China's strengths are more in tandem with new developments and speed to market for higher-end pret-a-porter fashion.
Sharon Wood, Director of Europe of China Ting Group Holdings. Ltd.tells about the global status of China in the industry, as she converses with Fibre2Fashion Correspondent Manushi Gandhi.
Synopsis:
China Ting Group is a publicly-listed textile group, headquartered in Hong Kong with industrial facilities in China. Its vertically-integrated setup, supported by its sales offices worldwide in Europe and USA, makes it a partner of choice in apparel retailing and manufacturing, specifically in lady’s prêt-a-porter fashion.
Sharon Wood joined the China Ting Group in 2002 as Director of its European network with headquarters in Paris. She is active at building strategic relationships across the globe and matching strategy to markets for results. Ms Wood holds a Master’s degree from Oxford University, UK and HEC, France, specializing in consulting and change management within a multi-cultural environment.
Excerpts:
According to you, what is the most interesting part of being into apparels business?
The apparel business is synonymous with fashion and fashion is more than the clothes on a man’s back. Fashion is a symbol of culture, history, art and self-expression, an intimate part of oneself, carrying across a silent message of how one wants to be seen. It is fascinating.
Which is the latest technology that helps in raw silk processing and weaving?
Silk is a natural fibre linked more to agriculture than technology and processing this material and weaving has remained relatively unchanged over the years. The economic tsunami of 2008 has seen a change in consumer habits taking a downturn and the appeal of silk has dropped significantly because of its price as a luxury quality. Consequently, the number of silk farms have also diminished due to the lack of demand.
What business risks are involved in the business of apparel exporting? What kind of risk management is required in this business?
Things are not always what they seem nowadays and one of the biggest risks in export is the fact that, often, buyers live on the credit of suppliers while others, frequently, default on payments. When markets are faring poorly, some unscrupulous customers also summarily cancel orders for no valid reason or demand substantial discounts from suppliers. Credit insurance possibilities exist but this is costly and not applicable in all circumstances, only to customers that are not considered high risk.
In our case, we have a solid base of customers who have histories with us, some between 10-15 years, and we mutually support each other in times of difficulties.
China Ting Group Holdings Limited is into manufacturing as well as retailing of garments. Does this help your business anyway? Does it help to save cost when compared to manufacturing and selling to some other retailers?
China Ting’s manufacturing business took off in the early nineties and its retail venture started in 1998. Garment manufacturing is very specific in the type of products a factory is able to handle. For example, if a company specializes in ladies’ pret-a-porter, it would probably not be good at making jeans or men’s wear. So, for our export business selling to other retailers, the demand is very specific and not aligned with the needs of our own brands exploited in China.
The garment business has no single formula and every aspect is very clearly distinguished by its technology, skills and processes. Furthermore, the quality standard of production in China is a lot more demanding than that of Europe or the USA.
Our retail business is linked to our export manufacturing work in that we can share design and trends; however, the actual manufacturing itself is not very interesting to our retail supply chain because of limited processes as explained here above. To deal with a comprehensive line, we would have to look elsewhere for jeans, leather wear, furs, shoes, etc... which are not within our own production capabilities.
Please tell us how the apparel making industry of China has grown in last three years.
The apparel making industry in China has not grown, as such, in the past three years. On the contrary, a strong currency, rising overhead, labour shortage and energy problems have seen buyers of low-tech and labour intensive industries such as t-shirts, jeans, etc.. heading for cheaper markets in Asia, leaving China to monopolize a niche where technical expertise, a sophisticated and supple pool of labour and specific capabilities predominate in order to be better aligned in pricing. Consequently, China’s strengths are more in tandem with new developments and speed to market for higher-end pret-a-porter fashion.
The cost of apparel production has increased a lot recently. Cost of which resources have drastically increased and affected the business?
China’s factory overheads – electricity, water, logistics - have all increased exponentially. Rising costs of land prices, environmental and safety regulations and taxes all play a part and translate down the production line to raw materials. The biggest factor, though, is labour, of which there is a serious shortage thus driving hefty increases in wages despite the fact that productivity in China, overall, remains high.
What is the market size of luxury apparels in China?
I am afraid that I do not have the actual numbers for this. So far, luxury goods, including apparel, are a status symbol for the Chinese who are mostly self-employed or professionals. As the country progresses, so, relatively, does the expenditure of those who can afford and need to reflect prestige. This has, however, slowed since last year when the government clamped down on unnecessary expenses on luxury gifts and has had a significant impact on luxury retail in China, especially imports. Local luxury apparel received a boost this year when the president’s wife, Peng Liyuan, preferred a local luxury apparel brand over the usual imports, thus setting off a trend that is driving a different sector of the Chinese economy.
Has the growth of industries in China affected the environment in anyway? What steps have been taken by the Chinese government for conservation of environment?
Pollution is the penultimate scourge of the environment resulting from the large numbers of factories that have sprung up in the country. This has contributed to a permanent overhanging smog and water largely unfit for direct human usage, not to mention increased health problems. Excessive energy consumption also has been seen as a cause of overheating of the atmosphere. '
The government has, in as much as possible, launched environmental regulations and industrial reforms to try to curb this problem. According to the World Bank, 'China is one of a few countries in the world that have been rapidly increasing their forest cover to combat air and water pollution.” China has also put into place controls and spot checks of factories to ensure that chemical wastes are properly disposed of and that appropriate water treatment facilities are in place.
The company has planned to open few new stores this year. Which countries/regions are you eying for this?
Our core retail business is the China market where, as pioneers, we launched our first international brand, Finity, in 1998. We now have a portfolio of several brands being distributed on the national network, and this will continue to be our focal point. In the near future, a couple of hundred shopping malls are expected to spring up across the country and this augurs well for the retail industry in general.
According to your opinion, what is the scope for smart textiles and optical fibre clothing?
I think that, although the market is still relatively in its infancy compared to other qualities, there is a future for this. I am aware that there already exists smart textiles made into healthcare garments for the elderly, the fabrics of which are technologically constructed to emit signals (e.g. heartbeats) to doctors and distanced relatives, permitting them to monitor closely the health of the person wearing the clothes. China is a big country and young people today are forced to migrate for better prospects and jobs, leaving a large part of the aging population to fend for themselves. Recently, China passed a new rule to enforce elderly care but it is still difficult. If, one day, these special textiles and clothing can be more accessible in price and availability, I see it taking on a whole new dimension.
