Cost advantage gradually loses the textile order transfer acceleration

Due to the substantial increase in labor costs in China, Japan's clothing and groceries companies will reduce their production ratio in China and shift some of their production links to Southeast Asia. At the same time, the advantages of Southeast Asian countries have become increasingly prominent and have become strong competitors that Chinese companies cannot ignore. With the development of various new types of trade protection and the threshold of green standards in developed countries, the path of extensive development of Chinese garment enterprises has become narrower and narrower. The era of relying solely on cheap prices to earn sight has passed, and the industrial transformation of refined production and brand development has passed. The road is imperative.

UNIQCLO, H&M, ZARA and other international brands are marketing China with their strong overseas style, leading the fashion trend. In the past, most of these brands were MadeinChina (Made in China). Today, attentive consumers will find that products from Southeast Asia such as Vietnam, Thailand and Cambodia are increasing.

In a H&M store in Beijing, the reporter found that the origins of clothing were varied, with clothes from “World Factory” from China, India, Indonesia, Turkey, Cambodia, Bangladesh, Morocco and Bulgaria gathered here.

However, the quality of garments from different places of origin is mixed. H&M's consumer Liu ** said: “My cardigan is made in Shanghai, and the quality is very good. Afterwards, I bought a piece of Indian product, obviously not as good as Shanghai. Cambodia’s The quality is the worst. The livelihood in Southeast Asia is still not as good as in the country."

Di ** who loves Uniqlo also expressed similar views: “Uniquku's production areas are all over Asia. I think the quality of production in Jiangsu is the best, and Dongguan in Guangdong is also good. Cambodia’s most unreliable, Vietnam’s is also awkward, Bangladesh. It's okay.” She used her personal experience to illustrate: “I bought a small knitted suit made in Vietnam. The button was too weak and I lost it in a few days.”

Lost orders Despite the good reputation of Chinese textile products, plans for international brands to transfer production to low-cost countries outside China are still in progress.

According to the "Nihon Keizai Shimbun" report, due to the substantial increase in labor costs in China, Japan's clothing and groceries companies will reduce their production ratio in China and shift some of their production links to Southeast Asia.

It is reported that Fast Retailing, which is owned by Uniqlo, plans to start from the low-cost clothing brand G. U. At the beginning, it increased the commissioned production to factories in Bangladesh and Indonesia, and increased the current production ratio outside China by 20% to 30% to 50%.

After 3 years, the MUJI plan reduced the number of co-operative factories in China from 229 to 86, the procurement rate from China to 60%, and wood products such as furniture and groceries also began to increase purchasing volume from Southeast Asia.

Bruce Rockowitz, president of Li & Fung, the world's largest trade buyer, said a few months ago that rising wages in southern China may force consumer goods manufacturers to relocate production and move "quickly" to lower costs in the next five years. Regions include Western China, Indonesia, Vietnam, and Bangladesh.

Following the Vietnam, Myanmar and Cambodia operations, Castle Peak Business will start commissioning production in Indonesia this year. The Southeast Asian factory will mainly undertake the sewing process, and the fabrics needed will still be sourced from Italy and China.

In addition to transferring commissioned production, some companies have also set up new factories outside China. Tokyo-based STYLE, a subsidiary of TSI Holdings, has invested 1 billion yen and has been building a new factory in Vietnam since August this year. Womenswear brand Honeys will begin production in a new factory in Myanmar this fall.

It is reported that in the past two years, the cost of labor in China has doubled and is now about five times that of Bangladesh. Since the sewing process relied mainly on the latest equipment and did not require excessive skilled workers, it gradually began to move outside China. However, currently only countries in China that have the capacity to undertake sewing and weaving operations around the country are China. Therefore, production outside the sewing process will continue to be mainly conducted in China.

Yin Guoxin, chairman of Chenfeng Group, known as "the world's largest OEM factory," confirmed to this reporter that since August of this year, orders for international brand customers have decreased significantly, and the shift to Southeast Asia has intensified. "Not only is the Japanese brand, but also the European and American brands. With the passage of time, orders will be less and less." Yin Guoxin bluntly.

However, he also stated that the medium to high-end products of the Chenfeng Group's enterprises are still relatively popular, and they have the advantages of complete industrial chain and exquisite workmanship. However, high-end products only account for 5% to 10% of orders, and in the context of international brands winning on the low-end low-cost line, they cannot compete with Southeast Asian countries.

