How can traditional garment enterprises seek new development opportunities by controlling costs and

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



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



Henan Xinxiang Xinke (XINKE) Protection Technology Co., Ltd. is a foreign trade enterprise which focuses on the production and sale of labor insurance clothing. It has maintained the traditional B2B business for more than 20 years. Now it also begins to explore the export e-commerce channels. Perhaps many traditional enterprises can draw lessons from its transformation and upgrading process.



With rising costs and intensified overseas competition, the future of traditional garment industry is uncertain < br />.


The rising export cost is a common topic for export enterprises, especially in the traditional garment industry. Compared with traditional clothing, because the fabric of labor insurance clothing pays more attention to functionality and has higher technical requirements, all production lines and fabrics need to be certified, so the cost is difficult to control.



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



Cost issues need to be tackled urgently, while some overseas competitive forces with relatively low manufacturing costs are growing slowly. Lu Zhaowei told Hugo that even some Indian and Pakistani manufacturers have already been & ldquo; blatantly & rdquo; competing with Hugo in terms of customers and orders, and they do have more competitive advantages in terms of price, delivery date and national policy.



In addition, Lu Zhaowei revealed that due to the external environment such as the Sino-US trade war and Britain's separation from Europe, many American and British customers pressed orders ahead in the second half of 2018. The order volume in 2018 increased by nearly 20% compared with previous years, but the situation of the overseas market in the new year is not good enough to judge, which is unavoidable to some worries.



How can the traditional garment industry break the deadlock?



From the above part, we can see that the traditional garment industry is facing several difficult problems: rising costs, intensified overseas competition and unstable policy environment. In further talks with Lu Zhaowei, Hugo learned about the course of the traditional industry: ldquo; struggle & rdquo; and & ldquo; transformation & rdquo; and so on.



First of all, facing the rising fabric and labor costs in the garment industry, many domestic factories began to transfer their production lines to countries with lower labor costs such as Southeast Asia. It is not easy for XINKE to take relatively conservative measures for the time being: XINKE will store some raw materials and stocks in order to reduce delivery time, control costs, and gradually accumulate its loyal customers.



Secondly, in the face of intensified competition from overseas counterparts, XINKE tries to meet the requirements of overseas market in product certification besides controlling the cost as far as possible. According to him, each overseas country has different testing standards for labor protective clothing, which requires enterprises to apply for certificates from several countries at the same time, such as LA certification in China, CE certification in Europe, UL certification in the United States and so on. XINKE spends nearly 2 million yuan on these certificates in an average year.



On the other hand, efforts have also been made in product design, quality and process to form differential competition with low-end products, which greatly improves the trust of customers and accelerates the signing of orders. For example, when talking about product design, Lu Zhaowei mentioned a very important concept: ldquo; tooling fashion & rdquo; that is, the design version will be more fashionable, labor insurance clothing in addition to protection, will also increase some more rational design: for example, place where mobile phones, tools, or use & ldquo; splicing & rdquo; technology, key parts are more rigid. Tight materials, the rest can be used knitting and other softer materials, so that workers wear more comfortable.



Finally, we should deal with the policy instability in the European and American markets. In the past, XINKE mainly aimed at the European and American markets, but now orders in South America, Africa and the Middle East have also increased. At the same time, in order to diversify the risk of major markets, XINKE has been trying to open up emerging markets such as Asia, Africa and Latin America, and accordingly produce some labor insurance products that meet the local market demand.



At the same time, XINKE also began to increase the development of e-commerce channels. However, Lu Zhaowei also pointed out that although there is a great demand for this functional clothing in overseas markets, such clothing generally takes the form of “ quantity & rdquo; and because of the high demand for human body protection for functional clothing, customers mostly prefer to talk about cooperation offline and go to factories for field visits.

Key words: cost control in traditional garment enterprises