“Pinghu has one of hundreds of clothes in the world” is the outside world’s impression of Pinghu. In 2006, the garment industry, one of the three traditional advantages of Pinghu, Zhejiang Province, achieved a total output value of 10.745 billion yuan, contributing 23.7% of local revenue. At the same time, Pinghu’s clothing output accounts for 10% of Zhejiang Province’s clothing output and 2% of the country’s clothing export output.
As a warm weapon in winter, down jackets are very popular. Even if the price of down jackets generally rises in the winter of 2021, it is still difficult to hide the love of consumers for it. Many mid-to-high-end products are even out of stock.
As the saying goes, every need is a business opportunity. In Pinghu, 30 miles away from Jiaxing, the business experience of down jackets is hidden.
In this small town with a population of only 700,000, it contributes more than 80% of China’s down jackets. Here, 300 million sets of clothing are produced every year, enough to circle the earth 10 times.
It is hard to imagine that this small town in Jiaxing has become a hidden winner of the winter economy with down jackets, with annual sales of 30 billion yuan, and has entered the Chinese market Top 100 list.
Whether it is a miracle caused by strong force or by the force of good wind, we have to start from the beginning.
01
Focus on down jackets
As early as the 1980s, relying on the geographical advantage of being adjacent to Shanghai and Hangzhou, Pinghu had its first batch of garment processing factories.
In the early days, they mainly cooperated with Shanghai and other surrounding large enterprises in “joint ventures” to undertake the processing of supplied materials and participate in individual production in the quota market of the planned economy at that time. go.
With the help of funds and technology from large enterprises, Pinghu’s clothing production has rapidly expanded, and its total industrial output value has ranked first in Jiaxing City for 27 consecutive years.
Especially after the opening of the foreign trade market, Pinghu’s potential has been gradually tapped by foreign companies.
Here, there are many people who see more than 100 world-renowned brands such as Nike, Rolls-Face, Valencia, Unicoro, and Armani. A production and processing base, its products are exported to 76 countries and regions including Japan, Europe and the United States.
Twenty years have passed, and Pinghu has become the largest foreign trade export clothing production and manufacturing base in the country. According to statistics, at its peak, there were more than 1,200 garment companies in Pinghu, employing 180,000 people, producing 300 million pieces of clothing throughout the year, with a total output value of more than 13 billion yuan.
Although more than 95% is “OEM” production, it has also created considerable profits for Pinghu. In 2006, Pinghu’s three traditional advantages, the garment industry, achieved a total output value of 10.745 billion yuan, contributing 23.7% of local revenue. At the same time, Pinghu’s clothing output accounts for 10% of Zhejiang Province’s clothing output and 2% of the country’s clothing export output.
“Pinghu has one of hundreds of clothes in the world” is the outside world’s impression of Pinghu.
Until the 2008 financial crisis, the town’s nearly 30 years of tranquility were broken. At that time, affected by the sluggish international export market, increasing labor costs, and rising raw material prices, Pinghu’s garment industry, which had relied on exports and processing and manufacturing for 30 years, was facing a crisis.
According to statistics, in the first nine months of 2008, half of Pinghu’s designated clothing companies suffered losses, and the industry’s sales profit margin dropped from 7.7% in 2001 to 1.5%. The original profitability has dropped significantly, and Pinghu clothing industry has to seek transformation.
At that time, when negotiating cooperation with foreign businessmen, a large number of Pinghu garment companies worked alone, without advantages and lack of say. In order to have the right to speak, Pinghu urgently needs an issuance center for major international clothing brands to improve the effectiveness of trade negotiations and increase its own interests.
As a result, Pinghu Garment City was completed in 2011. Unfortunately, in the early stages of the development of the clothing city, whether it was initially selling department stores or later trying original products, the performance of the clothing city has always been mediocre.
It wasn’t until the winter of 2014, when the weather in the north cooled down extremely and the sales of down jackets at the clothing city stalls, that Pinghu noticed the down jackets that accounted for only 3% at the time. Down jacket market, and repositioned the clothing city as “China Down City” in one fell swoop.
02
Transformation from OEM to ODM
To delve into the present situation of Down City, it is inseparable from the transformation from OEM to ODM.
In the 1990s, market policies were liberalized, and a number of companies relying on OEMs were able to develop rapidly. However, under the financial crisis, the OEM model’s weak market competitiveness, unstable orders, and poor risk prevention capabilities have been infinitely magnified. At the same time, labor costs have risen, and the profit margins of OEM processing have been greatly squeezed. A large number of OEM companies are facing a survival crisis. .
To this end, industrial groups such as Pinghu Clothing and Haining Leather are seeking ways to transform. With the help of the original industrial chain and industrial foundation, they began to try to jump from OEM “OEM” to ODM “brand creation”.
Under the OEM model, there are many garment companies in Pinghu, labor shortage problems, and the personnel structure is scattered and chaotic. To this end, the local government encourages large clothing companies to acquire and merge a large number of small and medium-sized enterprises in order to further integrate the resources of Pinghu’s clothing industry and effectively promote the transformation of the industrial cluster.
In addition, faced with the current situation of Pinghu’s over-reliance on foreign raw materials and sales, the local government has attracted investment to attract overseas high-end fabrics and built a local clothing fabric market to establish Complete supply chain system. At the same time, we encourage exports to be sold domestically and walk on two legs.
This has allowed Pinghu clothing’s domestic sales to gradually exceed exports, getting rid of theBusiness.
As one of the top 100 high-quality suppliers of Uniqlo in the world, Huacheng Group, the largest local clothing company in Pinghu, may be a pioneer in e-commerce and has deployed e-commerce very early. channels, cooperate with Douyin base, and make Douyin yourself.
E-commerce is different from OEM wholesale in the past. The former belongs to the “one piece, single shipment” model and may face the risk of returns at any time, while the latter is a batch business. Production and sales, the risk of returns is small.
But even if the difference is huge, it does not stop Pinghu people from being determined to move towards e-commerce.
With the help of the e-commerce model, a large number of winter down jackets can be promoted off-season in summer, broadening sales channels and reducing inventory pressure.
Take Zhejiang Crozi Fashion Clothing Co., Ltd. as an example. In the summer, it sold down jackets on Douyin live broadcast, and about 2,000 people still watched and bought it. Even in summer, sales of down jackets are still considerable.
To this end, in addition to establishing the Pinghu International E-commerce Industrial Park, the local area is also gradually improving its logistics system.
At present, there are more than 100 companies settled in Pinghu International E-commerce Industrial Park alone, creating more than 3,000 jobs and entrepreneurship.
According to statistics, from January to October last year, down jackets shipped from Pinghu accounted for 30% of the down jacket transaction volume on the national Douyin platform, and the base’s online sales The transaction volume tripled from the previous year.
Pinghu, which has seized the dividends of e-commerce, may be able to create another miracle.
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