China Insight: China’s Textile Industry — From Big to Strong
The textile industry in China is the largest in the world in overall production, exports and retail, with an output of 58 million tons a year in the fiber categories alone, accounting for more than 50 percent of the world’s total; with textile and garment exports of $316 billion, accounting for more than a third of global shipments, and a retail scale of more than $672 billion, with online retailing of about $298.9 billion.
Behind these figures is China’s massive textile industry supply. Its success is based on a solid foundation and ongoing innovation, developing new technologies and green strategies, understanding global and local industry trends, and extensive investment in R&D, consumer-oriented personalization and flexible production.
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China has ranked as the world’s largest manufacturer for 11 consecutive years since 2010 and is the only country playing a major role in all industrial categories. According to data from the Chinese Academy of Engineering, five of China’s 26 manufacturing industries are at the world’s most advanced level, with the textile industry helping to lead the way
Take Shenzhou International Group Holdings Limited, for example, which operates the world’s largest garment processing facilities, producing about 2 million pieces of ready-made garments a day in its factories in China’s Anhui and Zhejiang provinces and is factories in Southeast Asian countries, making the company a key OEM producer for major sportswear brands globally.
Also located in China’s Zhejiang Province, the Keqiao District in Shaoxing City is the world’s largest textile industry hub with nearly a quarter of the world’s textile products traded here. Last year’s on- and offline turnover reached about $44.8 billion. And Keqiao is just one of China’s many textile industry clusters — in Shandong province, Yaojiapo Village close to Tai’an City orders more than 300 tons of fabric every day to make about 160,000 pairs of long johns.
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As Sun Huaibin, vice president and spokesman of the China National Textile and Apparel Council, put it, “No other country in the world has such a rich, systematic and complete textile industry chain as ours, with upstream raw material supply including petrochemicals and agriculture, and segmented divisions in each textile chain.”
From cotton to fiber, from weaving and dyeing to garment production, a piece of garment undergoes hundreds of processes before it reaches the consumer.
So even today, the textile industry is a typical labor-intensive industry. China, as the world’s largest producer of cotton, has a thousand-year history of textile production and has been providing the world with a constant supply of cheap and qualitative clothing thanks to its demographic characteristics, a strong labor force and the opportunities created by reform and opening-up policies in the late ’70s, and especially China’s entry into the World Trade Organization in 2001. But today the industry is also facing challenges, with increasing costs for labor and raw materials and mounting environmental pressure.
So what is the industry’s strategy to stay ahead of the game?
Digital empowerment
In the textile industry, the “number of workers per 10,000 spindles” has been an indicator of the number of employees needed in a spinning mill. More than 30 years ago, the standards were 1,000 in a spinning mill and 10,000 in fabric manufacturing. Today, with modern information technology, big data analysis, and modern management tools, only 35 workers are needed per 10,000 spindles.
Digital transformation and upgrading not only greatly improved labor production efficiency in intelligent factories. In the warehouse of Bosideng, an intelligent scheduling system can locate a garment within three minutes in a warehouse of 1.5 million boxes of clothes, automatically attach a courier slip and transfer it to the transport vehicle. The throughput of the warehouse can reach up to one million pieces in a single day, with handling, sorting, distribution, counting and inventory all done by robots. The national sales data on the Bosideng’s big data platform is refreshed every six seconds delivering real-time market trend analysis. Through the digitalization of warehouses and logistics, Bosideng’s inventory turnaround time is 175 days shorter than that of its down apparel peers, for example Canada Goose’s 396 days and Moncler’s 278 days.
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In order to keep up with global competition and meet the increasing demand for personalization, Bosideng has opened up flexible channels for two-way interaction between production and sales through digitalization, to be able to accurately target consumer demand and provide precise marketing services, all measures that helped to grow its brand value. Internal optimization and management improvement at all levels of purchasing, production, inventory and sales are all achieved through digital innovation in the entire supply chain. This has connected all aspects of the supply chain, opened up the front-end sales, middle-end inventory and back-end production outsourcing processes to respond to market demand in the shortest possible time.
