Multiple Negative Factors Intertwined to Force Transformation of Guangdong Garment Industry

At the 2011 China Liuhua International Fashion Festival and Guangdong Fashion Week, a number of Guangdong apparel industry sources said that due to the intertwining of multiple unfavorable factors such as the recent increase in raw material prices, rising labor costs, and persistent fluctuations in the exchange rate, Guangdong apparel The enterprise is once again facing a new test of survival, but it has also directly forced it to accelerate the pace of transformation and upgrading.

In the first six months of this year, garment enterprises above designated size in Guangdong Province completed a total of 2.912 billion garments, accounting for 24.83% of the national total, and continued to occupy the position of the largest garment producing province in the country, but the growth rate slowed down significantly, and the year-on-year increase decreased. 8.36 percentage points. On the other hand, recent surveys have pointed out that homogenization competition has caused the current Guangdong garment industry to fall into the “warm boiled frog” plight.

The transformation of the Pearl River Delta garment industry, known for its labor intensiveness, is clearly imminent. Even the famous brands such as Jeanswest International (Hong Kong) Co., Ltd., headquartered in Huizhou, Guangdong, are exploring new ways. The chairman of the company, Yang Xun, said that Jean-Wissie’s way out of the woods is to increase production efficiency first, and secondly, to increase sales and offset the shrinking profits caused by inflation. At the same time, innovating in product sales channels, "We have reached an important partnership with Taobao."

Liu Yueping, chairman of the Guangdong Clothing and Apparel Industry Association, said in an interview with a China News Agency reporter that facing the test of survival, the key to Guangdong’s garment companies is to follow the law of industrial development and “improve the quality of products, cultivate more clothing brands, increase Open up the domestic market." He said that Guangdong Fashion Week, which has been held for 10 consecutive years, will continue to build a platform for expanding the brand influence of apparel companies, especially small and medium-sized garment enterprises.

As early as a few years ago, Guangdong launched the "Cage for Birds" policy and implemented the "Plan Pearl River Delta Reform and Development Plan", which intends to promote the traditional industries of the Pearl River Delta, including the clothing industry, to high-end. Liu Yueping pointed out that the government encourages the garment industry to implement "double transfer" and has introduced a supporting preferential policy. In the early years, some apparel companies in the Pearl River Delta were “understanding and inadequate”, but now they are “fully aware” and many companies are looking for opportunities to transfer and upgrade their industries.

Liu Yueping said that the garment industry in Guangdong should take advantage of the modern service industry, increase the application of information technology, e-commerce, etc. in the apparel industry, and develop high-value-added, high-growth modern urban clothing industry. Deeply improving the competitiveness of the industry and sustainable development is the efficient engine for the optimization, upgrading and transformation of the garment industry in Guangdong.

According to Feng Dehu, vice president of the China Garment Association, the garment industry in Guangdong and even the whole country is facing new challenges due to the challenges of domestic environmental resources, the impact of the international market, rising costs, and the rise of the surrounding clothing industry. Feng Dehu believes that the innovation, value-based, market-oriented, and scientific and cultural talents are the most important factors in the national garment industry's transformation and upgrading during the “12th Five-Year Plan” period.

It is worth noting that a recent research report released by the Guangdong Clothing and Apparel Industry Association pointed out that the Guangdong garment industry is currently in a critical period of transformation and upgrading. The survival of the fittest is the inevitable process of industrial transformation and upgrading. Powerful companies in the process of development through technological transformation, management upgrades and other means to achieve increased production efficiency and improve profitability. The weak competitiveness of small-sized enterprises is very weak. It is very easy for the capital chain to break and the company to fail due to the inability to deal with business pressure. In the second half of the year, this phenomenon will inevitably continue to appear everywhere.