Shishi: OEM has no future

As a famous textile and garment production base and distribution center in China, Shishi City in Fujian Province plays an important role in the industry. However, the spread of the financial crisis in 2008 made the economy of the small towns in the southeast coast, which has a heavy reliance on exports, be greatly affected. How will local governments and enterprises change their thinking and seek breakthrough? Recently, the reporter interviewed the deputy secretary of Shishi Municipal Committee and Mayor Huang Nankang.

Brand enterprises are up against the market

Reporter: The financial crisis that began last year has had a big impact on China’s export trade. The textile and clothing industry is a heavy industry. Shishi City is a big city of textiles and clothing. What will happen to the economy?

Huang Nankang: Indeed, under the impact of this world-wide financial crisis, the textile industry of our lions has been affected, but overall it is not very large. From the perspective of foreign countries, from the first half of last year to September this year, exports fell by about 10%, but the domestic growth was good, with an increase of nearly 20%. Therefore, the total number of garments and textiles has also increased by 7%. In terms of domestic sales and export ratios, according to incomplete statistics, about 45% to 50% are exports, and 50% to 55% are domestic sales.

What needs to be pointed out is that there is basically no closure of the textile enterprises of Shishi. Although a large number of small and medium-sized enterprises have been affected, some large enterprises have done better. In particular, our Shishi companies that focus on their own brands have not had much impact in the financial crisis. At present, the textile and apparel industry has slowly recovered as a whole and the export market has reached 50% of the same period of last year.

Reporter: Why do those companies that insist on self-owned brands have not been greatly affected? In this process, what specific work has been done by the government and the company to deal with this crisis?

Huang Nankang: It can be seen from two aspects. One is that our municipal party committee and municipal government have done a lot of work. Our government has helped them by introducing various policies to support the development of enterprises, such as requesting banks to provide loans, promoting enterprises to accelerate technological transformation, upgrading products, updating service levels, and strengthening management. At present, enterprises have already experienced the most difficult time, and the entire industry has begun to pick up. In particular, some relatively large enterprises have rather large developments in the process. In short, although the financial crisis has a certain impact on them, the overall impact is not too great.

The second aspect is the enterprise's own efforts to strengthen the sense of innovation and improve technological innovation and marketing innovation. In the financial crisis, some well-known foreign brands have been more affected and various problems have emerged, so that they have freed up the market share they once occupied. Some of our lions companies have taken aggressive measures to seize market share and have meticulously positioned themselves. Instead, they have gained some of the lost shares of foreign brands.

The impact of exports is mainly reflected in OEM companies. Many companies in Shishi used to do OEM processing for some well-known foreign brands, but these companies have actually been affected. However, the enterprises that mainly sell their own brands have actually gained market share.

In general, in the past, Shishi's textile companies had their own brands in the country, but they were mainly OEMs for others in foreign countries. This strategy will need to be changed in the future. Of course, creating a brand is not an easy task. Foreign big brands have a long history of accumulation. Our Shishi corporate brand will also have a small to large creation process.

The government led the team to "go out"

Reporter: It is well-known that Shishi is a famous city for casual wear in China, Shishi surface accessories have occupied half of the Shishi textile and garment industry, and Shishi has been awarded the title of “China Fashionable Fabric Release Base” by the China Textile Industry Association. Then, what are the strategic changes in the future development of Shishi in addition to continuing its own advantages?

Huang Nankang: Shishi's surface accessories industry has four major development advantages.

First, strong industry support advantages. The most advantage of Shishi textile and garment industry lies in the formation of a complete textile and apparel industrial chain with garment processing and production as its core. The market chain of various elements of the industry chain is very complete, with professional division of labor in all aspects, seamless collaboration and self-contained system, which provides strong support for the Shishi surface auxiliary materials industry. Second, innovation and research and development advantages. In recent years, Shishi has vigorously implemented the strategy of making cities and cities prosperous by science and technology, and has formed an innovative R&D system that combines enterprises as the main body, market orientation, and production, learning and research. Third, the developed market system. Shishi is known as the “small city, big network” and Shishi fabric market is famous. Fourth, the advantage of fashion information center. As a fashion source for casual wear, Shishi has built an open publishing platform that brings together a large amount of information flow, technology flow, and talent flow. China Textile Information Center, the authoritative publishing agency for national fashion trends, is launching a series of fashion and innovation events each year to provide more creative elements for apparel companies and fabric manufacturers.

