Grasping the policy dividend: the apparel industry transition ushered in the policy window period

Since the beginning of this year, the central government has intensively issued guidance documents for various industrial policies to promote China's economic transformation and upgrading. This has provided a greater market space and development direction for the development of the apparel industry. It can be said that the apparel industry is facing an unprecedented period of policy dividends. At the same time, it also poses higher challenges and requirements for the transformation and upgrading of the apparel industry.

“New Consumption” Policy Guidance: Space for Transformation and Upgrading of Garment Industry

The State Council issued the "Guidelines for Actively Giving Play to the Role of New Consumption, Accelerating the Cultivation of New Supply New Motive Forces" (referred to as the "Guiding Opinion"), and fully deploying consumer upgrades to guide industrial upgrading, with institutional innovation, technological innovation, and product innovation adding new Supply meets the creation of new consumption and creates new impetus.

The "Guiding Opinions" pointed out that new consumption, which is mainly pursuing the upgrading of traditional consumption and the emergence of new and emerging consumer goods, especially the rapid development of key areas such as service consumption, information consumption, green consumption, fashion consumption, quality consumption and rural consumption, will To lead the rapid growth of investment in related industries, infrastructure, and public services, and to expand new space for future development.

For the apparel industry, the Guiding Opinion clearly states that the new consumption mainly includes six key consumer contents such as service consumption, information consumption, green consumption, fashion consumption, quality consumption, and rural consumption, among which fashion consumption is directly related to the apparel industry. The industry will have more “big fashion” and “big consumption” in the process of transformation and upgrading. The quality of consumption and service consumption, apart from their specific content, is essentially a guideline that prompts garment companies to provide higher-quality and more personalized products at the manufacturing end, and to provide even higher levels of service and experience at the sales end. . The “new consumption” content provides a general direction for the transformation and upgrading of the apparel industry.

Specific content, the "Guidance Opinion" pointed out that "as the imitation of the basic end of the consumption phase of the type of consumption, personalized and diversified consumption has gradually become the mainstream, especially the younger generation prefers to reflect the personality characteristics of fashion brand goods and services, will Promote the accelerated development of industries related to consumer experience, personalized design, and flexible manufacturing.” This is the main content of “fashion consumption”. It is mentioned here that the imitative-type row-spending-type consumption phase has basically come to an end, which means that the extensive development mode of large-scale manufacturing, homogenized production, and push-pull distribution in the clothing industry has passed. It can be expected that personalized customization, smart manufacturing and flexible production in the apparel industry will become the norm in the future. Many apparel companies have already explored and tried in this regard.

Regarding “quality consumption”, the “Guiding Opinions” pointed out that as the income level of residents continues to increase, the majority of consumers, especially middle-income groups, have put forward higher requirements for the quality of consumption, and are more safe and practical, more comfortable and beautiful, and more tasteful. The potential for the development of branded goods is huge. This kind of consumption involves almost all traditional consumer goods and services, which will drive the upgrading and upgrading of traditional industries and product upgrading. The opinions clearly emphasize that the majority of consumers, especially the middle-income group, will be the main force of future quality consumption. This corresponds to the “crossing middle-income trap” mentioned by the central government and is also a major market space for the transformation and upgrading of the garment industry as a traditional industry.

Regarding “consumption of services”, the “Guiding Opinion” pointed out that with the improvement of the material living standards, education, health, old-age care, culture, tourism, etc., services that meet the needs of the people for improving their quality of life, and that are conducive to the accumulation of human capital and enhanced social creativity Consumption has grown rapidly. For the apparel industry, these service consumption areas are the key areas for diversified transformation of garment enterprises. Garment companies have entered the fields of education, health, pensions, culture, tourism, etc., and the trend is more and more obvious. This trend has prompted the garment industry to further expand to a larger space.

“New Economy” Policy Frequently Occurs: Increased Transformation and Upgrade of Apparel Industry

Since the beginning of this year, in the context of China’s economic development entering a new normal and entering a period of medium-to-high-speed growth, the central government has issued a number of industrial policy guidelines to tap China’s economic growth potential and promote China’s economic restructuring and transformation. These industrial policies also provide more paths and options for the transformation and upgrading of the garment industry.

