Transformation and Change of Employment: Diversified Ventures for Garment Enterprises

In the world of fashion, 200 million shirts could be exchanged for a Boeing airliner. This staggering comparison highlights a growing consensus: China is a giant in clothing production, but not yet a true leader in the industry. The transformation of business models has become a crucial choice for apparel companies, one that can determine their survival or decline. Many domestic garment companies initially achieved rapid growth through simple competition—mass production, high volume, wide distribution, and low prices. This strategy created an illusion that past success could be replicated indefinitely. However, markets are never static, and what worked before may now be leading to failure. The recent inspection failures of Shanshan’s underwear serve as a painful lesson for the entire industry. Looking out from the office window of Haopai Group’s Xiamen Trade Company, seagulls occasionally fly by, symbolizing a fresh start. Despite strong domestic sales, the group managed to weather the financial storm and inflation. At 67, Hongshou took a bold step into e-commerce, showing determination to evolve. Over the past 30 years, Hongxuan, the chairman of Haopai Group, has remained cautious. “So far, there has been no one in the bank,” he said. Since the founding of Xinjiali Garment Factory in 1979, the company has stayed focused on clothing, never deviating from its core business. The company's economic growth has mirrored China’s GDP, consistently rising without a single year of loss. In 2010, sales of Hao brand garments reached nearly 2 billion yuan, up 30% from the previous year. But the same year brought unprecedented cost increases, with fabric prices jumping from 8 to 17 yuan per meter and labor costs rising by 50-60%. Haopai Group is investing 100 million yuan in an e-commerce project, set to launch in May and eventually operate independently. As the industry faces challenges, many "non-professional" garment companies are either transforming or diversifying, a path that has become essential for survival. Youngor’s chairman, Li Rucheng, has faced criticism over the company’s diversification efforts. Meanwhile, Zheng Yonggang of Shanshan Group has shifted focus entirely toward new energy and investments, stating, “I don’t care about clothes anymore—I’m investing.” Shanshan, once a dominant name in men’s wear, has seen its suit stores disappear from major cities. The company is now the largest supplier of lithium battery materials, aiming to move into the automotive battery industry. Zheng predicts that the future belongs to new energy, and Shanshan’s long-term investment will pay off. Meanwhile, Youngor has expanded into real estate, equity investments, and even gaming. While its clothing margins have declined, profits from other sectors have surged. In 2009, 86% of Youngor’s net profit came from real estate and investments, highlighting the shift in focus. Despite these changes, the textile and apparel industry remains vital. In 2010, China’s exports totaled $206.53 billion, and domestic retail sales hit 588.4 billion yuan. However, experts warn that this growth is short-term, and the coming years may bring tough challenges, especially for smaller firms. Cotton prices have soared, and many companies are reducing production, outsourcing instead. Shanshan has cut 70% of its production capacity and closed hundreds of stores. The recent quality inspection failures have raised questions about oversight and management. Industry experts like Cui Tao emphasize that many Chinese apparel companies grew quickly through basic strategies, but now face homogenous competition. Without innovation, they risk falling behind. While some leaders, like Li Rucheng, remain committed to clothing as the foundation of their businesses, others, like Zheng Yonggang, are pursuing broader opportunities. For Haopai, the focus is on overseas expansion and e-commerce, though both remain in early stages. As the industry evolves, capital is becoming a key factor. The menswear sector is entering a new era of “capital warfare,” where strategic investments and resource allocation will determine success. Companies must adapt, innovate, and find their unique advantages in this rapidly changing landscape.

Woven Fabric

Woven Fabric,Viscose Crepe Fabric,Bubble Fabric,100% Printed Viscose Fabric

Shaoxing Xiaotrain Imp.&Exp Co., Ltd , https://www.xiaotrain.com