Image source @ Visual China
Text | Outside the Five Rings, author | Deng Xuan'er, Editor | Leave on leave
Guangzhou Costume Man: Miserable!
Guangzhou, which is known for its slow pace, has such a different place, where everyone is busy, as if time is traveling at twice as fast: there are freight people who are pulling small trailers in a hurry, there are clerks who are racing against the clock to tally, and even strangers carrying large black and white plastic bags in their hands.
The New China Building in the Thirteen Lines is crowded (Source: Liu Jingjing)
Here is the thirteen lines of Guangzhou wholesale street, is the last few rings of Guangzhou textile and garment industry chain, the street is only 400 meters long, but it brings together the New China Building, The Red Sky Building, the Oriental Red Clothing Wholesale Market several batches of nationally renowned wholesale markets, tens of thousands of stores, is one of the most profitable commercial markets in Guangzhou.
A large number of clothing wholesale business districts and shops gather around 13 Xing Street (Source: Baidu Map)
In addition to the thirteen lines, Guangzhou also has three large wholesale markets, which are centered on Guangzhou Railway Station, Shahe and Zhongshan Eighth Road, which jointly take on the girder of Guangzhou's garment wholesale industry.
"80% of the spring and summer are from Guangzhou", this is a well-known phrase in the clothing industry.
The clothing in these places flows to the secondary wholesalers including clothing store owners, Taobao store owners, brand owners, etc., and these second batches should have been the "last mile" for consumers, and consumers took these models home through the form of "people looking for goods".
With the rise of live broadcasting, these two batches have found a new magic weapon to get rich, they through the establishment of their own live broadcast team, or looking for Sydney, Weiya and other anchors with goods to "find people", an anchor daily GMV millions of times, only a platform of vibrato, men's and women's live GMV reached 8.9 billion yuan in 2020.
As a result, live broadcasting, wholesale, clothing processing, plating, and design have jointly supported the trillion garment industry chain in Guangzhou.
Laymen look at the lively, insiders look at the doorway, these wholesale markets, is the designer Liu Jingjing most often visit the place, in the field of clothing has worked, created a business, both familiar with the wholesale market doorway, but also understand the bitterness of the supply chain, in this line, both understand and helpless.
01 The landlord is the top of the tower, and the practitioners accompany the run
"There are more than a dozen square meters of clothing stores here, and the rent can reach 600,000"
If there is a pyramid for textile and garment practitioners, then there are only two floors, the top of the tower is the landlord of the wholesale market, and the tower body is the practitioner of various other links. In the thirteen lines, a small shop of only 10 square meters, the monthly rent reached 25,800 yuan, which is still cheap, because it belongs to the commercial street with a relatively scattered flow of people.
The rent of the thirteen-line roadside shop is 25,800 yuan / month, which is not high (Source: Anjuke)
If you move the location to the New China Building, the fourth, fifth and sixth floors are mainly for Korean clothing, but also the most expensive storefront, more than ten square meters of cubicle paving monthly rent can reach 40-600,000, the lease period is generally three to pay one.
Without millions of cash flow, there is no clothing wholesale in Guangzhou.
"The New China Building opens at 7 or 8 o'clock in the morning and closes at 3 p.m., with a rent of 4.8 million a year, and the average daily sale of 1,000 pieces can save the capital," Jingjing said, adding that the wholesale shop owners who are not so strong are largely working for the landlords at the top of the pyramid.
Inside the New China Building, shops are densely packed (Source: Panyu Hui)
The high-investment and high-risk employment state of wholesale store owners is only a corner of the clothing industry, and the little sister in the store, the designers behind the industrial chain, the workers, the pattern master, etc. are another state.
Tens of thousands of garment factories, more than 100 billion market size, but the survival status of most of the enterprises is not so legal, "no guarantee, no money, serious internal involvement", is Liu Jingjing's first few years of work in the most real situation.
Liu Jingjing's first job was as an assistant designer at a clothing brand. The position of designer is very popular in the garment textile and garment industry, whether it is an upstream factory, a downstream brand, or a wholesale market.
However, no matter which party, there is a problem of not signing a labor contract and not having social security. It's no secret, nor is it the state of a company in the apparel industry, but a law that almost everyone in the industry knows and defaults to.
"Asked a lot of companies, the larger companies will pay five insurances, pay a very small amount of money; smaller companies, have labor contracts are very luxurious, let alone five insurances and one gold." After Jingjing interviewed several times, the job search values changed from "there must be five insurances and one gold" to "it is good to be able to sign a labor contract".
According to the data of the Prospective Research Institute, in 2019, the market size of Guangzhou's garment industry was 104.362 billion yuan; but the overall scale of enterprises was small, and only 1.9% of textile and garment enterprises above the scale (revenue of more than 20 million yuan) were 1.9%.
Guangzhou textile and garment enterprises revenue of more than 20 million yuan enterprises accounted for low proportion (source: Prospective Research Institute)
Under the fierce competition, these small and medium-sized enterprises, especially the upstream fabrics, accessories enterprises and factories, the ex-factory price of many products is by default without social security, and the profit is weak.