One obvious area is the new economic shape of the Internet. The latest news is that the Ministry of Industry and Information Technology is developing a three-year "Internet +" short-term implementation plan. The plan focuses on the deployment of eight major action plans such as smart manufacturing pilots, intelligent manufacturing system solution capabilities, information infrastructure, and new business development. The goal is to establish and improve an ecosystem based on “Internet + manufacturing”. This is a specific implementation plan for the "Internet Plus" guidance document issued by the State Council in July.

In the "Guidance Opinions", eleven major actions such as internet + entrepreneurship innovation, collaborative manufacturing, inclusive finance, and e-commerce were introduced in detail. Taking the Internet + e-commerce as an example, the guidance proposes to encourage enterprises in the energy, chemical, steel, electronics, textile, and pharmaceutical industries to actively use the e-commerce platform to optimize the procurement and distribution system and improve the efficiency of business operations. Promote the online transformation of various professional markets, guide the integration of resources between traditional trade circulation companies and e-commerce companies, and actively transition to collaborative platforms for supply chains. Encourage enterprises to use new channels such as mobile social media and new media to develop new modes of online marketing such as social e-commerce and “fan” economy. Since the beginning of this year, apparel companies have seen multiple cases of online and offline integration, the development of O2O models, and the increase in the number of industry capital+Internet platforms. Under the influence of policies, more and more actions have been taken by apparel companies and the Internet+, and this may result in the future. More clothing companies and Internet + combined mode.

In addition, in the service-oriented economic and industrial fields such as sports, culture, tourism, and cross-border e-commerce, the state has also significantly increased its policy release. At the end of last year, the State Council issued the "Some Opinions on Accelerating the Development of the Sports Industry and Promoting the Consumption of Sports," and proposed to build a sports market with a scale of RMB 5 trillion by 2025. In this year’s “Government Work Report,” Premier Li Keqiang proposed that “the development of national fitness, competitive sports, and sports industries” will raise the sports industry to the level of mass sports and competitive sports. Policy guidelines have prompted the apparel industry capital to increase investment in the sports industry, or establish sports industry mergers and acquisitions fund, or share sports related companies, or mergers and acquisitions of sports enterprises, or start strategic cooperation with sports companies. With the further release of the sports industry market space, there are more clothing companies entering the sports industry “Nuggets”.

In terms of cross-border e-commerce, the State Council successively issued the “Opinions on Efforts to Develop E-commerce to Accelerate the Cultivation of New Economic Drivers” and “Several Opinions on Accelerating the Development of New Competitive Advantages in Foreign Trade” during the year to accelerate the development of cross-border e-commerce business; In the fifth plan, the central government proposed that “the construction of a public cultural service system is basically completed; the cultural industry has become a pillar industry of the national economy and the influence of Chinese culture has continued to expand”, emphasizing the realization of a cultural industry as a pillar industry of the national economy during the “13th Five-Year Plan” period. In August this year, the State Council issued "Several Opinions on Further Promoting Tourism Investment and Consumption" to promote the development of the tourism industry. These industries that have ushered in favorable policies have already entered the apparel industry capital. With the further advancement of the country’s economic reforms and economic restructuring, it is expected that the country will further publish more “new economic” industrial policies, which will have greater attraction to the capital of the apparel industry and will also promote the transformation and upgrading of garment enterprises. With more choices in direction, the differentiation of industry development models will be more obvious.

Observation: Behind the policy dividend, garment companies face higher challenges and requirements

Recently, the "supply-side reform" has become a hot word. The central government proposes to appropriately expand the total demand and at the same time strengthen the supply-side structural reforms. What is supply-side reform? In simple terms, we must not always focus on the demand side, but must think more about the supply side, improve efficiency, tap potential, and create more effective demand from the supply side. In turn, the implication is that there are still many problems at the supply end, which are manifested in excess production capacity, high costs, and the production factor output efficiency needs to be improved.

These problems also exist in the apparel industry. The high inventory and homogeneity problems associated with overcapacity, the excessively high costs of production and business models, and the greater resistance of apparel companies in terms of brand power, all require the transformation of the apparel industry. Solved during the upgrade. In general, the intensive release of new consumption and new economic policies is a concrete manifestation of the "supply-side reform" requirement. In the transformation and upgrading process, garment companies are faced with an unprecedented policy dividend, but it also means that garment companies are faced with greater challenges and higher requirements. Only in this way can they truly seize the development opportunities provided by policy dividends and achieve real results. , high-quality transformation and upgrading.