Differentiation through R&D
With China’s economic development shifting from high-speed growth to high-quality development, the textile industry is also undergoing tremendous change.
“With such a huge volume, it is not possible for China’s textile industry to accelerate its growth. Therefore, the current path that should be taken is to transform and upgrade, from being big to being strong,” according to Sun Huaibin.
Widely used in high-grade clothing, home textile fabrics, high-performance filtration materials, clean materials, high-end automotive interiors and other areas, ultra-fine fibers have become a key component in the development of the industry. Synthetic fibers are playing strategic importance. According to Li Lingshen, vice president of the China National Textile & Apparel Council and director of the Chinatesta Textile Testing & Certification Service, “China’s production of synthetic fibers accounts for more than 70 percent of the world’s production. With such a high proportion and wide application, they have become vital for the sustainable development of the entire textile industry and the safety and control of the supply chain.”
The annual output of Shenghong Group’s microfiber products accounted for about 60 percent of the world total even before its listing in the Fortune 500. According to Miao Hangen, chairman of Shenghong Group, “a large part of our success comes from being able to produce something that others can’t. The sales are better when the added value of the products is higher. This year, the production capacity of recycled fiber will reach 350,000 tons, double that of last year, and demand keeps growing even faster with orders for some products even lined up until the fourth quarter.”
Shenghong has invested nearly $15 billion over the past 10 years to open up the upstream and downstream industrial chain of synthetic fibers. It maintains an average annual growth rate of more than 10 percent in the number of new technology products and also leads the establishment of a national innovation center for advanced functional fibers.
One of its inventions, the “sea-island ultra-fine fiber,” is only 1/100th of a hair in diameter with an internal distribution of 2,664 monofilaments. The length of only 112 grams of the fiber can be equal to that of the Earth’s equator.
In addition to microfibers, recycled fibers made from recycled plastic bottles has become the company’s main R&D focus and source of profit growth. It can produce one ton of recycled polycool fiber from 50,000 recycled PET bottles. Shenghong’s annual output of 350,000 tons of recycled fiber means that about 17.5 billion recycled PET bottles can be handled in a year, which is equivalent to a reduction of about 6 million tons of carbon monoxide emissions.
Consumer-centered personalization and flexible production
According to Chen Dapeng, vice president of the China National Textile & Apparel Council and president of the China National Garment Association, “The entire retail scale of China’s garment market is estimated to exceed $672 billion, with online retail accounting for more than half.” On the one hand, demands in such a huge market are varied and diversified; on the other hand, the continuous growth of online retail requires new models in the textile and clothing industry.
How to meet the diverse and personalized needs of an increasingly wealthy consumer? Longsheng Fashion, a company that started out as a designer and manufacturer of green leather garments, is a key supplier of leather garments to the European and American markets, with an annual output of over 1.1 million OEM leather orders. The company has pioneered in intelligent production and a one-person-one-version model for customized clothing, from remote measuring. Most orders come from online, where consumers can simply take photos as required to identify key data from multiple angles such as waist line, to the selection of fabrics online and to the engagement in style design.
The same personalization that is possible in d-to-c is possible in B2B. In today’s garment factories, each cut piece is equipped with a different chip and the assembly line can also be customized on a large scale. While meeting consumers’ diverse needs, this personalization and flexible production has given rise to a large number of niche brands, creating an opportunity for China’s textile and apparel industry.
Meanwhile, at the retail end, the popularity of livestreaming e-commerce, which has become especially popular during the COVID-19 pandemic, is also changing the traditional model of the apparel industry from design to production and from distribution to retail.
“These new developments in digitization, networking, informatization and intelligence provide the possibility for large-scale personalization. And the core of livestreaming e-commerce is to shorten the distance between the producer and the consumer, and to provide the consumer with the optimal product in the shortest possible time,” according to Chen Dapeng.
Editor’s Note: China Insight is a monthly column from WWD’s sister publication WWD China looking at key developments in the key Chinese market.
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