Going global and facing a bigger world, Fujian textile enterprises move to a new overseas stage
According to the Fujian Provincial Department of Foreign Trade and Economic Cooperation, in the first half of 2008 alone, Fujian Province approved 80 new foreign direct investment enterprises, with a total agreed investment of US$229 million, and actual Chinese investment of US$183 million, an increase of 129% and 129% respectively over the same period last year. 50% and 206%, all three indicators reached historically high levels.
At present, more than 300 enterprises in Fujian have established overseas trade outlets in Hong Kong and other places, and nearly half of the overseas private enterprises are engaged in the development of trade and service industries. As of the first half of 2008, there were 486 approved private overseas enterprises in Fujian Province, accounting for nearly 71.5% of the total number of approvals, with a cumulative overseas direct investment of US$490 million.
In 2008, affected by the financial crisis, the export situation of textile and clothing, footwear, luggage and other industries was quite severe. In the domestic market, the transformation of foreign trade companies and the expansion of domestic brand sales networks have made competition even more intense. Therefore, “going global” has become the only choice for some enterprises. Like the “diversification strategy”, many Fujian companies have put forward “strategies” in recent years and have begun to take steps to go abroad and plan overseas expansion.
According to the Fujian Provincial Department of Foreign Trade and Economic Cooperation, the main form of overseas investment by Fujian enterprises is to take trade as the guide, set up their own overseas trading companies, or establish direct sales channels such as chain stores and brand stores to master sales channels and value value-added link to enhance competitiveness in the international market.
At the same time, overseas processing trade, which engages in production and processing overseas to drive the export of raw materials and equipment in the province, has also become the mainstream way for Fujian private enterprises to invest overseas. There are currently more than 150 private enterprises in Fujian setting up overseas processing trade enterprises, involving textiles , clothing, building materials, sports shoes, edible fungi and other fields, driving the export of a large number of raw materials and semi-finished products every year.
According to statistics, in 2007, Fujian Province completed a total of US$219 million in foreign investment, a year-on-year increase of 27%, of which Chinese investment amounted to US$136 million, a year-on-year increase of 56%.
●Fangyanquan Enterprises plans overseas expansion●
In Quanzhou, Fujian, where sports companies are concentrated, in March this year, Peak launched the “Ordering Fair” banner for the first time at the “2008 Autumn and Winter New Product Launch Conference and Ordering Fair”. The scope of the ordering fair has been upgraded from nationwide to. At the ordering meeting, in addition to previous domestic agents and dealers, Peak also invited more than 40 dealers from more than a dozen major countries in Asia, Europe, Oceania and the Americas.
As one of the earliest companies in China to launch a “brand” strategy, Peak had earlier sponsored the European Basketball League and the Australian Basketball Team. According to the person in charge, Peak has basically completed the network deployment in major national markets such as Asia, Europe, South America, and Oceania.
In the clothing industry, as they gain a foothold in the domestic market, many clothing brands are also testing overseas markets. In early 2007, Lilang represented Chinese men’s wear on the stage of Milan International Fashion Week for the first time, taking the first step as a brand. At the end of last year, the purpose of Jiumuwang’s full sponsorship of Philharmonia’s Taiwan tour was to prepare for its opening of a specialty store in Taiwan. Earlier, Quanzhou Green children’s clothing brand had begun to establish stores in Saudi Arabia, Russia and Turkey.
Setting up exclusive stores abroad means that Quanzhou companies are already exporting their brands, which was difficult to imagine in the past. Take shoes as an example. Quanzhou shoes used to go to wholesale markets overseas for a long time. When they reached the terminal, they entered warehouse supermarkets or became stalls in flea markets. There was no obvious reflection of brand value. In the past two years, with the continuous development of brand awareness of Quanzhou enterprises, more and more enterprises have chosen to build their own channels in overseas markets.
●Rising costs to build overseas production bases●
Jinjiang Guohui Shoes set up its factory in Vietnam a few years ago, where it cooperates with dealers to produce Guohui’s brand shoes. It is understood that Guohui currently has 4 shoemaking production lines in Vietnam. Taking advantage of the cheaper local labor force and the local government’s preferential policies to support development, the new production base has a certain cost advantage compared to the current domestic shoemaking companies.
Quanzhou Baofeng Shoes Co., Ltd.’s plan to build overseas factories is also in progress. Last year, it visited the Philippines, Vietnam and Indonesia for inspections, with the intention of setting up overseas factories in Indonesia.
The reporter learned that Quanzhou sports brands currently exploring the market in Southeast Asia in the form of exclusive stores include Anta, Xtep, Hongxing Erke, Yali De, 361, etc. In the Southeast Asian market, Xtep is developing rapidly. , it has opened exclusive stores in Malaysia, Thailand, Singapore and other places, and has formulated brand advertising plans in Malaysia and other countries. This year, Xtep will increase its brand promotion work in Singapore, London, New York and other places, encourage powerful dealers to go abroad, and bring Xtep to the world.
Southeast Asia is also the main market for the overseas expansion of the Anta brand. Currently, Anta has stores in the Philippines, Singapore and other places. According to reports, Anta will open more branches in Southeast Asian countries in the future.
The Southeast Asian market has also attracted official attention and is becoming a driving force for companies to enter Southeast Asia. In April 2008, relevant parties in Jinjiang City organized 10 companies including Hengan, Septwolves, and Xunxing to conduct a…During this trip to Southeast Asia, I went to Cambodia, Thailand, India and other places to inspect the investment environment. The inspection content mainly included visiting local enterprises and industrial zones.
According to analysis, the hope of relevant parties is to use this as a “springboard” to adopt an economic and trade cooperation method of all overseas or one end in and one out, and open overseas processing plants that match local industries. This way, both external resources and avoid trade barriers.
When talking about choosing the Southeast Asian market, the heads of many Quanzhou companies expressed the same view. They believe that Quanzhou is a famous hometown of overseas Chinese, and the early private economy in Quanzhou also relied on overseas investment, most of which came from Southeast Asia. The vast resources of overseas Chinese are the reason why Quanzhou companies prefer Southeast Asia. With the help of local overseas Chinese, Jinjiang brands can quickly develop.
●Talent is still the key●
Strategy is of increasing significance to many spring companies. When Anta proposed the strategy of “deeply cultivating China, deploying in the Asia-Pacific, and looking forward”, it stated that by 2010, sales in overseas markets will account for 10% of Anta’s total sales.
However, some business owners also admit that they are not ready to build production bases overseas. “The local policy environment is not familiar to me, and the management methods that are effective in China may not necessarily work outside.” A person from a garment company said that although overseas does have comparative advantages in labor, land, etc., in terms of labor efficiency It’s not necessarily very high, so I won’t try it rashly.
Industry insiders pointed out that when international brands enter the Chinese market, they must first face a series of localization issues. Among them, localization of talents has become the key. Some people believe that the lack of talent will be a major problem for the current overseas expansion of Quanzhou brands. In addition, how to adapt products to the local market and “localize” the brand is also a problem.
Some analysts pointed out that Quanzhou enterprises must have first-class management, first-class talents and first-class products. For brand companies, they must first realize the domestic market before they can discuss the issue. AADFWGREGTR
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