How Can Traditional Garment Enterprises Seek New Development Opportunities By Controlling Costs And Expanding Channels?

How can a traditional clothing category keep pace with the trend and open up market space?


How can a traditional enterprise seek new development opportunities by controlling costs and expanding channels?


Henan Xinxiang Xinke Protection Technology Co., Ltd. is a foreign trade enterprise focusing on the production and sales of labor protection clothing. It has maintained its traditional B2B business for more than 20 years, and now it has begun to explore export e-commerce channels. Perhaps many traditional enterprises can learn something from their transformation and upgrading process.


The future of traditional clothing industry is uncertain due to rising costs and intensified overseas competition


The rise of export costs has been a commonplace problem for export enterprises, especially in the traditional clothing industry. Compared with general traditional clothing, the fabric of labor protection clothing is more functional and has higher technical requirements. All production lines and fabrics need to be certified, so it is difficult to control the cost.


On the other hand, the labor cost is also rising. According to Lu Zhaowei, the sales manager of XINKE, Henan had a certain advantage over southern cities in terms of labor cost, but this advantage has also been shrinking in recent years. For example, the average worker in Xinxiang now needs at least 3000 yuan per month.


The cost problem needs to be tackled urgently. At the same time, some overseas competitive forces with relatively low manufacturing costs are also growing slowly. Lu Zhaowei told Hugo. com that even some Indian and Pakistani manufacturers are "brazenly" competing with them for customers and orders, and they really have more competitive advantages in terms of price, delivery time and national policies.


In addition, Lu Zhaowei revealed that due to the impact of the external environment such as the Sino US trade war and the Brexit, many American and British customers pressed their orders ahead of time in the second half of 2018, and the order volume in 2018 increased by nearly 20% compared with previous years. However, it is still difficult to judge the situation of the overseas market in the new year, which can not help but cause some concern.


How can the traditional garment industry break the "deadlock" under domestic and foreign troubles?


From the above part, we can see several thorny problems faced by the traditional clothing industry, including rising costs, intensified overseas competition and an unstable policy environment. In the further conversation with Lu Zhaowei, Hugo learned about the "struggle" and "transformation" of the traditional industry.


First of all, facing the rising cost of fabrics and labor in the clothing industry, many domestic factories began to transfer production lines to countries with lower labor costs such as Southeast Asia. "Professional transfer" is not easy. For the time being, XINKE has taken relatively conservative measures: XINKE will store some raw materials and goods to reduce delivery time, control costs, and gradually accumulate its loyal customers.


Secondly, in the face of intensified competition from overseas peers, in addition to trying to control costs, XINKE also tried to meet the requirements of overseas markets in product certification. According to him, each overseas country has different inspection standards for labor protection clothing, which requires enterprises to apply for certification certificates from multiple countries at the same time, such as Chinese LA certification, European CE certification, American UL certification, and so on. On average, XINKE will spend nearly 2 million yuan on these certificates a year.


On the other hand, we also made great efforts in product design, quality and process to form differentiated competition with low-end products, which greatly improved the customer's trust and accelerated the signing of orders. For example, when talking about paying attention to product design, Lu Zhaowei mentioned a very important concept of "fashionable tooling", that is, the design pattern will be more fashionable. In addition to the protective role of labor protection clothing, it will also add some more reasonable designs: for example, where mobile phones and tools are placed, or where "splicing" technology is used, and the key parts will be made of relatively rigid materials, Other soft materials such as knitting can be used to make workers more comfortable.


Finally, it is to deal with the policy instability in the European and American markets. In the past, XINKE was mainly targeted at the European and American markets. Now, orders in South America, Africa and the Middle East have also increased. At the same time, in order to diversify the risks of major markets, XINKE has tried to expand into emerging markets such as Asia, Africa and Latin America, and correspondingly produce some labor protection products that meet the needs of local markets.


At the same time, XINKE also began to increase the development of e-commerce channels. However, Lu Zhaowei also pointed out that although the overseas market has a large demand for this functional clothing, this kind of clothing is generally in the form of "quantity", and because functional clothing has high requirements for human protection, most customers prefer offline cooperation and field visits to factories.