Chinese garment exporter redefines “Made in China”

 

Dishang Cup China Fashion Design Show.

 

Dishang Cup China Fashion Design Show.

 

 

 

 

Chinese garment

exporter redefines

“Made in China”

 

 

 

When China’s first lady, Peng Liyuan, showed elegance and confidence

in wearing Exception earlier in 2013, the Chinese label became the most

sought after “Made-in-China” fashion brand overnight. However, true to

its name, it really was an exception as most Chinese brands are still the

second choice of consumers at home and abroad. While Dishang is a

name unknown outside the garment trade, but it is widely recognized as

one of China’s largest garment exporters by its rivals and customers for

its growth, service and expansion.

 

 

 

By Liu Wei  |  CHINA FEATURES

 

 

Zhu Lihua

CEO of Dishang

 

 

When China’s first lady, Peng Liyuan, showed elegance and confidence in wearing Exception earlier in 2013, the Chinese label became the most sought after “Made-in-China” fashion brand overnight.

However, true to its name, it really was an exception as most Chinese brands are still the second choice of consumers at home and abroad.

A survey by HD Trade Services Inc., a U.S.-based marketing and brand development company in 2012, found a third of 1,500 Americans would not buy a product if they knew it was a Chinese-owned brand.

It reflected a popular stigma of Chinese goods, which are commonly seen as low-quality, cheap and unsophisticated, although that perception is now being challenged, argues Zhu Lihua, CEO of Dishang Cherry, one of China’s largest garment exporters.

“Made-in-China apparel is actually increasingly accepted in many countries, the U.S. included,” says Zhu.

While Dishang is a name unknown outside the garment trade, it is widely recognized by its rivals and customers for its growth, service and expansion.

When the Chinese economy was still opening to private enterprise in 1993, Zhu took over the former state-owned Weihai Textile Group Import and Export Corporation in Shandong.

“It wasn’t an easy decision. When I started, Dishang was only an OEM (original equipment manufacturer). All the materials including the labels, the sewing threads and even small buttons came from abroad, and the added value all went into others’ pockets,” Zhu recalls.

With razor-thin margins, the garment exporters had no choice but to work for foreign brands.

“I always feared my company would go out of business as the exports dried up and if we failed to muster the courage to build our own brand.”

Clean-shaven and smartly dressed, Zhu, now 50, saw his fears realized with other exporters going bankrupt years later.

As the Chinese garment production chain matured and Dishang beefed up its research and design team in 1997, he made a bold decision – to make haute couture and shift from being an OEM to an ODM (original design manufacturer).

Zhu had started in the industry as a lackluster apprentice tailor, but founded a fashion empire with his foresight and management skills.

When the 2008 global financial crisis hit, he saw an opportunity to expand overseas markets at relatively little cost. Dishang cooperated with brands in the U.S., the UK, France, Japan and South Korea to establish sales and logistics networks.

Dishang set up its own design companies and offices in more than 10 countries and areas, including the U.S., the UK, Bangladesh and Hong Kong, leaping trade barriers and opening multiple sales channels.

While Chinese rivals now struggle with labor costs, Dishang has 49 wholly owned factories across China and Bangladesh and a staff of 12,000 producing 78 million garments a year, specializing in technical outerwear, sportswear, haute couture and woolen garments, casual outerwear and lifestyle products.

Its competitive production strength has drawn big name clients including Polo Ralph Lauren, Next, Uniqlo and Zara.

Since 2000, profit growth has never dipped below 20 percent, soaring to 80 percent in good years, while 2012 saw its exports value hit 800 million U.S. dollars for the first time.

In Zhu’s mind, success can be attributed to the strategy of creating Chinese brands.

“If we had not focused on spotting and cultivating talent and building up design teams to form our own brands, we would already be defeated by Southeast Asian counterparts in spite of our production costs,” he says.

He cites the example of Indigo Rein, Dishang’s first jeans brand, which saw sales in U.S. department stores of 31 million U.S. dollars in 2012.

“It’s not a big number considering our total sales each year, but it’s no easy job to win a reputation for a new brand. We still have a long way to go,” Zhu says.

Hou Junwei, a researcher at Beijing’s China Brand Research Institute, says creating an iconic brand is a subtle process. Companies typically spend years, or sometimes decades, trying to convince consumers that their product can give them satisfaction, so many firms start by licensing iconic brands and learning from them.

In recent years, Dishang has introduced French brand Feraud and U.S. brand Izod to China.

“Izod is a foreign brand, yet we instilled ‘Chinese style’ into it and localized it without changing its DNA,” says Gao Rong, general manager of Izod China.

As the exclusive agent of Izod in China, Dishang has built up a team of Chinese and Korean designers to create designer goods for Chinese consumers.

Izod headquarters was skeptical at first, but consumer approval won them around, says Gao.

“We certainly learned from Izod how to promote a brand globally.”

To create its own brand, Dishang invested 4.8 billion yuan to build the “Dishang Brand Mansion” in which all its labels will be displayed separately, providing a one-stop service for clients.

“Capitalizing on its design talent, Dishang expects to create its own haute couture brand to compete with the European luxury brands in the next three to five years,” says Zhu with an ambitious smile.

 

 

 

 

Dishang owns more than 20 garment production factories.

 

Dishang is the exclusive agent of French designer brand Feraud.

 

Izod store in Chongqing, southeast China. 

 

Dishang instills Chinese style into the American casual brand IZOD.

 

 

 

* All photos on this webpage provided by Dishang

 

 

 

 

 

BLOG EDITOR: MIAO HONG

 

 

 

 

 

 

 

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