[Industrial Cluster] Qingdao Reshapes The Textile And Clothing Value Chain

Qingdao textile, the "mother industry" that has accompanied the city for 120 years, is rewriting the stereotype of low added value, high energy consumption and labor-intensive "traditional industry" that people have long formed.

Traditional industries are not equal to backward industries, just as "new momentum" is not equal to "emerging industries". Made in Qingdao is driven by the development of both emerging industries and traditional industries.

The butterfly transformation of Qingdao's textile and clothing can be called a model.

Needless to say, the rising factor costs and the rapid development of other countries are reconstructing the industrial pattern of textile and clothing. More importantly, the global low-carbon and green development trend has brought strong external constraints to the industry, which has built green trade barriers for exports while pushing up the cost of enterprise transformation.

The new competitive situation requires new countermeasures. Take the initiative to go out, rearrange the industrial chain and supply chain, and form a new deep industrial nesting relationship with emerging regions such as Southeast Asia. Returning to the industry itself, focusing on the value chain, and constantly accelerating the upgrade to intelligence, high-end leap, and fashion are the internal logic firmly anchored by Qingdao's textile and clothing industry.

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Upgrade "New Weaving"

In recent days, the construction site of the digital intelligent spinning factory located in Jimo District Jifa Longshan Industrial Park has been busy, and technical workers have been busy assembling production lines. This is a 100000 yarn spinning project invested by Jifa Group with an investment of 600 million yuan, which mainly produces high-quality yarns of more than 100 feet, with an annual production capacity of 10000 tons after being put into production. After this intelligent factory is put into production, it will apply big data, artificial intelligence, 5G and other information technologies in the whole production process, and its intelligence level will step into the world's advanced ranks of the industry. It is planned to officially put into production in July this year.

The construction of intelligent spinning factory is a microcosm of Jifa Group's accelerating digital transformation. "Comprehensively consolidate the digital foundation of all links, continue to improve the level of digitalization, networking and intelligence of enterprises, and accelerate the transformation from the traditional manufacturing mode to the new mode of demand driven, flexible manufacturing and supply chain coordination." This is the main goal of Jifa Group to launch the "digital transformation" action this year. As one of the main enterprises of Qingdao textile and clothing industry chain, Jifa Group's construction of "digital base" will play a key role in driving the development of the upstream and downstream of the industry chain.

In recent years, the labor cost has been rising, while the number of young people on the assembly line has become less and less. The textile and clothing industry takes "people" as its core competitiveness, and the operating pressure has increased sharply. In addition to the high recruitment cost, the fragmented and personalized demand transmission of the downstream consumer end requires enterprises in the upstream fabric research and development, fabric circulation, clothing manufacturing and other links of the industrial chain to meet the market rhythm of small orders and rapid reaction, which also brings shock to the traditional large-scale production mode of the industry. "Digital transformation is about the future of enterprise development."

The textile and clothing industry chain is composed of cotton - spinning - weaving - printing and dyeing - fabric circulation - clothing manufacturing - clothing brand operation and retail. Digital transformation is the antidote to promote enterprises to "go to the next level" by moving up the industrial chain and toward the high-end of the value chain.

In the opinion of Yang Weidong, secretary of the Party Committee and chairman of Jifa Group, the "digital transformation" action of Jifa is the integration of equipment automation, data informatization and production standardization. With scenario application as the starting point, the project construction of intelligent interconnected factory, digital workshop and automated production line is orderly promoted, Accelerate the formation of the "five modernizations parallel" pattern of "equipment digitalization, design (process) informatization, information integration, user interaction, and manufacturing intelligence", and gradually build a new industrial production and service system with all elements and the whole industrial chain closely connected.