According to the relevant person in charge of the China Textile Import & Export Chamber of Commerce (hereinafter referred to as the Textile Chamber of Commerce), the phenomenon that international brands shifted some of their production areas out of China began gradually as early as three years ago. For example, adidas’s ** statement has been publicly announced more than three years ago, saying that China’s wages are high and it has begun to move to countries such as India and Vietnam, where about half of their sportswear was produced in China.

At the end of 2008, UNIQLO's parent company, Fast Retailing Group, already had a joint venture with Hong Tai Textile Mill, Taiyuan Garment Factory, and a Bangladeshi company to produce fabrics and clothing in Bangladesh. While about 85% of Fast Retailing Group's products were originally manufactured in China, Fast Retailing intends to increase production outside China to 1/3 in order to reduce costs and reduce dependence on China.

Cost-competitive Advantages According to the person in charge of the Textile Chamber of Commerce, although the issue of order transfer has been persistent in recent years, this year's situation is particularly serious. Mainly because of the rigid increase in domestic labor costs, the price of textile raw materials such as cotton is too high, and many merchants cannot afford to increase the prices of Chinese products, and transfer large quantities of low-grade products to Bangladesh, Vietnam, Cambodia, and Indonesia.

Zhang Yanan, an analyst at Zero2IPO Research Center, further pointed out that since 2009, factors such as rising labor costs, *** appreciation, fluctuations in raw material prices, and rising interest rates have increased operating costs and have affected the international competitiveness of Chinese textile companies. "The cost of domestic wages has been rising, and workers' wages have risen by 20% so far," said Yin Guoxin.

The advantages of Southeast Asian countries have become increasingly prominent and have become powerful overseas competitors that Chinese companies cannot ignore. "The advantages are mainly reflected in the labor force, exchange rate, export preferences, etc." said the head of the Textile Chamber of Commerce.

First, labor costs in Southeast Asian countries are lower than those in China. According to a survey released by the Japan External Trade Organization (JETRO) in October 2010, the employer’s compensation burden is highest in China, reaching US$463 per person per month, which is significantly higher than other Asian apparel producing countries. The Philippines and Indonesia are Between US$250 and US$300, Vietnam and Cambodia are US$153 and US$125, respectively, and Bangladesh has the lowest US$85. Except for Bangladesh, the wage level of these countries is probably 1/4 to 2/3 of China’s.” The head of the Textile Chamber of Commerce said.

Second, the exchange rate of these countries’ currencies against the U.S. dollar may have fallen or may not have risen as far as China’s. “In 2005, *** rose 30% against the U.S. dollar, while Vietnam’s currency has fallen 24% cumulatively over the same period. One liter and one drop, both have significant gaps in cost. The Indonesian rupiah was between 2008 and 2009. With relatively large fluctuations, the cumulative increase over the whole period was about 8%. The Philippine peso’s cumulative increase was almost the same as that of ***, with 32%, but there was a rise or fall in the process, unlike ***, which only rose. The responsible person pointed out.

In addition, these countries have preferential policies for the reduction or exemption of tariffs on major markets such as Europe, America and Japan. Cambodia and Bangladesh are currently included in the list of the world's least developed countries. Exports to many developed countries can enjoy the most-favored-nation GSP. The Philippines, Indonesia, and Vietnam have signed economic cooperation agreements with Japan respectively. Clothing can enter Japan in a tax-free manner, but the fabric used must be produced in Japan or ASEAN member countries. The EU even allows one-step processing to fabricate fabrics locally, that is, to enjoy zero tariff on imports without having to consider the origin of the fabric. "Japan imposes zero tariffs on textile imports from Southeast Asian countries, while Korea, Singapore and China impose 8% tariffs," added Yin Guoxin.

A person in charge of the Textile Chamber of Commerce also pointed out that because Indonesia, the Philippines, Cambodia and other countries are currently in the textile and apparel supply chain is not perfect, especially the upstream spinning, weaving, as well as printing, dyeing, bleaching these links are to be developed, clothing The quality is lower than that of Chinese products.

The person in charge also said that China's textile and garment industry has a complete industrial chain, a large number of skilled workers, a long history of textiles and experience, so as to ensure the quality of clothing production to some extent. Therefore, some brands still favor OEM production in China. For example, in a HONEYS Beijing counter, the staff member Xiao Zhou told this reporter: “Our products are all produced in China, and most of our products are originated in Shanghai and Qingdao. Most of them are located in Jiangsu (Kunshan, Suqian, Jintan), Zhejiang Tongxiang, Tianjin, Guangdong (Dongguan), and Shandong.”

