The Pformation Of Zhejiang Index

More than 30 years ago, China's Hongkong, South Korea and other "Asia four small dragons", at the beginning of the take-off, made use of cheap labor force and undervalued currency exchange rate to develop export oriented labor intensive industries and accept industrial pfer from developed countries in Europe, America and Japan.

Then, with the development of economy, the cost of manpower gradually increases, and the huge trade surplus makes friction and pressure on currency appreciation increase.

In economics, this is known as the "30 year phenomenon".

To get out of the "30 year phenomenon", economists are always in a nutshell. The prescriptions are: industrial upgrading and structural adjustment.

Two major economic indicators of Zhejiang, the Yiwu commodity index and the Keqiao textile index, show similar directions for migration: labor pains and opportunities, new life or death.

"Enterprise chain and value chain" index behind a company's "dry land pulling onion" Fengyi group?

A textile printing and dyeing company is mainly owned by three enterprises, including clothing, home textiles, cloth and so on.

Shark?

Is it the home textile brand that came out in 2007?

Consumers may know.

This is actually the same company.

Shark is a brand that Fengyi group entered into the consumer market. Now it has gained a lot of fame.

In the past, Fengyi was only famous among producers, but it had little impact on consumers.

"We used to be a production brand, and now we are pforming into a commercial brand."

Wang Jiancheng, general manager of Shah shark International Group Limited, said that the production brand can also do well, but all of them work behind others, and downstream industries and sales are always controlled by others.

In the field of Chinese textile and clothing, Fengyi group's exports account for 25% of the global textile and clothing trade, but its own brand is less than 1%.

That is to say, over 99% of products are produced for others, and other people's trademarks are added to the market.

"In this industry, the space for technological innovation is relatively limited, and it is very difficult to completely pull away from the product."

Wang Jiancheng said that a commercial brand sells a brand rather than a product itself.

But for the production brand, it sells a piece of cloth.

"This is what Feng Yi did before."

With the increase of production cost and the change of foreign trade situation, although Fengyi still keeps a higher profit in the printing and dyeing industry, but to be a centennial enterprise, the brand assets of value-added enterprises at a higher level must have their own commercial brand, that is, bypassing the OEM, directly meeting with consumers, and directly entering the flow of commodity flow.

But for other small and medium-sized enterprises, it is more and more difficult to keep the profits before.

From the perspective of the change of export commodity structure since 2007, the proportion of labor intensive products represented by textiles has declined, and the proportion of textiles has dropped by 0.14% in the first quarter of 2008, indicating that the trend of upgrading of export commodity structure is still continuing.

Wang Jiancheng said that the market share of printing and dyeing has shrunk in general, and only large enterprises such as Fengyi can barely maintain stability.

Consistent with the strategic deployment of Fengyi group, according to the analysis of the index of Shaoxing textile Index Office, since December 2007, the sales of home textile products have sprung up, and some large-scale production enterprises have made some products brand effect through the development of new products. The domestic and foreign markets of curtains, window screens and household textile products have been expanded, and the prosperity index of these products has risen.

At the beginning of the choice of the path, Wang Jiancheng was faced with the choice of the two industrial chains of clothing and home textiles.

After analysis, Fengyi group thinks that the clothing industry has been very mature, and the development trend of home textiles in China is faster, but the overall level is not high, pregnant with huge market potential for mining.

In fact, "shark" is Wang Jiancheng's "management chain and value chain".

In this position, the market pressure is relatively small.

Due to the relative scarcity of product positioning, Shah shark home textile has joined dozens of franchisees in the market expansion.

Wang Jiancheng acknowledged that shark's profit margin is much higher than that of the traditional printing and dyeing industry.

"The space of commercial brand added value and intangible assets is very large, and the brand value added is not the simple price space, but the production brand is purely based on quantity, and it relies entirely on scale efficiency."

For enterprises in the low end product dilemma, pformation and upgrading is the only way out.

Or pformation and upgrading, from the low end of the industrial chain to the high-end development, from low value-added to high value-added development, from processing trade to private brand development.

Wang Jiancheng said that if we say that we have to pform, we can only write articles on the industrial chain.

If you leave your industry completely unfamiliar, you will die faster.

Fengyi group also has real estate, financial and other industries, but it can never be regarded as its main business.

Domestic demand, domestic demand, domestic demand re discovering the market, and re discovering competitiveness shark's extension of the industrial chain is also an inward turning strategy.

Because domestic consumption concept and market are turning to high-end, leaving good support for future development.

At the same time, the excellent brands of domestic textile industry are very few, and the overall positioning and level are not high.

Wang Jiancheng said it is optimistic that in the next 35 years, the domestic textile business environment will be greatly improved.

Saland home textiles may occupy a considerable proportion in the group company, and at the same time pform the layout of the domestic textile brand, and produce chain touch on other brands.

Even in Fengyi group's previous sales, the export share is not too big, "now the proportion is even smaller."

If there is no added value, it can not be done by low end products alone.

But not all enterprises can easily "extend" like Feng Yi. Wang Jiancheng estimates that if there is no support for cash flow of $56 million, such a pformation will not even pass the threshold.

"Many businesses can't do this.

No money, no idea, no money for ideas.

Even if these two conditions are available, it is also a test for us to organize teams in China.

When we were making shark brand, we dug up all the relevant talents in China.

Wang Jiancheng said.

Once pformation, we must enter the high-end field.

The low-end product market will quickly fail, because this part of consumers are very sensitive to price, while high-end customers do not care much about price.

If we start with low-end brands, we have to face second difficulties in pformation and entrepreneurship.

Even Wang Jiancheng thought that once he decided to enter the mid-range market, it would also face great difficulties. This part of the market began to have a large number of brands in the layout, and in the high-end market, there was little competition.