A simple calculation of an account, before December 2021, the minimum wage standard in Guangzhou is 2100 yuan, if you pay five insurances, the company's burden is 956.57 yuan; a brand shirt 10 yuan processing fee, the workers' wages that do not include social security have gone to half, and they have to add rent and water; if you add social security, according to the current pricing model, you can't make a few dollars.
The designer's commission in the industry has been relatively high, to the brand side, a blockbuster version, the brand bought 1,000 pieces, the designer's commission of a piece of fifty cents, but you can not be sure whether the clothing you designed can become a hit.
Workers in garment factories are all piece-rate wages in the factory, piece-rate unit prices range from a few cents to a few cents, if you want to get a monthly salary of 7-8 thousand, the working hours must be about 15 hours.
Poor working environment and high work intensity in garment factories (Source: Liu Jingjing)
There is no guarantee, long-term high-intensity work, pressing the clothing practitioners breathless. Of course, this is not the only pressure, for practitioners, more difficult is yet to come.
02 Working for Internet celebrities is also very volume
"I am not afraid of Hangzhou comparing goods, I am afraid that Internet celebrities will come to find stubble"
The close contact between Liu Jingjing and the "Wei Yas" stemmed from an experience of finding a job last year.
Last year, she saw the information of "Guangzhou Wei Mi Kesi Clothing Co., Ltd." recruiting designers, which is a company owned by Wei Ya, and she learned that the company hired designers, a copy team, and went to the factory to make goods, and did not take goods with the market.
At this time, she realized that in addition to KOLs like Sydney and other vertical clothing, Wei Ya's comprehensive head KOLs also began to bypass brand owners and began to earn the most profitable design and sales of the smile curve, only outsourcing the processing with the lowest profit in the midstream.
In addition to Wei Ya, other comprehensive KOLs with goods have also quietly entered the game: Kuaishou Yige Xin Youzhi has invested in children's clothing companies "Start-up Shares" and "Dalian Yuanzhi Guanglong Trading Co., Ltd." with its affiliates before and after; cross-border anchor Luo Yonghaojian has access to clothing brands "Reloading", "Hangzhou Needle Threading" and "Hangzhou Rongsheng Xiangli".
Xinyuan Holdings shares in Dalian Yuanzhi Guanglong Trading Co., Ltd. (Source: Qichacha)
It is also because of this matter, Liu Jingjing is at a loss, in this industry, anyone may be a competitor, today there is Wei Ya, tomorrow there will be other KOLs, the future competition will only become more and more intense, standing firm is more important than anything.
After Liu Jingjing resigned from her first job, she jumped out to set up her own fashion design studio, and her daily work was to draw pictures and do design, negotiate suitable orders through clothing conferences, or in the form of friends' introductions.
Clothing conference is one of the forms to promote customer ordering (Source: Jingjing)
"Rolls are the norm, competition is great", is her most real idea after deeply cultivating this industry.
In order to be able to design explosive models continuously, the easiest way is to "borrow", make a style today, and tomorrow next door can come up with an exact same.
Most brand owners, will not feel that plagiarism is not good, they do not care what method the designer is through, as long as the finished product is good; for a company that has to go to hundreds of new models a day, time is money, and no one in the low-end brand has delved into which one to "borrow" in the end, as long as it can sell well, it is a good work.
Because of the default of customers and the industry, designers have a lot of open and dark battles, and at the same time, they have to invest more time every day to draw as many drawings as possible.
Therefore, "twisting" is Liu Jingjing's biggest feeling when doing design, on the one hand, she wants to design her own original works, but it takes time to do a complete original; on the other hand, she hopes to be able to produce the better as quickly as possible, so that the probability of creating a blockbuster is higher, and the more money can be sold.
In all aspects of the garment industry chain, the competition is very large.
Textile and garment processing industry chain (Source: China Commercial Industry Research Institute)
In addition to the clothing wholesale stores, upstream garment factories self-built production capacity needs funds, the investment of the plant has raised the entry threshold, and the entry threshold for other links in the garment industry chain is not high.
First, for the clothing design studio, there are not only designers like Liu Jingjing who come out on their own, but also the head KOLs who enter the game with live broadcasting, such as the aforementioned Weiya's studio.
Second, the clothing wholesale store is also facing the threat of Taobao Internet celebrities to cross the level to find factories, Liu Jingjing and the boss ladies of the thirteen lines are particularly familiar, talking about the competition of the thirteen lines, Jingjing said that "not afraid of Hangzhou goods comparison, afraid of Internet celebrities to find stubble."
Due to their different advantages, the different clothing wholesale markets in other cities in China do not pose too much of a threat to the Guangzhou wholesale market, and what really makes the bosses and ladies of the thirteen lines vigilant is the Internet celebrities of Taobao.
The threat posed by Taobao Internet celebrities is mainly the flexible industrial chain that has been sought after by the market in the past two years.
According to the previous cooperation model, these wholesale market bosses are a batch, Taobao Internet celebrities as a second batch to find a batch of goods, and then sell on Taobao, the market is orderly, in this mode, consumers in Taobao bought without waiting, basically shoot can be sent, because the second batch has inventory.