Reporter: The 15th China International Fabrics and Accessories (Autumn and Winter) Expo, held in Shanghai, was attended by leaders of the Shishi City Government with 45 companies and over 200 people. The government’s participation in such a large-scale team exhibition must have its profound meaning and purpose. Can you talk about it?

Huang Nankang: For this Expo, the municipal party committee and the municipal government attach great importance to high-profile participation. The main purpose of our participation in this conference is to promote exchanges between enterprises and domestic and international counterparts, to acquire advanced technologies and information, and to accelerate the integration of domestic and international development trends. We organized 45 influential companies to participate in the exhibition. The exhibition area covers more than 1,700 square meters. We are striving to have more booths next year. Even if we pack one or two exhibition halls, there is no problem. The enthusiasm of the companies is high.

Our companies have invested a lot of energy, and many of the industry's features have also been shown with relative concentration. Through this exhibition, we believe that Shishi's textile fabric enterprises will be further promoted into domestic and international competition. In fact, not only participated in the International Textile Fabric Accessories Expo, we also organized delegations to participate in the Beijing Exhibition and related exhibitions in Taiwan. In the future, we must consciously recommend Shishi's textile fabric accessories.

A complete chain attracts Taiwanese companies

Reporter: Not long ago, the State Council issued the “Some Opinions on Accelerating the Construction of the Economic Zone on the West Coast of the Straits”. Does this create a second chance for the Shishi to take advantage of the opportunity? How will the Shishi seize the opportunity?

Huang Nankang: Stone lion has a long history in the textile industry and Taiwanese. Many companies in Shishi are learning and learning from the successful experience of Taiwanese business development and have grown up. With a major strategic opportunity to speed up the construction of the Hexi Economic Zone, Shishi City took full advantage of the regional brands and geographical advantages of China's casual apparel cities, and actively promoted industry docking, trade docking and cultural docking between the two places, highlighting the “Cross-Strait Textile and Garment Expo” and There are two platforms: the "Taiwan-Taiwanese Cross-cultural Festival and the Songjiang River Songkran Festival". In addition, we have also accelerated the construction of three carriers for Taiwanese investment in demonstration parks, Taiwan-to-Taiwan trade market, and cross-strait direct seaports—the main harbor area of ​​Shizhou Lake in Quanzhou, and we are devoting ourselves to creating a frontier platform for exchanges and cooperation with Taiwan. The important base of the chain and the service channel for the port logistics in Taiwan.

Reporter: As a result of the national strategy for establishing the Hexi Economic Zone, many surrounding cities are trying to seize this opportunity and compete fiercely. For Shishi, what are the advantages and disadvantages in this competition?

Huang Nankang: There are many companies in Taiwan looking for markets and business opportunities. Some have come to invest, others have come to establish offices first, to promote their fabrics, technologies and garment designs. Some companies simply sell products produced in Taiwan directly. At present, there are about 200 to 300 relatively small companies in Taiwan operating clothing products in Shishi. In particular, under the influence of the financial crisis in Taiwan, many companies are looking for markets and product outlets. Most of them want to use the lions platform. Because Shishi's apparel industry chain is relatively complete, from weaving to spinning to garments, and then sales, the entire network is relatively complete, and other cities are hard to find. Taiwan Textile and Cloth Association has close communication with us. After the proposal of the strategy of the Hercynian Sea, it has indeed created a great business opportunity. We will use the corresponding policies of the State Council and the provincial and provincial governments to take concrete measures to promote this progress.

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Shishi is located on the southeastern coast of Fujian Province and faces Taiwan Province across the sea. The coastline is 67.7 kilometers, the city's area is 160 square kilometers, the permanent population is more than 300,000, overseas Chinese and Hong Kong, Macao and Taiwan compatriots are more than 600,000, and the floating population is more than 400,000. In 2008, the city achieved a GDP of 28.78 billion yuan, total fiscal revenue of 2.6 billion yuan, and per capita GDP and per capita fiscal revenue reached 52,662 yuan and 4,785 yuan respectively. The comprehensive economic strength of the city ranks 11th in the competitiveness of the county-level cities nationwide, and it has become one of the 30 cities that have received the most attention in the 30 years of reform and opening up.