Summary: China's textile and garment exports continued to decline in the face of competition in Vietnam, Cambodia and other countries is no longer cheap labor advantage, the domestic economy entered a new normal. Industry competition, a large number of factory closures, some of the best workers are unemployed, order drain.

2016, the central economic work conference, to do a good job production, de-stocking, deleveraging, lower costs, make short board five tasks. Meeting the "capacity to" 2016 as the first task of the five major structural reforms, and clear the "more mergers and acquisitions, bankruptcy and liquidation less" ideas. Garment manufacturing industry in 2016 "Thirteen Five" the first year of the plan, how to take a good first step in its industry innovation played in this fierce market competition in a crucial role as.

Chinese apparel industry significant competitive pressure at home and abroad
Chinese textile and garment exports continued to decline in the face of competition in Vietnam, Cambodia and other countries is no longer cheap labor advantage, the domestic economy entered a new normal. Industry competition, a large number of factory closures, some of the best workers are unemployed, order drain. Garment industry is labor-intensive industries, China's aging population problem is serious, the labor force is declining, resulting in labor costs, resource price pressures significantly higher than most garment producing countries, companies need to bear the lack of demand and rising costs of the dual pressures.
According to Chinese customs statistics data, 2015 annual Chinese textile and clothing (including textile yarn, fabrics and related products and apparel and clothing accessories) exports totaled $ 283.85 billion, compared with last year fell by about 4.9%. TPP agreement on the implementation of China's textile and garment exports also have some adverse effects.
In response to upward pressure on costs as well as tax policy differences between importing, producing more companies choose to set up overseas production base, the development of the domestic apparel industry steering meticulous management and technological innovation-based, industry significantly increased competitive pressures, the apparel industry needs to transition.
Apparel manufacturing is an important livelihood industry, modern science and technology and cultural integration of fashion industry. In the face of contemporary pluralism challenge, whether it is production-oriented enterprises or circulation enterprises, Chinese garment industry have faced rising costs, increased competition and a shortage of funds and other issues. "Twelve Five" period, the garment industry has experienced a difficult period intricate. In this initial five years, under the "Eleventh Five-Year" to promote the inertia, the industry still maintained a high speed development. But from the beginning of 2012, weak domestic market consumption growth, many apparel brands experiencing winter market, lead to closed shop tide high inventory, sales are falling sharply. During 2015, the most serious collapse of the textile industry, the massive unemployed population downstream industry chain scale, this year there will be a large-scale closure of thousands of factories continued. Some experts said that even if the domestic garment enterprises in the next decade does not manufacture does not produce enough existing inventory to meet the needs of the people.
Over the years, the apparel industry chaos. Clothing is non-standard products, the industry failed to establish a unified management standards. Price war, do not sign a production contract, paragraph statement difficult boss on foot with money and other swindling delivery is serious, the industry lack of order, Gresham's Law into a vicious cycle.
Traditional big factories long production cycle, factory owners in order to guarantee sufficient orders to maintain worker stability, it will require more than three months or even six months in advance orders, and one thousand from the set, for small orders can refuse the refuse. In labor, time and materials cost is quite the case, the average small orders to a single piece of clothing cost is slightly higher, so the overall profit lower than large orders. Combined with small single source of instability, in terms of a comprehensive, most factories are willing to take small orders.
For brands, premature orders can not accurately grasp the popular seasonal sales became bad stock, resulting in severe cash flow difficulties. Large factories do not take a small single, small factory shipments unstable. Should the plant can be low-volume, rapid production of goods, the seller can achieve on-demand orders, fast turn one to create explosion models, reduce inventory pressure or even zero inventory.
Domestic production Situation and Trend
We can put domestic Production capacity by size into four categories:
The first: to stand on top of Shenzhou International, represented by large factories.
Such large factories serving only top brand, capacity is also Adidas, Nike occupy these international brands. Domestic demographic dividend gradually weakened, while the textile industry, intense competition, the Shenzhou International was surging, and made a beautiful "smile curve": market value of about HK $ 52.742 billion, as of December 31, 2015, annual sales approximately HK $ 14,905,918,184, an increase of 13.5% over FY2014. Fiscal 2015 gross margin was 30.5%, up 1.5 percentage points over the same period last year. Gross profit amount as of December 31, 2015, amounted to HK $ 4,539,134,425, an increase of 19.3% over 2014. Net profit as of December 31, 2015, amounted to HK $ 2,777,131,116, net profit margin of 18.79%, an increase of about 13.9% in 2014.
The second category: large factories, the number of the scale of more than 5,000 people.
Such plants from 2013 to 2015 after another collapse; textile giant Zhuangji Group from bankruptcy value of 3.0 Yi to May 2015; August 2015, East China Textile predators Baolijia Group declared bankruptcy, debt boss on foot; over the same period, once fame centuries old textile factory in Jinan, a cotton factory also declared bankrupt; worked for China top 500 private enterprises, the total assets of over 20 million Zhejiang red sword Group Limited officially discontinued, more than 1,000 people took to the streets to beg They were owed three months' salary. A large number of clothing boss wage arrears running, Southeast Asia and other large number of orders flowing low labor cost countries. Uniqlo, Muji, Aoyama Shoji, Li & Fung, Tokyo STYLE, Honeys are accelerating the transfer order to the Southeast.
The third category: 500-5000 persons medium size plant.
