Home >

2010 The Rise Of Labor Cost In Textile And Garment Industry Is Prominent.

2010/6/10 9:02:00 53

CICC Research Institute: recent labor force

cost

Rising has become a common concern of the society.

Textile and garment industry, as a traditional labor-intensive and low profit margin industry, is inevitably affected by this round of pay rise.

By analyzing the sub sectors of textile and garment industry, we compare the upstream and downstream industry chain, the scale of business and the scale of business.

Profit margin

The following conclusions can be drawn:

1. upstream producers and distributors are more affected by the rising cost of labor than brand operators.

Because most of the former two do not have their own brands, they rely on OEM or "move box" distribution and retail to earn lower profit added value, but a lot of cheap labor support is needed in operation.

On the contrary, China's local brands are mostly intermediate or low-grade, which can raise the average retail price by continuously increasing the added value of products. Therefore, the rise of costs can be pmitted to consumers, and the impact on their performance is relatively small.

2. for brand operators, the expansion of sales scale brings significant operation.

Leverage effect

To a certain extent, it can resist the negative impact of wage increases.

Under the similar operation mode, the large scale and fast growing brand operation enterprises are less affected by the change of salary.

3. the enterprises with lower net profit margins are relatively more affected by wage increases.

Based on the above reasons, we can see that the risk of production and distribution enterprises is bigger. We should avoid companies with low profit and labor costs, such as Yu Yuan, Wei Qiao textile, Germany Yongjia, Baosheng and so on.

At the same time, it is recommended to pay attention to brand operation companies, recommend men's clothing (Li Lang, seven wolves), sportswear (Lining, Anta, China trend), women's shoes (BELLE) and so on.