Fashion has been changing massively, as low-cost manufacturing moved from China to other countries, and the fashion brand focus on value, more than on cheap production, tells Shanghai-based retail expert Ben Cavender in Just-Style. And the transition process in fashion brands will continue to cause pain, as robots move in.
Just-Style:
Last year, China's government launched its 'Made in China 2025' programme, aimed at advancing restructuring of the manufacturing sector, upgrading China from a manufacturer of quantity to one of quality, and investing in high-tech sectors and projects like advanced robotics.
"One thing China is good at doing is making plans for the future," Cavender says. "The whole point of the 2025 programme is 'how do we become the Industry 4.0 leader?' What we're seeing now is massive investment in Chinese start-up companies that are trying to build more efficient robots, building smart factories, looking at big data and analytics, and using it in ways that are effective in the workplace. A Chinese company is right now trying to buy the largest robotics manufacturer in Germany."
But for all this investment and development, Cavender points out that "tens of thousands" of Chinese manufacturers will go out of business due to the inefficiency of their factories. They are also only just starting to fully realise the value of protecting their intellectual property (IP).
He adds: "Chinese companies know they need to spend on research and development, and they are spending but still at a relatively low level. The apparel sector [spend] is still less than 1% of revenue. They are also not terribly efficient with how they use their findings. They don't know how to work their supply chain or processes very well.
"They know there is this need for responsive, faster design, but the reality is nobody knows how to collect data and use it properly. So there is still an opportunity here that if you can do that well and take the time to find the partners that know how to do that, you've already got a leg up on the competition."
The key to companies capitalising on these weaknesses over the next 15 years, Cavender says, is to be flexible, and invest now.
"If you're not trying things with automation and robotics now then it's going to be too late. You have to be willing to change and try new things. The biggest reason why the Chinese apparel industry stays healthy is that they're willing to try new things, they're always experimenting."
He also points to the importance of analysing data from customers, and subsequently building an identity of the customer and knowing what they want. "It's not really truly about technology at the end of the day, it's about teamwork, working together and finding ways to avoid brain drain. You need to find a way to keep those people and get the best out of them.More in Just-Style.
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