Jiang Hengjie: Clothing Power Needs Five Pronged Approach

This is a sober concern about the status quo of the industry; this is a good reminder and advice for the problems in the development of enterprises and brands; this is a heart to heart talk between Jiang Hengjie, executive vice president of China Apparel Association and entrepreneurs.

In the past 30 years of reform and opening up, China's garment industry has been developing rapidly and the competition is fierce. Recently, we found some problems in the research. The following five problems also illustrate a truth: any reform is forced, and changes with the times.

First, the improvement of labour productivity. The key solution to the shortage of migrant workers and the increase of labor costs is to do everything possible to improve our labour productivity. Compared with the neighboring countries, especially Southeast Asian developing countries and underdeveloped countries, do we still have the advantage of labor? If the problem of raising labour productivity is not resolved, one day, enterprises will be challenged or even eliminated.

Second, speed up the turnover of capital and goods. In the survey, we also understand that enterprises have made 3 billion yuan of capital a year to do business of 1 billion 500 million yuan. I think the business itself is already losing money, and putting 3 billion in the bank will earn a lot of interest. Where are our risks? On the other hand, massive production and massive backlog will not last. To strengthen the turnover of our capital and materials is the key to decide the competitiveness of an enterprise, decide the ability of brand profitability and transfer risk. This includes logistics distribution, that is, changing your existing process design. Raising the turnover of funds and materials is also a feasible means for enterprises to make profits, but it is only a soft technology transformation.

Third, we must control commercial channels. I always believe that China's clothing industry has been selling products and pricing. If we turn products into commodities, there is commodity value. Please consider carefully, weigh the pros and cons, mobilize the parties, so that our garment industry chain upstream and downstream have profit margins exist.

Fourth, the alliance between the brand and the franchisee. At present, the development of many brand enterprises depends on the rapid expansion of franchisees. There is a big problem: a large number of our franchisees are sacrificing at the same time, while the "die hard squad" is added, and a large number of merchants are invited to maintain the brand's market network. This time we felt very deep and worried about our research. How can it be? The relationship between brand enterprises and franchisees in the long run is an interest relationship. In principle, it should be equality, mutual benefit, risk sharing and common development. You put all the risks on the franchisee, you have to constantly organize the "death squads", then your interest is not reliable, not strong, not long lasting. The latest mode of some enterprises is to cancel the order system and realize the distribution system. All franchisees will pay the goods without paying back the goods. This is very dangerous. It is reliable, sustainable and win-win that we must realize the alliance of interests. Otherwise, this irresponsible alliance will break down one day.

Fifth, the application of R & D and high technology. Although the textile and garment industry comes from the traditional labor intensive industry, it has become a widely applied industry in the new era. This autumn and winter, the China clothing association wants to convene a "China Clothing Technology Conference" that has not been held for many years. It will share mature, leading and advanced experiences in the world, as well as our existing scientific and technological achievements and the technical projects that can be applied to a wide range of exchanges.