Chongqing Independent Garment Enterprise Development Road

Chongqing's "OEM economy", which has been battered by the financial turmoil, is now booming again. Not only did coastal costumes and OEM enterprises move to Chongqing, but even the "layman" of Zong Shen played an abacus for the brand clothing of foreign countries.

What is the way of the OEM of Chongqing clothing enterprises? Do they ignore the development of their own brands at the same time?

　 Enterprise dynamics

Zong Shen Zhongyi high-end garment processing

Zong Shen industrial group, a well established motorcycle and financial sector, is interested in producing high-end clothing and shoes and hats. 23, it is reported that at present, Zong Shen industrial group's Chongqing Zuo Shifu power machinery sales and Service Co., Ltd. has already started negotiations with the international garment brand enterprises.

"We are talking about enterprises in Brazil and Norway." Liu Yun, director of the Stationery Department of Zuo Shifu power machinery sales and Service Co., Ltd., revealed that in fact, Zong Shen has the foundation of producing clothing itself, and has been producing motorcycle racing clothes for a small scale, and has registered the "ZSR" brand.

For the reason why there are OEM production costumes, Liu Yun said that from the previous sales situation of Shen Shen racing clothes, the main customers were from abroad, and the buyers were mainly motorcycle enthusiasts. In the future, if bulk orders are received, the production capacity of Zuo Shifu is enough to support demand.

Zhang Yuanqi, general manager of Zuo Shifu power machinery sales and Service Co., Ltd., said that the main business of the company is the sales and service of motorcycles and the field of motorcycle maintenance. Zhang Yuanqi did not want to talk about the specific plan of OEM production of high-end clothing. He said only that the relevant departments were planning the design, and is expected to start the relevant plan in the two quarter of this year.

Cheng Qifei, vice president of the Chongqing Chongqing Fashion Association, believes that the ointment production of international high-end clothing can achieve gross profit margin of 20%~30%, and the profit is much higher than that of producing a motorcycle. Perhaps this is the reason why Zong Shen is attracted.

　 Transfer of coastal OEM enterprises to Chongqing

While local enterprises are sprouting up, foreign OEM garment manufacturers are also rushing to Chongqing.

Reporters learned from the Chongqing inspection and quarantine bureau that recently two foreign garment enterprises have been stationed in Rongchang, OEM production of underwear, trousers and other products. One is Yi Yu (Chongqing) Fashion Co. Ltd. and the other is chao chao company.

"Compared with coastal areas, Chongqing has relatively low labor costs." Jiang Aimin, director of the Promotion Office of the people's livelihood industrial processing and Trade Commission of the Municipal Commission for information and industry, said that due to the cost advantages of seeing the investment in Chongqing, many garment enterprises from the coastal provinces are now consulting with our city to invest in the construction of clothing parks in Hechuan, Jiangjin and other places, including a large number of OEM processing enterprises.

Industry status

23 export companies are all OEM.

Behind the positive actions of enterprises is the flourishing of the OEM industry.

According to the investigation of Chongqing inspection and Quarantine Bureau, in 2011, the total export value of 8 million 150 thousand and 800 garments (sets) and exports was 75 million 33 thousand and 400 US dollars. There are 23 export garment manufacturers in the city, whose export products are all OEM for foreign brands.

As for why Chongqing enterprises are keen on OEM, Cheng Qifei, vice president of Chongqing Chongqing clothing association, said that this is mainly because the OEM does not need to carry out research and development in advance, and the risk is relatively small compared with the sales of self created brands.

　 OEM orders soared in some enterprises

Xu Wei, head of clothing department of textile inspection and Quarantine Bureau of Chongqing inspection and Quarantine Bureau, revealed that the total value of clothing exports increased 56.13% last year, a record high. Reporters learned from some garment exporters that on the basis of last year, their overseas OEM orders are expected to grow further this year.

"There are 80 thousand OEM orders we are producing." Chen Wei, manager of Foreign Trade Department of Chongqing Ye Sen Garments Co., Ltd., said that the new overseas orders this year will increase by more than 1 times over the same period.

Liu Yingzhong, general manager of Chongqing Lang Bo Wan, said: "this year's overseas orders have increased compared with previous years. If necessary, our production line in Yubei can also expand the scale of production."

　 News depth

Why are export brands rarely seen in their own brands?

Chongqing inspection and Quarantine Bureau believes that the overseas OEM orders are hot and bring profits to the enterprises. However, the export of independent brand clothing is zero, which reflects the difficulty of exporting Chongqing's own brand clothing, and the level of independent clothing brand R & D, design and production needs to be improved.

