How to dig deep into the US market when consumption is recovering?

Although the US retail industry is still under pressure, since April, US consumer power has hit a new high this year. Some economists say that the growth of consumer purchasing power means that the US market has recovered.

Signs of recovery in the US market are not difficult to get from the China Textile and Apparel Trade Show (New York) and New York International Apparel Sourcing USA, Hometextiles Sourcing and Texworld USA. Find clues in the scale of exhibitors at the show (hereafter referred to as the "New York Show"). In July of this year, the New York show will return to the Javits Convention Center with the largest number of exhibitors in history. The product selection and theme of the exhibitors also released a signal that textiles are returning to the United States as a highly automated and environmentally friendly industry.

Various data show that the prospects of the US textile and apparel industry in the second quarter are clear. For the Chinese pavilion in China, which is about to go to the New York show, it has high hopes for the US market. In July of this year, 32 garment and home textile enterprises will land in the New York exhibition in the form of “Suzhou Famous Theme Exhibition Zone” to show overseas customers the quality products covering apparel, home textiles and accessories.

Supply chain manager from China

The recovery of the US textile industry is a worry for Chinese suppliers of industry and trade. China used to be the country with the lowest cost in the textile industry in the world. However, the rapid increase in the number of middle-class families and the sustained economic development have led to an increase in the production costs of American textile companies in China. Under Trump's new policy, Sino-US trade prospects are even more confusing, with expert analysis, policy changes and US tariffs are making brand companies consider transferring production lines back to the United States.

“Although Trump encourages 'Made in America', the opportunity is two-way, and Chinese companies can boldly go out, both domestic and foreign markets.” Ye Minxia, ​​Sales Director of Jiangsu Jinmeilai Co., Ltd. said that the average annual business For the US market, exporting home textile products such as carpets amounted to 20 million US dollars. It is a long-term partner of large and medium-sized supermarkets such as Wal-Mart and Costco. In the past two years, sales figures have basically kept rising.

Jinmeilai is a typical Chinese supplier of industry and trade. “In the past, we have had more cooperation with traders. This time we hope to reach more customers.” Ye Minxia said that directly understanding the needs of buyers is the most important purpose of participating in the exhibition. In recent years, Chinese factories have continued to extend both at the front end of the design and at the back end of the process, and their service capabilities have been greatly enhanced. On this basis, face-to-face communication with buyers can improve profit margins on the one hand, and promote communication of details such as process, design, and delivery time on the other hand, making “not feasible” feasible.

From the customer's sample order, to the factory's independent research and development to guide customers, after years of precipitation accumulation, Ye Minxia believes that the Chinese supplier's process innovation capability is not the same as before, but also benefit from the perfect supply chain and manufacturing enterprise of China's textile and garment industry. The advantages in information collection such as fabrics and design trends are evident, and most export-oriented manufacturing companies have established specialized trading teams to provide customized services to overseas customers. China's foreign trade export companies are actively transforming their industry's integration and value-added services capabilities through R&D and design, and transforming them into outstanding supply chain managers.

When the Amazon broke out, who can laugh at the end?

At the New Manufacturing, New Retail, New Ecology 2017 Technology Innovation Summit (Shanghai) in April this year, Edward Gribbin, president of Alvanon, a US apparel strategy consultancy, said that in the past three years, the traffic of American malls has dropped by 57%. Amazon may become the largest clothing retailer in the US by June this year. The structural disruption of the industry forces every American brand to think about it, either joining Amazon or being eliminated by Amazon.

Digitalization and e-commerce are the most important opportunities for retail industry change. The Chinese factory, which once stood behind the scenes, is now entering the American business world with a new brand image and e-commerce strength. Two years ago, Suzhou Taihu Snow Silk Co., Ltd. broke into the Amazon platform and directly operated and sold independent home textile brands to US consumers. Sales increased year by year. Pan Ganlan, the company's cross-border e-commerce director, said that in the future, companies will use the United States as the main market to promote brand awareness through this exhibition in New York.

“American consumers are no strangers to silk products. For example, silk pillowcases and other products that sell for around $20 are widely available, while silk kits for high-end consumers over the age of 35 are more popular than silk.” Pan Ganlan said In addition to grasping the differences between Chinese and American consumption habits, Chinese sellers also need to adapt to Amazon's highly stringent operational regulations.

"It is this kind of rigor that allows the branded merchants to grow healthily." Pan Ganlan believes that Amazon is a good development platform for Chinese factories. Most of the US domestic sellers do not have factories, and their supply chain control ability is poor. These are precisely the ace advantages of Chinese suppliers. "In the future, I am still optimistic about the US market. With the changes in consumer consumption in the United States and the industry's emphasis on e-commerce, market space will be further released."

Consumption upgrades drive demand for silk products

Whether in the United States or China, the retailing of both markets is in the tide of consumption upgrades and e-commerce transformation, each seeking a way out. Xu Ting, general manager of Suzhou Embroidery Silk Co., Ltd. believes that silk category is part of the consumption upgrade. From a long-term perspective, the protection of local companies in the United States will accelerate consumption. A survey report has shown that in the use of fabrics by international luxury brands, the amount of silk is much greater than that of chemical fiber.

"In the future, we will build a brand based on the Chinese market, and we hope that overseas development is based on our customers' understanding of our brand." For example, for this New York show, the company will exhibit an Italian luxury brand CHLOE. The Song Jin handbags jointly developed by the former jewelry director, and three of the 16 garments specially designed for the 2016 APEC conference. Xu Ting admits that unlike OEMs, he values ​​the cooperation with mid- to high-end overseas brands and channel partners. “I hope to find partners who are pursuing the value of silk products and high quality to develop and innovate together.”

At present, technology, innovation, consumers and even global politics are changing the way the whole industry thinks. In the face of the European and American markets, competition between China and ASEAN countries, especially Vietnam, remains fierce. Following the pace of consumption upgrades and e-commerce transformation, Chinese textile and apparel companies are trying to use the two advantages of rapid response and brand culture to stimulate the US market. Will the Suzhou pavilion, which is going to the US to participate in the exhibition, harvest the geometry? Let us pay close attention.

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