"Crazy" Cotton Trouble, Brand Clothing Enterprises Have Little Influence

Since the end of 2009, the price of international cotton has been rising. The rising tide of cotton has rapidly spread to all the raw materials, processing and garment industries and consumer terminals of the textile industry.

　　 "Crazy" cotton trouble

Brand clothing enterprises say little impact

In June 22nd, the A index of domestic cotton prices representing 229 cotton prices in the mainland was 18340 yuan / ton, and the B index representing 329 cotton prices in the mainland was 17954 yuan / ton. Cotton prices are still rising all the way. It is reported that the most worrying thing for textile enterprises is that they can not buy cotton that they are satisfied with.

Due to the soaring price of raw materials such as cotton and cotton spinning, textile enterprises generally face the dilemma of high production costs. Facing the situation of high cotton prices, the textile industry has to carry on the price to the downstream through the way of cost transfer. As the downstream of the textile industry, how will the garment industry cope with the hot potato thrown by the textile industry?

Insiders predict that in the second half of this year, garment enterprises will have a pattern of rising prices across the board, and garment processing enterprises receiving foreign orders will directly abandon their orders due to the increase of raw materials.

Zhou Dewen, President of the Wenzhou SME Development Association, told the Securities Daily that the wave of cotton boom will have some impact on Wenzhou's clothing enterprises. However, the smaller the impact on the larger enterprises, the smaller their risk control ability is. In addition, clothing enterprises have suffered more and more setbacks. Enterprises have learned to reduce internal friction, raise prices or even abandon foreign orders by improving management level. At the same time, Zhou Dewen suggested that the best way for clothing enterprises is to adjust their product mix.

Although the whole country is actively responding to the rise in cotton prices, the author has observed that the brand clothing counters of shopping malls have not found that their prices fluctuate significantly.

In an interview with the Securities Daily, Liu Xinyu, deputy director of YOUNGOR, said that since the second half of last year, cotton prices have been rising all the way. For YOUNGOR, due to the relatively accurate judgement of the situation in the second half of last year, the more than 10000 tons of long staple cotton were taken at a lower price, which made us relatively stable in the raw materials of high yield products. In addition, YOUNGOR has an industrial chain from cotton planting, spinning, weaving, finishing, garment manufacturing to channel retailing. The proportion of cotton in the whole industry chain is very small. YOUNGOR, as a brand retail enterprise, has strong bargaining power and pricing power, so the price of upstream raw materials has little impact on YOUNGOR.

According to YOUNGOR's public information, by the end of the first quarter, YOUNGOR clothing achieved 1 billion 474 million yuan of revenue, including 813 million yuan of domestic revenue, an increase of 23.83% over the same period last year, and export income of 660 million yuan, down 10.22% from the same period last year. The domestic sales of YOUNGOR brand clothing have formed a healthy growth trend, and the total profit has increased by 50% over the same period.

Wu Rongzhao, executive vice president of Hongxing Erke, a Singaporean listed company, said in an interview with the Securities Daily that the rise in cotton prices had no effect on Hongxing Erke. Wu Rongzhao said that Hongxing Erke is well aware of the power of "brand". After the Beijing Olympic Games, China's local sports brand became more mature. In the 2010 World Cup, although the top sports resources were monopolized by the two giants of Nike and Adidas, China's local sports brands still sought their focus. Hongxing Erke is a very typical example. Since he was the first company to list abroad in all sporting goods industry in China, the company went public in Singapore in 2005. Therefore, in terms of capital market grafting, Hongxing Erke is also in the forefront of the whole industry. At the moment when enterprises are in the 10th anniversary place, a new round of strategic offensive is ready.

　 Conform to the trend

Perfect connection between traditional enterprises and e-commerce

The rapid development of e-commerce today has a profound impact on traditional enterprises in brand building and product marketing. The author learned from Taobao that there are now tens of thousands of online companies under the formal registration of clothing companies opened shop on Taobao network, such as Lining, seven wolves, UNIQLO and other large brands of clothing enterprises in Taobao mall has flagship stores. It is understood that these flagship stores every day is very impressive. In addition, according to Wan Rui data network advertising industry monitoring, Hongxing Erke has chosen CCTV, NetEase, Tencent and other websites for brand promotion. In response, Wu Rongzhao said that CCTV, NetEase and Tencent are all the mainstream media of domestic authority. They choose these websites for brand promotion. These are very important resources in Hongxing Erke brand building. Wu Rongzhao told the author: "nowadays, enterprise network marketing is getting hotter and hotter, and the marketing budget of Hongxing Erke is gradually tilting to the Internet. In order to upgrade the brand sales system and further consolidate and enhance the channel advantages of Hongxing Erke, Hongxing Erke put forward the concept of "network intensive farming" in 2007. As advertisers, the accurate location, precise delivery, effective arrival and monitoring of online advertising are our concerns.

Hongxing Erke is a sports brand, so the brand building work is more focused on the competition. Wu Rongzhao introduced the Stuttgart open in July, the Shanghai masters in October and the South Island cycling open in November. Wu Rongzhao also revealed: "in collaboration with Renren, Tianya online and other hot websites in recent years, Hongxing Erke also started earlier. In last year's Shanghai Masters Games promotion program, Renren has been brought into the media, and the cooperation with Tianya has been very successful. Now, the happy men's voice activities in South China are also more sophisticated and enjoyable."

Internet, as a new medium, has a significant impact on brand communication and business model change. It is precisely because of the Internet's characteristics that YOUNGOR has paid great attention to the research and application of Internet in recent years, and gradually explored the power of network technology and network communication, integrated brand marketing and enhanced brand image. On the one hand, we should further strengthen the strategic role of the Internet as an enterprise resource, and on the other hand, combine the market and the Internet to form a support platform for e-commerce and network marketing. YOUNGOR Liu Xinyu said so.

Mei Tao, vice president of Wan Rui data, told the author that most of the traditional clothing enterprises are sample processing and OEM production. The profitability of enterprises is mainly to earn a small amount of processing fees, the industrial structure and product structure are convergent, and the technological innovation capability is not strong enough to win in export competition without breaking down the price. However, due to the recent surge in cotton raw materials and the increase in the cost of labor, although international orders are increasing, they are unable to produce. The export of traditional clothing industry to the forging of brands to break through the current situation is a way of Chaoyang.

The development of e-commerce mode can not only reduce the profit impact caused by the depreciation of the euro, but also maintain the existing profits through domestic sales, and it can also lower the cost of network sales through network marketing. Because the shopping habits of netizens are very different from before, online shopping has gradually become an indispensable way of life for Internet users.