At a time of rising costs and increasingly fierce competition in the textile industry, "going out" has become one of the choices of many Chinese garment export enterprises. However, not all enterprises need or have the ability to invest tens of millions of dollars abroad to build factories. Sometimes a small step is also crucial to success.
Exploring the International Market through the World Expo
In two months, the 2015 Milan World Expo will open to visitors. At that time, Shanghai Textile Group will be landing at the China Enterprise Pavilion of the Milan World Expo. The group said it would take advantage of this world-class stage to show the world the new image of Shanghai Textile Group as "science and technology and fashion", speed up its internationalization and lead China's fashion industry to "go out".
It is reported that Shanghai Textile Group will hold the theme event of "Shanghai Welcomes Italian Fashion" at the Milan World Expo, inviting and introducing a group of Italian designers into the fashion park developed by the Group, and jointly creating clothing and apparel for the international market. At the same time, we should promote the cooperation between national fine textile products, fashion products and international famous brands, and enhance our ability to operate fashion brands while becoming agents of international famous fashion brands. In addition, the group will also hold a forum on internationalization and cross-border mergers and acquisitions of Chinese enterprises with the background of "one belt and one road", and the Shanghai Textile Development Strategy Advisory Forum with the theme of "fashion industry development". It will provide favorable conditions for enterprises to better seize the opportunity of "one belt and one road", implement the "going global" strategy, integrate global resources and conduct cross-border mergers and acquisitions.
In fact, this trip to Milan is only a small step towards the internationalization of Shanghai Textile Group. At present, the group has acquired a 50% stake in Metropol, a Danish fashion company, cooperated with the Italian Navigare underwear brand, and embarked on a $10 billion "New Textile Industrial Park" project in Sudan, Africa.
According to Tong Jisheng, chairman of the group, "Shanghai Textile Group has identified two'1 + 5'development strategies. That is to say, we should focus on fashion industry and develop five major industries: brand and fashion, science and technology and manufacturing, trade and internationalization, fashion real estate and property, fashion capital and finance. On the basis of internationalization, five "going out" bases have been established, including overseas raw material base, overseas manufacturing base, overseas sales base, innovation design integration base and overseas supply and distribution center.
Tong Jisheng also said that the overseas development strategy will promote the transformation and upgrading of Shanghai Textile Group, accelerate the internationalization level of Shanghai Textile Group industry and technological innovation and development. His bigger dream is to spread the culture, concept and mode of Shanghai fashion industry to the whole world. Reasonable Distribution and Maximum Benefit
Similar to Shanghai Textile Group, Xinjiang Mingzhong Garment Manufacturing Co., Ltd. also adopted the strategy of "taking small with big" on its "going out" journey. Duan Weiming, general manager of the company, said: "With the sound political and economic development of Central Asian countries, their demand for foreign investment and imports is also changing. It has developed from a single import to a business model combining import and investment. Therefore, it is very difficult for Chinese textile and garment enterprises to export ready-made clothes to the country alone. This is also an important factor in our eagerness to establish a garment production base in the country. At present, we put 70% of the production process in our country and 30% in Kyrgyzstan, where the cost is relatively low. Although we do not like other "go out" enterprises to build factories, but this is the most reasonable layout for us, only in this way, the company will get the most substantial profits.
Duan Weiming continued: "Kyrgyzstan's industrial chain is not perfect, but the biggest advantage here is the low wages of workers. A middle-level manager's monthly salary in China is about 4000-5000 yuan, while in Kyrgyzstan it is about 1200-1500 yuan, and the average worker's salary is about 1000 yuan. In addition, the market environment of Central Asian countries is very good, with great market potential and demand. Most of the company's products thus enter Central Asia, Russia and Eastern Europe, products in the Pan-Russian region can also enjoy zero tariffs. In addition, the local land and tax are also very preferential.
According to Duan Weiming, this "70% domestic + 30% foreign" business model made the company's sales reach 106 million yuan last year, doubling compared with 2013.
Everything is a combination of risk and opportunity, and so is going out. Due to insufficient understanding of local policies and errors in investment approval procedures and domestic policy docking, Xinjiang Mingzhong Garment Co., Ltd. spent a long time communicating, which caused great inconvenience to other layout links.
"Firstly, enterprises choose to go overseas to develop. They can meet the needs of the market more, and their production costs can also be controlled. But the specific form of "going out" and how to carry out the industrial layout are individualized choices of enterprises. Not every enterprise needs to invest overseas to build factories. The form of "going out" is varied. It is necessary to understand the policies and regulations of the admitting countries and the degree of industrial development before that. Duan Weiming said.