According to statistics from various trading companies in Japan, the sales volume of the textile business in fiscal year 2013 has a significant tendency to increase. The biggest positive factor is the depreciation of the yen, but a tough battle for profits is inevitable. The main garment OEM business has strengthened its transfer to the “China + 1” production and processing location, the development of unique materials, and strengthened design and production. However, the income is still unable to escape the impact of foreign exchange rates. Various trading companies believe that the yen is currently in a depreciation stage, and a relatively stable exchange rate is also a favorable factor. What is worrying is the duration of the sluggish store sales in June this year. Against this background, in order to increase profits, in addition to various cost reduction measures such as strengthening planning proposal capabilities, companies are also making changes in building new business models.
A performance questionnaire survey conducted by Senken News Agency showed that the total sales of the 27 companies surveyed in fiscal 2013 were 3.4429 billion yen, a year-on-year increase of 7.3%. Compared with the 2012 fiscal year (total of 28 companies), which had an increase of only 0.1%, this is a significant increase. Only 6 companies experienced a decrease in revenue, which was also significantly lower than the 14 companies in fiscal 2012. It is estimated that companies with more business related to Fast Retailing will see more revenue growth from the increase in the number of orders, while the revenue growth of other companies will mainly benefit from the depreciation of the yen. Among the companies that have not been announced in the textile business sales rankings, Mitsui & Co.’s textile-related business sales reached 200 billion yen, and Sojitz’s textile business department had sales of approximately 100 billion yen.
New market background throws up transformation issues
In recent years, the textile business of Japanese trading companies has been at a stage where it is easier to realize its potential with the shift to the “China + 1” production and processing location. Due to the lack of production experience and capital in Southeast Asian countries by companies specializing in OEM business and planning companies, trading companies have gradually emerged. In order to cut costs, clothing companies and manufacturing retailers are also very willing to directly participate in trade. Therefore, many trading companies believe that how to deal with the willingness of service companies to trade directly is more important than competition among peers. To this end, various trading companies are also racking their brains to establish new business models.
In terms of OEM business, major trading companies have established sewing networks in Southeast Asian countries, ensuring the supply of materials and promoting the improvement of planning capabilities. In addition to expanding planning staff, cooperation with planning companies is also prominent. Marubeni Fashion Planning Company cooperated with the design and production company 4PK’s in November last year. This move of sharing an office is very representative.
Original brand manufacturing model attracts attention
In addition to the shift from OEM business to production and design, various trading companies are also gradually paying more attention to original brand manufacturing. The original brand “oblekt” launched by Toyoshima Company in August last year mainly targets customers in the OEM business. It is a business model that not only provides space layout solutions for products, shelves, displays, etc., but also is responsible for brand promotion. . Product development is handled by a dedicated team of designers. Toyoshima Company positions its original brand manufacturing business as “the integration of design, production and sales of its own brands, and proposes a business model including brand operation and sales price plans to retail stores.” Whether this business model that goes further than production and design can be deeply promoted in the market deserves attention.
On the other hand, the direct business relationships between overseas local legal entities of trading companies and Japan are also further deepening. SUMITEX INTERNATIONAL and Chori took the lead in establishing an operation system in which branches in China and Vietnam directly negotiate with Japanese customers and provide products. This method reduces business costs and, to a certain extent, can meet customers’ needs for direct trade. It has certain advantages and may become a trend.
Provide comprehensive services that advance downstream
At present, the traditional clothing OEM business is undergoing various transformation trends, and Itochu Corporation’s business model is more comprehensive. The main policy of this model is to promote the downstream strategy, strengthen the operations of retail-related business companies and overseas downstream business, and also add additional businesses such as material production, OEM business and brand operation. A representative case is the global sales rights business of Lesportsac held by Itochu Corporation, which is responsible for all stages of the brand from materials to productization and market planning. As a trading company’s textile business, its results are remarkable.
Managers of various trading companies pointed out that it is difficult to increase profit margins through pure OEM business. Although some trading companies still believe that if the foreign exchange rate is stable and no major incidents occur, retail prices and wholesale prices will rise. However, with the sharp rise in costs in the “China + 1” region, it is obvious that profits can no longer be achieved by moving production locations. sharp rise. However, a stage where substantial growth cannot be expected from the OEM business has also become a good time for major trading companies to build new business models.
