Textile Enterprises Accelerate Brand Strategy, Hoping To Survive "Cold Winter"

On the one hand, the appreciation of the renminbi and the rising manufacturing costs, on the one hand, the global economic slowdown under the influence of the US subprime mortgage crisis, and the difficulty in accepting the price rise due to the weakening of market demand. The Chinese textile and garment enterprises with small profits have encountered unprecedented challenges in the double-sided attack. Even textile and garment export tycoons are no exception.

Cai Gaosheng, chairman of Guangdong Silk Textile Group Limited (hereinafter referred to as "Guangdong silk spinning"), admitted in an interview with "First Financial Daily" at the 103rd Canton Fair that the export pressure this year.

Hard price increases

Guangdong silk spinning at the Guangzhou Fair, most of the clothing products quotes increased by 3%~5%. Cai Gaosheng believes that this may not be able to keep up with the magnitude of the appreciation of the renminbi. However, facing the downturn of the international consumer market and the increasingly fierce competition among the competitors, the clothing products can not be as large as the international grain price, but only for two or three months.

Since the beginning of this year, the US export volume has declined slightly, while the European Union has refused to accept the conditions for foreign exchange settlement in the current circumstances because of the cancellation of the quota market. However, the European Union purchasers who have always settled in the US dollar under the current circumstances have accelerated the acceleration of the appreciation of the US dollar, which is also eroding the profits of the export to the European Union. The two export markets are not optimistic.

As the owner of the business with more than 50 years of export history and 6 billion 300 million yuan of total assets, Cai Gao clearly realized that the cold winter is coming and waiting for him will be a hard battle.

At the Canton Fair, reporters learned at the Canton Fair that many textile enterprises had no idea of the bottom, too high prices, worried about losing orders, and if prices could not keep up with the appreciation of the renminbi, they might lose money. Textile enterprises generally believed that exports could be a very difficult year, and the situation could be better next year.

Cao Xinyu, vice president of the China Textile Import and Export Chamber of Commerce (hereinafter referred to as the "Chamber of Commerce"), said in an interview with our reporter that the factors such as the US subprime mortgage crisis will affect the export of Chinese textile and clothing products. It is suggested that the relevant enterprises should overcome difficulties by enhancing the added value of products, diversifying the international market and expanding domestic sales.

In order to promote industrial pformation and upgrading, the chamber of Commerce recently organized a leading enterprise in the textile industry to set up an innovation and development base in Kunshan and get the support from the Ministry of Commerce in terms of capital.

In addition, the chamber of commerce also organized more than 100 enterprises to investigate in Chengdu to promote industrial gradient pfer.

Customs statistics show that Guangdong's exports to the US dropped sharply in the first quarter, and the drop in clothing and accessories reached 25.6%.

According to the forecast of the first textile network, the critical line of textile and garment export enterprises will soon be exposed. At that time, a large number of enterprises with weak compression capacity will be eliminated.

It is estimated that the overall export price of textile and clothing will increase by about 7.18% this year, while the appreciation rate of RMB will be over 10%. That is, the appreciation will squeeze 3% of the profits of the textile and garment industry, while the average profit margin of the entire textile and garment industry last year is only around 3.9%.

The accelerated rate of RMB appreciation in 2008 will start to wipe out the meager profits of exporters, and the overall impact on the textile industry will be significantly stronger than the previous two years.

Accelerate brand strategy

The reporter recently learned from the interviews with Guangdong's home textile enterprises that compared with the simple processing export enterprises, the export profits of the enterprises with their own brands are relatively substantial, basically maintaining over 10%.

Guangdong silk spinning, which ranks the top ten in China's textile industry for many years, has been constantly optimizing its commodity structure. Its own brand export last year exceeded US $420 million, while domestic brand products amounted to 400 million yuan.

Wang Yongli, vice premier of silk spinning in Guangdong, once told reporters: "a few years ago, we launched some new models in our own stores. In a few days, we found that the clothing stores around us also introduced similar styles, but the prices were much cheaper than ours.

Therefore, some stores have been closed, but with the gradual improvement of the domestic market, the domestic sales situation is improving, and the establishment of a certain number of sales network terminals is the only way to build a successful brand.

Guangdong silk spinning plans to build more than 30 brand stores in major domestic cities and major cities such as the United States and France on the basis of the existing 100 franchised stores (cabinets), so that the total number of stores will reach 150 or so.

According to Cai Gaosheng, the brand network construction plan will be completed by the end of 2009, and the sales volume of brand products is expected to increase by more than 30% every year.

Shenzhen Xingyi Industrial Co., Ltd. (hereinafter referred to as "Xing billion industry") is also a brand to avoid low price competition clothing enterprises, the current domestic annual sales of over 1 billion yuan.

Xingyi industry launched its own brand in 2005.

Wu Mingde, the official in charge of the company, told reporters that Jue Du would enter Southeast Asia after gaining a firm foothold in the domestic market, and did not rule out the possibility of acquiring many international brands to expand domestic and foreign markets in the future.

Commentary comment

The famous "smile curve" theory tells the processing enterprise that only when we master the early stage R & D design and the late brand channel sales can we occupy high profits. The labor-intensive intermediate production link is the most unprofitable part of the whole value chain, and is easily replaced by the lower cost advantage of the peers.

Cao Xinyu, vice president of the China Textiles Import and Export Chamber of Commerce, believes that China's textile industry has begun to shift from heavy production to heavy market. This is a good sign. Powerful textile enterprises can make use of the opportunity of rapid development of domestic sales to create brand and occupy terminal sales channels, so as to pave the way for the internationalization of brands.