Forced corporate transformation and upgrading Import data from the European Union, the United States, and Japan showed that although China is still the largest supplier of textiles and apparel to the three major markets mentioned above, the growth trend in 2011 has significantly slowed. Chinese products accounted for a year-on-year decrease in the import share of the three major markets mentioned above, with the EU down by 1.7%, the United States by 1%, and Japan by 1.9%.

At the same time, the EU, the United States, and Japan have rapidly increased their imports from Southeast Asia, South Asia and other countries. In the first half of this year, the EU’s imports from India, Bangladesh, Pakistan, Vietnam, and Indonesia increased by 29.6% to 53.4%; the US’s imports from Vietnam, Indonesia, Bangladesh, and Cambodia increased by 18% to 29%; Imports from Vietnam, Indonesia, and Thailand increased by 23% to 49%. The market share of these countries has also increased accordingly.

Zhang Yanan, an analyst at Zero2IPO Research Center, pointed out that with the increase of various new types of trade protection and the threshold of green standards in developed countries, the path of extensive development of Chinese garment enterprises has become narrower. “Every indication shows that the era of relying solely on cheap money to earn an eye has passed, and the industrial transformation path of refined production and brand development is imperative.” said Zhang Yanan.

Yin Guoxin believes that the transfer of international brand capital will force the transformation and upgrading of enterprises, work hard on high-end products, and protect the high-end market. “We have been trying to transform and upgrade, improve product quality, enhance research and development capabilities, and invested large sums of money in equipment automation,” he said in an interview. "The transfer of capital is normal because capital is highly sensitive to the market and it seeks optimal allocation. We don't have to be surprised that Japan's branded OEM companies are moving to Southeast Asian countries. This does not signal the arrival of a "dangerous situation."" An official with the foreign trade company frequently said that.

The above officials also frankly stated that relying on the leverage adjustment of the tax burden, such as raising the export tax rebate or reducing the domestic tax burden, the company will eventually remain in place. "The key is to improve the quality of products. The government is only an auxiliary measure. Our export companies have strong dependence. After making money, companies do not invest in equipment and improve quality," he said.

The official's attitude towards certain foreign trade companies is quite "distressed and miserable". He pointed out sharply: "The reduction of orders is a lesson and warning for companies accustomed to OEMs. If we do not progress or innovate, we will only suffer from the increasingly fierce competition in the reality of relying on the advantages of intensive labor. It is also a good thing to upgrade and create a brand."

The infusion of babao tea requires the addition of boiling boiling water, so that the taste of each shot of tea will change slightly when drunk, because each ingredient releases its unique taste at different times.
When it comes to eight treasure tea brewing, the most worth mentioning should be brewing method in Sichuan teahouse. Sichuan tea division tea is very exquisite, they are a portable a special more than one meter long mouth tap copper pot, there are two trembling red ball, sharp spout to less than 4 cm from the bowl, boiling water is aimed at the cover bowl straight down, that is, fast and accurate, and such as " Su Qin back sword", " rebound pipa" endowed with artistic action, can be called a " rare". Turn up the water along the bottom of the bowl, ingredients by wet evenly, cover the tea cover bubble five minutes to drink. Sichuan babao tea and hui slightly different, mainly
Is in the choice of ingredients, usually according to the order first put rock sugar, then put the Siraitia grosvenorii, then American ginseng, licorice, Wolfberry fruit, red jujube, raisins, finally cover ingredients with jasmine tea, put two chrysanthemum. So rushed out of the tea soup color green, and can show you to elegant chrysanthemum. Drink with tea cover to float on the chrysanthemum gently through the first, and then gently sip, first taste is a shallow taste, swallow down after there is a faint scent, taste very good, make people relaxed and happy, that kind of special taste, let a person feel very satisfied. It can be said that babao tea and tea division has become a beautiful scenery line in Sichuan.

The so-called " three fort", in fact, is used to even cover the tea bowl and base plate three head, northwest people called three fort. Tea with this tea set, cover can keep warm, end up tea and not hot. As for the so-called " babao tea", generally by Maojian, fuzhuan tea or pu 'er tea with crystal sugar, red jujube, longan, white raisins and nuclear apricot and other mixed together to drink; Sweet and sweet, and tonic.


We are manufacturer of Bulk Tea in China, if you want to buy Blooming Green Tea, Bulk Black Tea, Black Tea Bulk, Bulk Organic Tea,  please contact us. The development of the company is inseparable from the trust and support of customers.We strive to make every product to customer satisfaction. Welcome to consult.

Bulk Tea

Bulk Tea,Blooming Green Tea,Bulk Black Tea,Black Tea Bulk

Ningxia Lechihui E-Commerce Co., Ltd , http://www.lechihui.com

Posted on