As one of the main enterprises in the industry chain, Kute Intelligent focuses on enabling the C2M industry Internet platform. At the "Spring/Summer 2023 New Product Launch" held by Kute Intelligent, it announced that it will actively build a "Kute C2M Industrial Internet Platform" as a laboratory carrier this year. Build a data brain centered on the pattern database, style database, process database, BOM database, etc., truly realize the large-scale personalized customization of "one person, one version, one garment, one first-class piece, and delivery within 7 working days", and solve the bottleneck of traditional clothing inventory and the pain point of traditional personalized customization that is costly and cannot be mass produced.

From the perspective of the value of digital transformation, the first is to improve the production efficiency of the factory. Through technology, the production experience of "Shifu" will be transformed into a standardized process, which enables more new workers to complete production activities accurately and efficiently in a short time and improve the overall quality of products; The second is to improve the management level of enterprises. Digital technology can connect the information of all production links, which can greatly reduce the response resistance between all links, and then improve the business ability of enterprises.

In response to these problems, Caoshhai Weaving Cloud Platform has created a low-cost, lightweight SaaS based clothing cloud intelligent manufacturing system. More "new weaving" scenarios are being accelerated in small and medium-sized textile and clothing enterprises.

Taking Qingdao Ruihua Group as an example, relying on the integrated software and hardware solution of Haizhiyun, Ruihua has completed the transformation of an intelligent factory and has the flexible production capacity to undertake multiple varieties and small batch orders. At the same time, Haizhiyun, together with Ruihua and other ecological parties, has built a supply chain platform to get through the industrial chain data of manufacturers, brand manufacturers and surface and auxiliary material manufacturers, effectively reducing the costs of all links and achieving rapid collaboration.

At present, Haizhi Cloud Platform has enabled more than 2500 enterprises to complete the transformation and upgrading of mass customization. In Qingdao, the platform has carried out in-depth cooperation with many textile and clothing enterprises, such as Ruihua, Globegroup and Lehao, to help enterprises achieve their own digital and intelligent upgrading.

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Layout "new market"

Industrial transfer is an unavoidable topic in the textile and clothing industry.

Many powerful export-oriented textile and garment enterprises have begun to implement foreign industry transfer, shifting part of their production capacity from China to Southeast Asia, in order to continue to benefit from diversified supply chains, industrial chains and broader external markets. In particular, the effective implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) has brought great opportunities for Qingdao's textile and clothing industry to move towards the middle and high end of the value chain.

Before the RCEP came into effect, Qingdao Guihua Knitting Co., Ltd., in order to reduce production costs and enjoy the tariff preference granted by Japan to ASEAN member countries, invested in the construction of knitting garment processing plants in Vietnam and other Southeast Asian countries, and the products were mainly sold to the markets of Japan and other RCEP member countries. Although the domestic parent company mainly produces knitted fabrics, in order to enjoy the tariff preference granted by Japan to Vietnamese original knitted garments, the company can only purchase production fabrics from local Vietnam, which affects the smoothness of the supply chain between domestic companies and overseas factories.

"At present, the Chinese origin fabrics used by Vietnamese processing plants can be regarded as the ingredients of the contracting parties. The knitted garments we use domestic home-made fabrics to process meet the requirements of the rules of origin in the RCEP agreement, and can continue to enjoy zero tariff treatment in Japan with the RCEP certificate of origin issued by Vietnam." Li Yuqin, head of the business department of Qingdao Guihua Knitting Co., Ltd., said, This can not only improve the company's overall profits, but also stabilize the textile, printing and dyeing and other industrial chains in China and extend the industrial value chain.

It is estimated that thanks to the tariff concession policy brought by RCEP, the company's annual export fabric production capacity to ASEAN has reached 65 million yuan due to the adjustment of the industrial chain supply chain, and has driven the development of other upstream and downstream industries.

In fact, the textile and clothing industry is the leading industry and key field of RCEP regional cooperation. At present, RCEP region has become the most important textile and clothing manufacturing center in the world, covering many important textile and clothing consumer markets in the world. By sharing the information of overseas investment projects with the commerce department, Qingdao Customs has preliminarily selected about 10 Qingdao textile and clothing enterprises that have invested in ASEAN projects, such as Jifa and Canaanite, as the focus, to provide precise policy guidance to enterprises, and help enterprises to lengthen the industrial chain, optimize the supply chain, and extend the value-added chain. It is estimated that only after these enterprises make full use of the RCEP rules of origin, they can increase the export business of knitted fabrics by nearly 200 million yuan every year.

