Transformation of apparel manufacturers to meet the need of a changing time

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China's entry into the WTO in 2001 and the abolition of restrictions under the Agreement on Textiles and Clothing in 2005 marked the end of an era for the apparel industry in the developed economies. Manufacturers in those countries shut down almost all production activities in favor of low-cost sourcing from emerging countries, including China. By 2020, China was the world's largest producer and exporter of textiles and apparel, with an export value of nearly $291 billion.

But with the onset of accelerated population aging, the demographic dividend that China had previously enjoyed, which refers to the rapidly growing young population, is beginning to decline. As a result of rising labor costs, the country is losing its former comparative advantage.

Faced with stiff competition, Chinese manufacturers are not sitting back. They are betting on innovation to revolutionize this sector. The garment manufacturing has entered a new stage of development, one that aims to be intelligent, flexible and green.

Automated production 

Anhui Huamao Group in Anqing, Anhui Province, is principally engaged in the dyeing, processing, manufacturing and distribution of textile products. In its huge spinning mill, automated machines are running at full speed; robots are transporting semi-finished products; and there is hardly any human labor left, except for a few workers who supervise the production process on their electric scooters. A screen displays real-time information about quality, equipment operation and energy consumption.

"In the past, our factory was crowded. With deafening noise and absorbent cotton swirling everywhere and all the time, the air was a bit stuffy," recalled General Manager Zhan Lingzhi, who has been engaged in the textile business for some 30 years. "Today, the working conditions have improved a lot. Our employees can enjoy a clean and comfortable environment."

The mill's intelligent monitoring platform enables online quality control and traceability of textiles. The automation of the production lines has reduced the number of workers needed to manufacture 10,000 spindles from 50 to 13. Productivity has been increased by 30 to 50 percent. The modernization also saves up to 20 kWh of electricity consumption for the production of one ton of cotton yarn, leading to a reduction in the electricity bill of 600,000 yuan ($917,40) per year.

This transformation would be unimaginable without the company's years of research and development to address labor cost pressures. Last year, it was one of the only winners in the textile category of the Sixth China Grand Prix for Industry, which "honors industrial enterprises and projects that act as role models in entrepreneurship and independent innovation," according to Li Yizhong, President of the China Federation of Industrial Economics.

Improving flexibility 

Traditional rigid production models based on the "make first, sell later" logic have long been blamed for excessive inventory accumulation. The needs of today's consumers, especially the younger generations, are constantly changing. Prices are no longer the first reason for shopping; it's the quality and design of a product that matter the most. Better inventory management in accordance with the rapid changes in demand remains a challenge.

In this context, the competitiveness of manufacturers lies in the continuous optimization of production processes and the development of new products. Some of them are betting on fast supply flows and flexibility.

Shandong Aspop Costumes Group is a good example. In 2016, it created a consumer-to-manufacturer platform where buyers can order custom jeans. Once an order is placed, the company proceeds with the customization and cutting via an automated AI system. While in the past, the manufacturer was content to make two or three models per month, today an order can itself become a model.

Customized clothing has become Aspop's core business. This new way of operation has reduced lead times from one month to seven days. Productivity has increased by 200 percent, and design costs and inventory have been reduced by 60 percent.

According to Ren Haoyuan, Executive Director of the group, this new, flexible industrial and marketing strategy is closely linked to the changing demands of Chinese consumers.

Getting greener 

According to the UN Environment Program, the apparel industry is the second largest consumer of water - just after the oil industry - and generates between 8 and 10 percent of global carbon emissions. More and more citizens are demanding environment-friendly business practices and more responsible retailing. Chinese consumers, especially Generation Y, are no exception. A survey of 5,002 people in China in 2019 showed that more than 67 percent of the respondents are sensitive to sustainable product criteria, and about 26 percent said they have taken action by making conscious purchases.

In parallel to this rising awareness of environmental protection on the consumer side, designers and business people are innovating in search of eco-responsible fashion and the revaluation of textiles.

Fake Natoo, a fashion brand from Shanghai, stands out as a model of green development in the sector. Zhang Na, its founder, seeks to create a sophisticated and avant-garde collection from recycled fabrics. The clothes she recovers are cut into patches and assembled into new designs before being resold in her store. Ten percent of the profits are donated to the migrant women's cooperatives that collaborate on the design of the models.

"Used clothes have traces of life on them. I hope that bringing them back to life will encourage consumers to slow down their pace of life to better contemplate the present and the future," Zhang explained.

According to a report released by the China Textile Industry Federation, recycled fiber production in China exceeded 7 million tons in 2018, with a textile recycling rate of 17 percent.

"But this trend is irrevocable and indispensable to meet environmental and resource protection requirements," said Yan Yan, Director of the Social Responsibility Bureau under the federation.

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