　　 Lesson: OEM is not always seen.

OEM has made many Chongqing enterprises suffer from pain.

From the early 70s of last century to the end of 80s, Chongqing's garment industry mainly depended on exports to win. At that time, many enterprises relied mainly on OEM for foreign famous enterprises, ignoring the development of their own brands. "My impression is that many enterprises were subsidized by the export for the whole year." Chen Wei, manager of Foreign Trade Department of Chongqing Ye Sen Garments Co., Ltd., who has been engaged in foreign trade for many years, recalls.

The good time for "dressing up" for others did not last long. Chen Shangfu, Secretary General of Chongqing apparel (apparel) Industry Association, said that after the financial turmoil in 2008, many OEM enterprises in the south bank and high tech zones were closed due to shrinking orders.

　　 Change: do not give up the development of independent brand

"In fact, after the original lessons, many Chongqing clothing enterprises began to wake up, and now they are walking on" two legs ". Chen Shangfu said that the so-called "two legs" is to develop the independent brand and develop the independent brand. According to the news of the Municipal Commission, 23 manufacturers of clothing exported to Chongqing last year basically have their own brands, but they are mainly sold in the domestic market.

Chen Wei, manager of Foreign Trade Department of Chongqing Ye Sen Garments Co., Ltd., revealed that after the end of the OEM production in August this year, they will produce their own brand clothes for sale in the domestic market. Compared with the OEM, if the independent brand is well known, the added value of the product will be even higher. Generally speaking, the gross profit margin of Chongqing enterprises is around 20% for the OEM of foreign enterprises. If the domestic brands are sold independently, the gross profit will be as high as 50%. Liu Yingzhong, general manager of the Chongqing Lang Bo Wan company, said that the production of OEM products and Chongqing enterprises earned mainly by processing fees and winning by quantity. A down cost garment costs about 200 yuan. The price of a foreign label is as high as 2000 yuan, and profits are mainly earned by others.

　 Source: investment, channels, talent constraints

Why are there few brands in Chongqing's export garments?

"It is not that we do not want to develop our own brand, but our strength is limited." Liu Fang, office director of Chongqing Quartet limited company, admitted. The company has over 20 years history of OEM production and is an old one in the industry. Liu Fang said that the development of independent brands has huge investment in the early stage. Besides developing and designing and publicizing a lot of expenses, it is also very difficult to expand the sales channels.

"In recent years, Chongqing garment enterprises have developed rapidly, but the three major reasons have restricted the export of Chongqing's own brand clothing." Jiang Aimin, director of the Promotion Office of the people's livelihood industry processing and Trade Commission, said that due to the lack of early investment, the brand influence of Chongqing's garments in foreign markets is limited. Secondly, the sales channels of Chongqing enterprises in foreign markets are not smooth. Third, in the connection with international fashion, Chongqing's R & D team is limited.

　　 Expert voice

OEM + licensing

Walking on two legs

Fu Qiang, a professor at the school of economics and business administration, Chongqing University, believes that the strength of Chongqing's clothing enterprises is still improving. It is an inevitable process to produce OEM for others.

Fu Qiang said that OEM has three advantages for Chongqing enterprises. First, we can make use of the brand resources of export brands to build a higher platform for garment export processing enterprises, and improve the starting point for future development. Two, we can promote regional employment. Three, we can use OEM brand technology to train a group of highly skilled workers and business management models. This is the key to the successful transformation of Chongqing's clothing industry in the future. "OEM is good and bad." He said that the brand is the foundation of the development of the garment industry, and the clothing industry in Chongqing cannot always rely on the foot of the OEM. In OEM, Chongqing enterprises must produce according to the requirements of foreign brand enterprises, and it is impossible to learn the core technology. In addition, they will increase the risk of Chongqing enterprises, weaken the market adaptability and technological development capability of enterprises, and the profit margins of production sectors are the thinnest in the process of product development, production and sales. A famous brand clothing is listed on the market, and the Chongqing enterprise that plays the role of producer gains the least profit.

He believes that brand innovation and enterprise transformation are the only way for Chongqing garment export processing enterprises to go. At present, it is wise for Chongqing enterprises to combine "OEM, licensing" and "two legged" walking. To make Chongqing independent brand clothing open the door to foreign markets, the government should increase its support for local enterprises and strive to solve problems such as talent and capital.