New Observation On The Traditional Clothing Industry In The Pearl River Delta

In Panyu, Guangzhou, there are two unicorn enterprises, TEMU and Xiyin. These two e-commerce platforms have never carried out sales business in China, but they have attracted much attention due to their overseas "phenomenal" hot consumption. Behind the "Flowering on the Wall and Fragrance on the Wall" is a complete supply chain and industrial chain formed with the "World Factory" as the hinterland.

TEMU is taken from "team up price down", which means "group buying makes prices more favorable". It is a cross-border business platform under Pinduoduo, an e-commerce giant. One year after its establishment, TEMU has been launched in 47 countries. In the first three quarters of this year, it attracted 120 million overseas consumers to download and sent 1.6 million packages every day. It is understood that the target of TEMU turnover in 2024 is 30 billion US dollars, more than twice the target of this year.

Xiyin is a transliteration of SHEIN. In the industry rankings in the United States, Xiyin has become the fourth most popular clothing brand, and its influence in overseas markets has been growing.

Now, relying on the hinterland of the "world factory" and the perfect supply chain, a number of enterprises have grown into "world-class" brands, writing a new legend of Guangzhou goods again.

In the opinion of Liu Hang, the director of the cross-border business of Pinduoduo, the cross-border department of Pinduoduo, Guangzhou has a profound business background and a relatively complete supply chain system accumulated under the "millennium commercial capital", which has contributed to many industrial clusters such as textile and clothing, leather goods, cosmetics and daily chemicals. Relying on the strong manufacturing capacity of the Pearl River Delta, Guangzhou can also achieve advantages resonance with surrounding cities and regions.

"One of TEMU's core strengths lies in the accumulation of supply chains." Chen Lei, chairman of Pinduoduo Group, said that the strong supply chain capability has made Guangzhou garment manufacturing industry "small, fast and provincial" and can respond to market changes quickly. Once the test clothing becomes popular on the platform, the back-end factory can quickly follow up the production and replenishment, and can convert the demand into products in a short time.

Less than one kilometer away from TEMU's business center in Panyu, Guangzhou, it is the office building of Fast Fashion cross-border e-commerce Guangzhou Xiyin International Import and Export Co., Ltd. The production mode of "small single quick return" is an important magic weapon for Xiyin to win. "Small order quick return" means abandoning the traditional heavy capital and high inventory mode of "forecasting market demand and preparing goods in advance" in the clothing industry, adopting the mode of reducing purchase batch, shortening production cycle, quickly testing market reaction, immediately increasing production and quickly distributing goods once the amount of money is sold out.

"The trend of diversification and instantaneity of fashion consumption demand has put forward higher requirements for brand supply chain response," said Ju Kechang, director of supplier management of Xiyin, "Relying on the insight into the consumption trend, the company realizes the integration and efficient management of the huge supply chain. Each SKU (inventory measurement unit) generally starts to order one or two hundred pieces. If the sales trend is good, the order will be returned immediately. If it does not meet the expectations, the production will be stopped."

On May 8, 2023, the Guangzhou Station of 2023 Great Bay Area Fashion Tour Exhibition opened. The picture shows the audience visiting the exhibition hall. Photographed by Lu Hanxin, reporter of Xinhua News Agency

The perfect industrial chain and supply chain have contributed to the continuous development and growth of enterprises. Now, Xiyin and TEMU have made Chinese clothing popular overseas, "overwhelming", while some independent brands are moving towards the high-end market, showing a momentum of "indomitable".

Walking in the airport store, you can always see a golf dress logo, which is a clothing brand - Biyin Lefen. The price of a Polo shirt in the flagship store can reach 1000 yuan. Bienlefen is known as a dark horse in the domestic clothing industry, with high-end fashion sportswear as its main product. What few people know is that this is an enterprise headquartered in Panyu, Guangzhou.

After 20 years of development, Biyin Lefin Group achieved an operating revenue of 2.796 billion yuan in the first three quarters of this year, with a year-on-year growth of 25.67%; The net profit attributable to the parent company was 758 million yuan, up 32.17% year on year, and the revenue and net profit increased for 12 consecutive years. Xie Bingzheng, the chairman of the board of directors, said that in the next ten years, he would aim to achieve a total revenue of more than 30 billion yuan and aim at 50 billion yuan.

With the help of Xiyin, TEMU and other platforms, the "World Factory" is also constantly transforming and upgrading. Ju Kechang said that in recent years, by providing intelligent production and digital management systems for partners, a large number of cooperative production partners have been helped to realize production standardization and management modernization, and the "flexibility" of the entire supply chain and industrial chain has been constantly improved.

As a supplier of Xiyin, Guangzhou Guangjia Garment Co., Ltd. has more than 20000 pieces of clothes shipped every day. Wang Yonglun, the general manager of the company, introduced that Xiyin's "small order quick return" production mode requires suppliers to reduce inventory and speed up production to flexibly adapt to market changes. Through transformation, the company shortened the delivery time of finished products to two or three days.

At present, Xiyin is extending and building an intelligent supply chain system in Guangzhou, Foshan, Jiangmen, Zhaoqing and other places, and plans to form a domestic centered and brain based intelligent supply chain system, supplemented by the global industrial layout in other local areas. Duoduo will continue to expand its business in other European countries, South America, the Middle East, Africa and other regions. Biyin Lefin spent hundreds of millions of yuan to acquire two international luxury brands, layout overseas R&D and innovation centers, and stride forward to global luxury brands.

Chen Shaotong, secretary-general of Guangdong Clothing Industry Association, said that Guangzhou is China's largest textile and clothing trading center and an important clothing processing and production place. As the industry pursues high-quality development in the direction of digitalization, fashion, branding and greening, more and more medium-sized and medium-sized enterprises are transforming, and more and more world brands from China are bound to emerge. (Xinhua News Agency reporters Zhou Qiang, Wu Tao, Ding Le)

(Source: Xinhua News Agency New Media)