Che Yong wants to build his garment factory into a fashion empire like H&M, the Swedish clothing chain that has dominated China's young fashion street, but so far his designs have only gathered dust.
Che's company, Wansi Garment, produces thousands of shirts every year for overseas buyers, including a recent order which featured Disney cartoons.
Wansi is one of the 700-strong garment exporters at Luojiaji, a district in Nanchang city and a famous T-shirt export base in central China. Luojiaji produces a third of China's exported T-shirts. It is little known to the Chinese public but is well-known among foreign buyers. Customers include Walmart, Starbucks and NBA-franchised firms.
In the past two years, factories at Luojiaji have been forced to reinvent themselves as profits were squeezed by soaring costs, few tax incentives, loss of orders, and appreciation of the Chinese currency yuan.
Che Yong also tried remodeling by building his own brand, but his decision has been met with challenges.
"No one knows my brand and no one comes to buy them," Che said, with a bitter smile. At least two million yuan (about 310,000 U.S. dollars) worth of clothes are stashed in storage.
"Luojiaji is very strong in manufacturing, but we have little experience in design and sales," he said. Last year, Luojiaji churned out 650 million pieces of clothes and hired about 70,000 workers.
"Most firms have started to sell clothes under their own brands, but no one is strong enough to establish itself in the market," he said.
Nonetheless, Che remains committed to his dream of a fashion empire. Swedish H&M has fared well in Chinese market thanks to its concept of fast changing collections of affordable clothes. Buyers queue up to pay at downtown H&M stores in Beijing. Other fashion brands like Spanish Zara and Japan's Uniqlo are also popular in China.
Che Yong is seeking partnership to build a chain like H&M in smaller cities. At Luojiaji, some firms specialize making round-neck shirt, some have original design in floral print, and some are good at making sturdy collars. "We shall pool our strength together, and build a chain like H&M or Uniqlo," he said.
SAILING UP VALUE CHAIN
At Luojiaji, Wan Suli is another veteran entrepreneur who is determined to establish a valued brand.
With 20 years sewing Starbucks logos and NBA sports shirts, Wan established her own brand Fengyitianxia (meaning The Majestic Phoenix) to sell traditional Qipao dresses for ladies. In the last three years, she spent 40 million yuan marketing the brand.
"They all say I'm crazy, spending money like that. My annual sales are only 60 million yuan," Wan said. "But I believe in the multiplying power of brand".
Her designer lady gowns cost 4,000 yuan (about 615 U.S. dollars) a piece and a hand-embroidered customized design can fetch 100,000 yuan (about 15,290 U.S. dollars).
Last year, selling designer gowns contributed to 20 percent of her sales. However, Wan's branding efforts have been challenged by the current economic difficulties such as cash shortage.
"The materials vendor said I had to pay cash, and I don't have that much cash, because we usually collect the payment several months after the delivery," said Wan. She had to turn down 90 percent of the gown orders in the last few months.
"The minimal period for a brand to establish itself is five years. I believe I will survive," she looked optimistic.
INDIVIDUALIZING
For the last three decades, Luojiaji has operated under a fixed model like any other manufacturing hub in China: earning money by quantity and churning out tens of thousands of same T-shirts.
Zhang Donghong, vice manager of Huajun garment company, said a single order could reach 500,000 shirts, and the smallest was 50,000 pieces.
"We wouldn't do anything fewer than that, because we counted on the large quantity to make profit," he said. The company made 50 cents from each shirt.
The pattern had been forced to change. "Customers have become more discerning, and nobody likes to meet her twin," said Zhang. Now executives like Zhang are worried big orders will hurt employee skill levels.
The E-shopping age also means more individualized demands. Earlier this year, a Welsh customer ordered 100 men's shirts, worth 819 U.S. dollars. "By reaching to end customers, we earn 50 percent more than wholesaling," said Zhang.
The shirts were sent to the customer through DHL delivery. Huajun company has hired 50 workers to handle such orders from online commerce platforms of Alibaba, Ebay and Amazon.
Many companies have tapped into domestic buyers, a traditionally blind spot. Thirty-five percent of the sales of Huaxing garment company, one of the biggest in Luojiaji, were made by domestic buyers last year.
CUTTING COST
Li Chunming, owner of the Jiangxi Global Textile and Garment Company, has just lost a big client. "A partner whose annual sales were 300 million yuan jumped camp to southwestern Asian countries," Li said.
"Factories in Vietnam and Bangladesh have snatched away orders at prices 20 percent lower than ours," said Li.
For the past years, orders have kept growing by 10-15 percent every year in Luojiaji. Before 2015, companies had to fight for workers to meet growing orders. But last year, the orders did not grow at all, company executives told Xinhua.
"I have been advised to open a factory in a southwestern Asian country," Li said.
For Luojiaji factories, cost-cutting is inevitable. The Huaxing company bought an automated hanging system, which replaced 15 percent of the workers. Laser cutting equipment helped save 20 percent of the fabric than manual cutting.
INNOVATION & MARKETING
Local government has also felt the pain of the companies and forked out fund to aid the development of the garment industry.
A fabric market costing 1.2 billion yuan (about 180 million U.S. dollars) is under construction in Nanchang. It will begin operation from October this year, said Qin Runming, director of the Changdong Industrial Park at Luojiaji.
"The park will help local factories cut costs, as they will not have to travel to the eastern coast to find fabric and materials," said Qin.
The Jiangxi government will also build a 30-hectare area to boost innovative design and market for the garment factory.
With a 1.5 billion-yuan price tag, the park will be completed by 2018. "It will attract design firms, labs and fashion talent," said Qin. Fashion shows and exhibitions will be organized to market these designs, and e-commerce companies will be invited to help the company sell their clothes.
"Branding and marketing will make us strong ,but it will be a hard journey, and we need face it head on and move fast," he said.