Now, more and more Internet celebrities adopt the "pre-sale" model, first go to the wholesale market to get the version, take photos on the shelves of Taobao after getting the version, the pre-sale period is 15/20 days, and the long reaches 45/90 days.
The pre-sale delivery period of this net red shop is 45 days, which is a very long period (Source: Taobao)
Internet celebrities use this delivery time, using the original version that was obtained in a batch, but bypassing a batch of factories directly to find factories to do goods, and the factories with strong strength can make a batch in about 7 days.
This is really hurtful for a group, the hard-earned version was quickly copied, but there was no time to grieve, and there was a category like peers passing on the news, avoiding the loss of more other people.
Internet celebrities, KOLs entered the game, the same industry competition of designers, not to advance or retreat, but to move forward, it is difficult.
03 The difficulty of expansion
"Profits are low, orders are difficult to sustain, and there is no warning before the closure."
Liu Jingjing's studio is opened in Haizhu, Guangzhou, first, because of the low rent of the house here, and second, because it is close to the medium and large cloth market, so that she can complete orders more efficiently. After getting the customer's needs, she began to design, changed to the customer satisfaction map and ran the large and small cloth market in Guangzhou, and the medium and large cloth market was the place where she went most often.
Liu Jingjing often runs to the large fabric market to select fabrics for customers (Source: Liu Jingjing)
Because the design list of domestic brands is fiercely competitive, she focuses on foreign trade orders.
This type of customer is difficult to nibble, because they have high demand for technology and quality, and there are not many batches, and many large studios are reluctant to do this kind of business, which just gives Liu Jingjing a breakthrough for entrepreneurs like Liu Jingjing.
"Foreign trade customers will do some tides, printing process is complex, accessories are picky, the factory is not willing to pick up, because the factories in Guangzhou are selective, in the peak season is the customer queuing up and waiting for production, the factory does not lack orders at all", so the complex model generally has to contact many factories, and there are factories willing to pick up.
A customer's demand for accessories must be determined by running back and forth many times (Source: Liu Jingjing)
What others are not willing to do, Jingjing did, but Liu Jingjing will not pick up the double-sided ni and down jacket of foreign trade. "Guangzhou's advantage is to make T-shirts, pants, women's clothing, down jackets, these are not advantages, few factories can do well, so we generally do not take such orders."
In the past few years of entrepreneurship, she has experienced the expansion of the studio from tens of square meters to hundreds of square meters, and has also experienced hundreds of square meters and returned to the bitterness of tens of square meters, "it is easy to feed a person, but it is difficult to support a team for a long time", when it comes to studio expansion, Jingjing is now more cautious.
"First, the order model of foreign trade after the epidemic is unstable, and there are too many studios that can't survive and go out of business", what Liu Jingjing wants to do is to seek stability first, because she has seen too many studios that are difficult to survive.
Next door to her office, there was a men's design studio of more than 100 square meters, and brands such as Carbine were its customers. At the end of 2020, the studio changed to a three-hundred-square-meter studio and relocated, but after a year, it may be that there was something wrong with an order, coupled with the high rent, and it closed in early March.
The second reason is that the profit level of the studio itself is not high.
"12%, not counting other water and electricity, rent and other expenses", when talking about each single profit, Jingjing said a highest gross profit margin. "If the customer's needs are simple, I will charge a little less, and if I am complex, I will charge a little more, even if I charge more, the gross profit will not exceed 12% at most."
Revenue cost composition of small OEM clothing design studio (Source: five rings outside the finishing)
With low profits and unstable orders after the epidemic, what should be used to expand?
04 How to get out of the predicament?
On the occasion of the Spring Festival, the New Year is a symbol of joy in the hearts of many people, but this is not the case in the eyes of clothing people.
At the end of the year, the thirteen lines and other wholesale markets, with very low prices to clear the warehouse, the Spring Festival is not open but also to bear the high rent; at the end of December every year, Liu Jingjing began to "passively" take a holiday, not that she did not take orders, but even if she took orders, the upstream factories were unwilling and did not have the capacity to do.
New China Mansion early spring festival holiday (source: Little Red Book user @ drinking and food Kayan)
For garment factories, before the year has passed, we are already worried about the recruitment problem in the coming year, because the turnover rate at the end of the year is very large.
The entrance of the garment industrial park is full of recruitment signs to make reserves for the next year (source: Deng Xuan'er)
Making clothing is a tedious and boring process, no matter which link, the people in the bureau who go to work face low salaries, no security, and the future of work pressure is slim; entrepreneurial clothing people face declining economic downturn demand, financial pressure, and want to break out of their own piece of the red sea step by step.
The entire garment industry in Guangzhou has also fallen into a vicious cycle of industrial upgrading, and the current garment processing and trade "cannot squeeze out high profits - can not give practitioners high wages and security - for the sustainability of orders are not willing to do more high-end clothing categories - follow-up profits have no room to rise - continue to lose personnel - continue to squeeze out high profits. ”
Whose dilemma is this?