Textile and garment industry: exports to the domestic market still on the road

After returning to the Las Vegas shoe show in 1998, Yin Jiqi, chairman of Dongguan Qisheng Shoes Co., Ltd., decided to abandon the OEM and turn to his own brand.

“The foreign market is already very mature and basically monopolized by several big companies. It is very difficult for Chinese companies to enter the market. China has 20% of the global market and huge potential. We are also local companies and have an advantage in understanding domestic consumers. Yin Jiqi said.

The original intention of Hu Yuandi, the chairman of Guangzhou Taima Leather Co., Ltd., to switch to domestic sales is because the foreign trade profits are too thin.

“Now many companies that do export business are complaining. When you come to Huadu Shiling, you know that all the stops on the street are temporary.” Hu Yuandi said that since the financial crisis, companies have entered the “winter” of declines in orders and profits. In the short-term single high, "the order said no, profit is squeezed."

In the transitional period, "satisfied with soil and water"

However, for exporters who are accustomed to the simple process of taking orders, production, and shipping, turning to the domestic market means that many aspects of the market must be overcome.

Xu Congwen, general manager of Jiangmen Xuan-brand sanitary ware, was very cautious: “Exports and domestic sales are two completely different systems. Before the transition, we need to do a good enough pre-research, otherwise the risks are great.” Because of this, Xu Congwen’s steps have taken great care. At present, domestic sales only account for about 10% of the company's business.

“For export to domestic sales, we must first face the difference between domestic and foreign sales. Domestic and foreign consumers are not the same in terms of aesthetics, consumption habits, and the degree of product quality recognition. The concept of the company must also be transformed. Structure and brand operation level adjustments.” Xu Congwen, for example, domestic orders are usually fragmented, and require fast shipping, companies must have good resilience, but also have better market insight, to avoid stock pressure caused by inventory pressure .

Peng Ke, a researcher at the Guangzhou Academy of Social Sciences, said: “In the past, companies that simply made orders were turning to the domestic market to meet the needs of Chinese customers. Adjustments were made in terms of performance, service, etc., based on the needs of consumers in the Mainland. Companies also needed to have The awareness of risk management is not necessarily very smooth at the time of transfer, and it can be used in cooperation with other domestic companies that have done a better job, sharing the low risk, and landing by boat."

"The process of making domestic sales is very difficult, and it is completely different from the foundry. Enterprises should find the right positioning as soon as possible, and they must also be misplaced to conduct differentiated operations." Since 2001 when it opened up the domestic market, Qi Sheng has been Walking on this road for 11 years, but Yin Jiqi believes, "We are still on the road."

Step by step strategy, in fact, the domestic market is also very fierce competition. "Compared with foreign trade, although domestic sales have a relatively high profit, but this piece of cake is not so easy to swallow." Xu Congwen said, "If the company wants to be a brand, the early stage needs to invest a lot of money in market research, product design, advertising marketing In other areas, and the cycle of capital repatriation is long, this is not something that every enterprise can afford. If you do not care, you may lose everything."

"To be a brand is to be tolerant to loneliness." Zeng Tianren, president of Dongguan Yingqi Industrial Co., Ltd., who runs the wool textile business, believes that. Currently, Ying Qi's domestic sales business is in its infancy, accounting for 30% of the total business volume. “In the past, our focus was mainly on the production process. Domestic sales did not become the main business. Now we are gradually aware of the breadth of the domestic market and the low level of consumption, so we open up more fronts.” Zeng Tianren said, “We plan to The country has opened 10 directly-operated stores and operates high-end wool textile brands.” It is reported that in order to open up the domestic market, Ying Qi has invested 30 million, and it is expected to start brand awareness in 3 to 5 years.

Lin Jiang, director of the Department of Finance and Taxation at Lingnan College of Sun Yat-sen University, and a contributing researcher in Dongguan City, believes that the path of export to domestic sales depends on the type of company. “Some companies are relatively large and can allocate some resources for domestic sales, but in the short term they cannot. To a large extent, the existing structure cannot be considered as a very important growth point. When domestic sales are done in a certain scale, the structure is adjusted or exports are compressed, and a 'step-by-step strategy' is implemented; If enterprises have a certain ability, they can transfer part of the production line to strategic emerging industries that have no relationship with OEMs, and gradually reduce their reliance on OEMs."

Lin Jiang pointed out that for smaller companies, it is not easy to make judgments. Because these companies have limited financial resources and strength, they can only choose between foundry and end-of-manufacturing. If they do not, they will “fight.” “Under the current economic situation, this part of the lagging enterprises will surely have to die. This is also in line with the logic of reshuffling the cards. The government should give appropriate guidance and communication to introduce quality experts for them. University resources are more important than giving them a sum of money."