Shaoxing county has warned some enterprises to pform to low-end industries. A piece of material puts forward that we should further guide the adjustment and upgrading of traditional textile industry, rationally adjust the layout of production capacity, "prevent blind pformation and excessive expansion, and then lead to new overcapacity."

Mark, an economic observer of the Yiwu index and a PhD in economics and sociology of Cornell University, has conducted an in-depth study of Zhejiang's private economy.

He believes that every emerging economy will form a huge domestic market in the course of development. China has gradually begun to rely on the domestic market for economic development, which is most likely to be able to successfully cope with the economic downturn in the United States and the world.

Generally speaking, with the development of a country's market, information industry and service industry are becoming more and more important. The economic structure will also become more and more diversified and open, and the domestic market of this country will show its importance increasingly compared with its foreign market.

Like other Asian countries that have lagged behind, China's domestic market is booming.

At present, the development of the middle-income group in China is just beginning. It will take at least 20 years to achieve the ideal state. This process is China's advantage.

For foreign enterprises, how to contact consumers in China's small and medium-sized cities?

For the outside world, China is still an unknown market, which is an opportunity for China's small and medium-sized enterprises.

The true situation seems to be the case. The Yiwu index shows that in May, the textile industry, clothing and clothing climate index rose significantly, or 133.49 points and 118.93 points respectively, due to the rapid growth of domestic demand.

Every day, more than 100 new products are listed in Yiwu. The gross margin index is behind the rise. It is the power of innovation. The Keqiao textile index in January has a total business index of 1267.48 points, a slight increase over the previous period.

In May, the total production boom index reached 1786.62 points, an increase of 10.1% over the previous period.

But in May, the total circulation prosperity index was only 748.35 points, 7.29% lower than that of the previous period. Because of the same style, the price of the popular products has lost the competitive advantage, and the sales volume has declined significantly, which is much less than that of the same period last year, resulting in a decline in the circulation prosperity index.

The performance of Yiwu index has the same direction.

In April this year, the "operational quality" index, which represents the duration of enterprise survival in the Yiwu index, dropped slightly from 113.89 in March to 112.3 in April, a decrease of 1.39%.

But at the same time, the gross margin index performed well, up 2.03 points.

In May, most industries increased the profit margins of new products by enhancing the added value of new products and increasing the added value of products.

"The prosperity index and gross profit margin have increased, mainly due to the rapid expansion of the market for creative products, which are part of R & D production enterprises with R & D strength, with a high profit margin.

The decline in circulation index and quality is due to the rapid reduction in the volume of shipments of traditional products, as well as the decrease in the average legal age of the enterprises in the cosmetics, daily use and publishing industries.

Cheng Junping, assistant general manager of market development service branch of Yiwu Shangcheng group.

The reason for the slight decline in the average legal age of some market players is that a few enterprises with poor production and management are eliminated as competition intensifies.

Under pressure and in a small profit enterprise, the polarization phenomenon is obvious, and the pformation speed of enterprises is quickening.

Statistically speaking, the output of traditional leading products in Shaoxing has decreased, and the output value of textile industry has changed significantly. The output value of traditional chemical fiber weaving products (including polyester processing and non-woven fabrics) has increased by 14.5%, while that of needles and woven fabrics with relatively high added value has increased by 61.3% over the same period last year.

Cheng Junping believes that people's feelings and prosperity index sometimes have a short-term departure.

Of course, it is the easiest to sell the old product. Although the profit rate of the new product is high, the investment and the time spent in the market expansion are also many, which causes the impression that the business operator is hard to make.

Statistically speaking, since April, the speed of new product listing has accelerated.

The increase in the cost of old products, coupled with the pressure on each other, will definitely reduce gross margins.

If the gross profit margin goes up, it must be the new product listing.

Cheng Junping estimates that at least more than 100 new products are listed in Yiwu every day.

Of course, there is another reason, that is, the export volume of old products has been greatly reduced, so that the gross profit margin has increased statistically.

When the textile foreign trade index bottomed out, rebounded and upgraded to win the market's "right to speak", when the Yiwu index was released, the Yellow Sea, Assistant Minister of Commerce, said that the Yiwu index "is conducive to the enhancement of China's small commodity market and the right to voice pricing of global commodities, and has a positive impact on the global commodity price formation mechanism."

But in reality, the effectiveness of this index has appeared, but it is difficult to grasp the market control right fundamentally.

Experts point out that in order to have absolute pricing power, monopoly or scarcity only exist.

There are two kinds of monopoly: natural resources, such as oil and iron ore; the other is technology, such as Microsoft.

Because of the irreplaceable nature of resources and technology, enterprises can maximize profits.

Of course, on the same technology platform, brand also has its extended value.

The reason why the OEM is profitable is that the brand has also formed some soft value. Although it is not monopoly resources and technology, it has commercial power.

Although China's small commodities and textile industry occupy a considerable proportion in the market, they do not have monopoly advantages, neither have resource monopoly, nor technology monopoly.

The only reliable advantage is that it does not have a sustainable low cost advantage.

The quality of the foreign trade market also restricts the pricing power.

For less developed markets, price is more important between product quality and price.

"It only needs low prices and everything else is ignored.

As long as it's cheap, we can't sell the brand.

For such a market, if we want to raise the price, we should give up.

Yao Xianming, deputy director of Yiwu Municipal Bureau of foreign trade and economic cooperation, said that in fact, China's small commodities are facing such problems. The low-end export market has been a backward pull for Yiwu's upgrading and pformation.

"If you choose the wrong consumers, the producers are led by the nose unless you do not sell them.

Forming vicious circle and adverse selection.

This is directly reflected in the bargaining power of products.

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