In April 2015, with more than 2,000 employees, Li Ning, special steps core supplier Ya Lun Clothing funding strand breaks due to adverse economic expansion, the boss disappeared. In May 2015, has the national top 500 private enterprises, the total assets of 10 billion Shaoxing dyeing Gangster Five foreign printing bankruptcy, employs more than 2,000 people. Once the number of employees more than 10,000 people garment factory owner in Dongguan Acer thick foot, employees took to the streets to beg for two months wages and economic compensation, the local government sent police to maintain order in 1500; and in the textile industry gathered in Shaoxing, Shantou, Changle, Dongguan etc., the bankruptcy of small and medium textile and garment enterprises are just countless.
After the introduction of the new labor law in 2008, China's labor costs in just five years, more than doubled. Since the textile and garment industry is a typical labor-intensive enterprises, labor costs to business has brought unimaginable pressure. Chinese spinning industry and obsolete equipment, high operating costs, low-end market share of less than 50 has been eroded in Southeast Asia, India, Bangladesh and other countries. The high-end market of more than 100 were Japan, Germany, Italy grip. Under after the attack, the textile and garment industry has long been defeated.
The fourth category: small factories, workshops, and other unemployed workers.
Due to the above factory closures, resulting in expanding the scope of this population. Idle unemployed workers re-employment stage into the switch, some orders have excellent technical ability of workers, since the composition of the workshop own orders. Such workshops, lack of effective management systems and control fabric sourcing, quality is difficult to grasp. Most small factory less than 30 people, shabby condition, and management of the entire business is run by a boss who once workers sick leave situation, it will delay the overall schedule; no human and financial investment, there is no advanced technology and equipment, process rough, like color fastness testing, pilling test the basic lack of fine control. All the production process is completed by hand, in the event of a novice, quality is difficult to guarantee. So this type of workshop capacity is extremely unstable, survival has become a problem.
This shows that the polarization garment industry Serious, strong stronger and the weak weaker industrial structure has become more evident. Unlisted large-scale factory closures, leading enterprises such orders more abundant; but on the other hand, a large number of small factories, workshops, textile workers idle existence, to be re-organized, large-scale upgrade and standardization of production, which for the community development platform provided the conditions.
"Suppliers - Supply Chain - Supply Network" evolution
Most of the past factories closed and isolated, they are all doing, just to meet the supply and demand relationship between enterprises, supply and demand here to stay only in the relationship between supply and demand for physical product, and does not sound monotonous, rigid and inflexible. Small workshop production by the development of small-scale peasant formation, and gradually developed into large factories, which tends to the traditional mode of thinking, in the information enclosed environment, always engaged in repetitive jobs. But this time the domestic production and demand are more balanced, moderate competition between plants, not yet in need of reform and innovation opportunities.
Currently, globalization increasingly fierce market competition, enterprises are faced with rapidly changing market demands and shorten delivery time, improve quality, reduce costs and improve service pressure. The original of each distributed enterprises gradually realized that to survive in the competitive market, and other companies have complementary strengths to achieve the ability to establish a relationship of alliance, and in a cross-enterprise integration under management mode, all enterprises can unify coordinated so as to better adapt to environmental change, and in this form, material, information, liquidity occurred in the target company as the center of a network of supply and demand, thereby forming a supply chain prototype. Supply and demand at this time has been more than just product supply and demand relationship between business entities, and also includes supply and demand supply and demand relations services, companies sometimes internal product development and production between. On garment industry, the entire production process, such as procurement, cutting, sewing, logistics and other sectors by segment to form a partnership in all aspects of the apparel supply chain, enhance productivity, although to some extent, but there will be limitations, for example, unable to break the regional cooperation is limited to relatives, friends or neighbors, new partners for high selection and running costs, time, cost and integrity and other issues to be resolved.
In the foreseeable future, the relationship between demand and supply channels of communication between enterprises will be self-forming distributor network. Through Internet technology, connectivity, and capacity of the national precipitation data: factory distribution, good category, level of technology and so can be digitized, and procedures. With these data, real-time control status of the country of the factory, precise matching orders. Internet Product organize regional capacity and efficient coordination, a higher increase production efficiency and reduce the cost of waste. Take advantage of the Internet to break the constraints of time and space, so convenient and efficient supply of clothing, gradually reduce losses, which is the supply network concept.
It highlights the value of a flexible supply network
The core competitiveness of Chinese garment enterprises is precisely the most optimal allocation of resources, optimize the integration of industrial chain. Because of clothing materials, textile technology, production bases, personnel structure, financial operations, clothing and other asymmetric distribution of information, resources are not optimized configuration, the priority is to optimize the industrial chain.
Changing industry status quo is not an overnight thing, from the grassroots capacity needs reform, which was broken, restructuring, upgrading of the operating platform. For example, the domestic garment Sinbad flexible supply chain platform, the core model is the organizational capacity to network layout, providing a flexible production services through the use of idle capacity and optimizing production processes can be achieved by small orders to one hundred large first million, The average production cycle of 7.4 days.
Through the upgrading of traditional garment factories, the introduction of the concept of social production, the elimination of the human cost of corporate loans and pressure, but also improve the return on investment and manpower; and in the production to meet the changing needs of the apparel market, so stores you can maximize the shortest possible time to Chen and new, to create a group of domestic "ZARA" enterprise.
Recently, in order to promote the exchange of information between suppliers and brands, and promote the upstream and downstream enterprises to explore new modes of cooperation, the establishment of industrial chain collaborative innovation system of rapid response, China Garment Association decided to build a "Chinese garment industry resource platform." In order to bring together industry, manufacturers of high-quality resources, China National Garment Association, China Garment manufacturers now carry information collection.