million yuan, accounting for only 1.5% of total sales.

In the face of “new inflation” in 2011, it is crucial for companies to re-find the advantages that match their own resources. Not greediness is of course a corporate orientation, but at this stage the danger must be fully understood. The “Men's Clothing Industry Analysis and Market Report” newly released by the China Garment Association pointed out that capital helps companies achieve a new round of explosive development. The time when capital is king has arrived and it may not be brand warfare, not price warfare, not channel warfare, but capital warfare that will be launched in the menswear industry.