More opportunities for the layout of industrial globalization lie in the "Belt and Road". In the recent year, Wu Junjie, the general manager of Shengfei Integrated Industrial Park in China, has visited textile and clothing enterprises in Qingdao for many times, and introduced Benin Grogby Industrial Park, which is involved in the operation and management of export-oriented textile and clothing enterprises in Qingdao.

In the view of insiders, the transfer of textile and clothing industry is the general trend. In a sense, this confirms that China is gradually transforming from a regional emerging economy into a global power capable of influencing the world economic pattern and development trend in many fields and at a higher level. In this process, the role of industrial enterprises is also constantly adjusting - from capacity providers to exporters, from beneficiaries to contributors. The factor resources released by industrial transfer will promote the domestic industrial layout of enterprises to move towards the direction of intensive, high-tech and high added value.

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Advanced "new fashion"

It is time to take a new look at Qingdao's textile and clothing industry.

The rise of live broadcast e-commerce and the rapid improvement of logistics system have shortened the time gap of "what you see is what you get" to the minimum. While the live broadcast e-commerce industry is booming, China is also experiencing consumption upgrading. Consumers' demand is becoming more personalized and diversified, which means more diversified product supply.

In the industry, more and more fashion factors are being activated.

On March 17, 2023 China International Convention and Exhibition Industry Innovation and Development Conference was held in Shanghai. At the conference, the Oriental Fashion Season · 2022 Qingdao Fashion Week was awarded the "Gold Award of 2022 China Brand Exhibition", which was the first time that Qingdao Fashion Week won the gold award of national brand exhibition.

Qingdao Fashion Week has been held for 22 consecutive times. More than 3000 well-known designers from more than 60 countries and regions around the world and China have entered the show, and more than 700 new clothing brands have appeared here. It has cultivated a large number of outstanding fashion design talents, including three of the top ten local Chinese designers, and has become a fashion card of Qingdao, It has become a vivid footnote of the "butterfly change" in Qingdao's textile and clothing industry.

Driven by the influence of this annual fashion feast, more and more fashion seeds are emerging in Qingdao. Textile Valley, Oriental Fashion Center, Shishanghui, Zhongfang Garment City... A number of fashion creative industrial parks have emerged and accelerated their growth, bringing together a large number of designers, online celebrities and professional buyers.

In Qingdao, the "fashion style" of the traditional industry of textile and clothing is becoming more and more strong, and the brand's original power is growing and bursting, showing a more magnificent, vigorous and fresh vitality. At the 2022 China Fashion Growth Brand Release Conference, the "Ben Ivan bbfer" brand of Qingdao Ben Ivan Clothing Co., Ltd., the "Hicher" brand of Qingdao Jimeiyu Clothing Co., Ltd., the "Yingyuan" brand of Qingdao Universal Clothing Co., Ltd., and the "Oudu" brand of Qingdao Haoer Clothing Co., Ltd The "Lehao" brand of Qingdao Lehao Garments Co., Ltd. won the honor of China's growing brand of clothing.

More new forces of fashion brands are standing on the digital "new outlet" of live broadcast e-commerce consumer services.

In Jimo District, relying on the largest clothing wholesale market in Jiangbei, the surrounding area of Jimo clothing market has become an e-commerce cluster. There are at least 5000 physical stores "online" in the area, and more than 2000 large-scale live broadcast businesses. An e-commerce industry chain integrating online stores and production has been formed around the area, and many entrepreneurs have been attracted.

Break the boundary and integrate innovation. Qingdao's textile and clothing industry has been transformed from simple processing and manufacturing links, embracing the global market, and is on the way to fashion and creative industries.