Digital transformation of cashmere enterprises: from foundries to domestic brands

In the Hanshan area of Chifeng City, Inner Mongolia, the water and grass are abundant, the winter is long and cold, and the unique climate environment makes the local specialty white cashmere goat famous, and many manufacturers come here to look for high-quality cashmere raw materials. Cheng Xudong, from the cashmere export business, with more than 20 years to build a well-known cashmere textile enterprise - Chifeng Dongli Cashmere Co., LTD. (hereinafter referred to as "Dongli Cashmere").

As the chairman of the board, Cheng Xudong holds high-quality raw materials and technology, and is not willing to do OEM business for brand enterprises. He draws on the development experience of famous enterprises, takes the e-commerce platform of Tiktok as the fulcrum, builds the brand, and leads the factory to the road of digital transformation.

"Foreign trade alone can not become a century-old enterprise"

Inner Mongolia cashmere has the characteristics of "fine long white", which is very popular with foreign brand enterprises. In recent years, Cheng Xudong's business scope has gradually expanded, by 2013, Dongli Cashmere Company has a complete production chain of cashmere products, become a supplier of many international brand enterprises.

What makes Cheng Xudong very unconvinced and hopeful is that today, 70% of the world's cashmere raw materials come from China, 90% of cashmere sweaters and cashmere products are made in China, and the quality and technology of Chinese cashmere are actually hidden behind many international brands of cashmere clothing.

"The quality of cashmere in China is the top in the world, and there is not much room for development if we keep doing foreign trade processing." Cheng Xudong felt the hidden worries of the foundry: "The annual shipments and profits are subject to others." Domestic labor gradually increased in price, and many low-end wool processing has gradually shifted to Southeast Asia and even Africa."

After Cheng Xudong realized the ceiling of the foundry, he decisively opened a physical store of the "Dongli Cashmere" brand in the local area, and opened physical stores in other areas of Inner Mongolia. But the road to brand building has not been as smooth as expected.

Cheng Xudong analyzed the reasons why the brand was blocked at that time, on the one hand, the high unit price of cashmere textiles made enterprises have to target business groups, and the airport stores and high-end shopping malls serving such people have expensive store costs and too long goods turnover cycle. On the other hand, businesses are landlocked and have limited knowledge of how to shape a brand.

Grab consumers with short videos that "tell the truth and have a sense of gain.

However, this is also an opportunity! At the end of 2019, Cheng Xudong opened a brand account of "Dongli Cashmere" on the short video platform, and at first, he put several corporate promotional videos on it.

Until Tiktok e-commerce organized the "ace factory" project to help the foundries of foreign brands of clothing and bags directly connect with consumers, and screened out a group of factories with excellent technology and quality. After his factory participated in the "ace factory" training, he learned to make short videos and live content, and gradually found the way to seize consumers.

Online, the consumer base is broader and younger, and more focused on product quality. Cheng Xudong let the staff record many short videos of products that "tell the truth and have a sense of gain" : "reveal" how a cashmere sweater is the whole process from raising sheep to "collecting wool" spinning, and then to the garment; How to distinguish the quality of cashmere products, how to maintain the "delicate" cashmere fabric in the eyes of ordinary people...

Liu Jiamin of the enterprise e-commerce group recalled that I did not expect these contents to be so popular, and after officially starting to do content in 2021, the fans of the brand account Tiktok rose from 5,000 to 110,000. After they start to try to bring goods live, there are fans who will interact and say what style they want or want a special plus size. In 2021 alone, Dongli Cashmere sold more than 40,000 pieces of cashmere clothing on the short video platform.

↑ Dongli Cashmere brand broadcast room

"Driving the digital transformation of Factories"

With high-quality brand content and the amount of fans, Cheng Xudong did not expect to encounter other problems, that is, "too fast."

"The rhythm of e-commerce is much faster than the processing business before." To do the foundry business, a brand may place an order in December this year, pick up the wool, spin, organize the production and then transport to there, the brand can be put on the shelves in September next year, and the fastest production cycle will be about 60 days. However, platform e-commerce requires the use of small order fast anti-model, at the beginning, in order to keep up with the pace, we set aside a separate production workshop and transformed into a flexible supply line, reducing the production cycle to 15 days."

↑ Dongli cashmere workshop set up a special production line for Tiktok e-commerce

After the initial run-in, Cheng Xudong gradually felt the benefits of "digital transformation".

In the past, the production cycle was long, and the version inspection link of a piece of clothing was drawn with cardboard and hung in front of the worker. Now in order to catch up with the speed of the order uploaded back by the platform, Dongli Cashmere has added an RFID tag system, each piece of clothing has an identity tag from the beginning of production, the original cardboard has been changed into an electronic screen, the workers on the production line scan the tag code of the clothes, the screen shows the version and style that need to be made.

Flexible manufacturing requires the flexible organization of production according to market feedback, and the factory has introduced an order data analysis system to analyze popular colors, fabrics, styles, and set aside the corresponding fabrics and production lines in advance. "Domestic clothing manufacturing enterprises are most afraid of inventory pressure, production backlog in the warehouse, will seriously affect profits and cash flow." The anti-pattern alleviates the inventory problem to a great extent."”

In the past, we did OEM business, and the delivery cost was 50,000 pieces, and the logistics process was simple. In the face of individual consumers from all over the country, the introduction of an automated warehousing and logistics system, according to the order data of the platform's e-commerce background, automatic positioning of goods, automatic ordering and delivery.

If the beginning of the digital transformation, Cheng Xudong was pushed to go, behind is Cheng Xudong pushed the transformation of the factory. Due to the improvement of the profit margin of private brands, the payback cycle of e-commerce is fast, and the funds for reinvestment to expand production and research and development are more abundant.

The transformation starts from the design process. Compared with the heavy and gorgeous style of the original British designers in the factory, the feedback on the e-commerce platform is that domestic consumers prefer soft and close-fitting design. Dongli Cashmere introduces new designers to change the design style, and records and analyzes the suggestions and order preferences of consumers in real time.

Flexible supply requires a stable supply of raw materials, and Dongli Cashmere has expanded its organic ranch and a team of more than 20 experts in Chifeng City, and invited more herders to join the breeding cooperative. In the purchase of herdsmen's cashmere, the qualified cashmere subsidy of 20 yuan per kilogram, calculated with 300 goats per herdsmen, each goat produces 1 kilogram of cashmere, and the herdsmen in the cooperative earn an annual increase of 6,000 yuan per household.

↑ Dongli Cashmere buys cashmere from local herdsmen

This year, Cheng Xudong plans to build a customer service center to specifically undertake the washing and care business of consumers on the Tiktok e-commerce, "the workload should not be small, but through the background management of the order data, I am more confident."

Source: Xinhua News Agency