Made in China in the live broadcast room | The digital transformation of the cashmere industry makes
Xinhuanet, Beijing, August 25th, Title: Made in China in the live broadcast room | Digital transformation of the cashmere industry makes the grassland "soft gold" shine
Xinhua News Agency reporter Chen Tingyu
The sky is vast, the wilderness is boundless, the wind blows the grass low and cattle and sheep can be seen.
Chifeng City, Inner Mongolia Autonomous Region, is located in the pastoral area of 41-45 degrees north latitude. It has a large temperature difference between winter and summer, and the winter is long and cold. It is known as the world's golden grassland belt and high-quality cashmere production belt. The high-quality cashmere product "Hanshan White Cashmere Goat" living here can only produce less than 1,000 tons of white cashmere each year, which is called the "soft gold" of the grassland by the industry.
70% of the world's cashmere raw materials come from China, 90% of cashmere sweaters and cashmere products are made in China, and many international cashmere clothing brands come from China.
However, over the past few decades, Chifeng's cashmere industry has been lingering in the raw material export and OEM links, and the "soft gold" can only be sold at a "bargain price" internationally.
Difficult brand road
"The biggest feature of cashmere is that it is fine, white and long. Its fineness determines its softness. The finest is below 14 microns. Cashmere is hollow and absorbs sweat better than cotton and wool. It will not shrink. No matter whether it is animal fiber, plant fiber or artificial fiber, it cannot compare with cashmere." Speaking of cashmere, Cheng Xudong, vice president of the Cashmere Branch of the Leading Enterprise Association of Inner Mongolia Autonomous Region and chairman of Chifeng Dongli Cashmere Group, knows it like the back of his hand.
Starting from cashmere export business, Cheng Xudong spent more than 20 years to build Chifeng Dongli Cashmere Co., Ltd. However, raw materials and technology alone are not enough. Many cashmere enterprises rely on external orders and OEM production, and rely on meager processing fees and export tax rebates to support their survival, lacking the motivation and guarantee for long-term development.
Although the vast majority of high-quality cashmere is produced in China, the domestic cashmere industry used to be mainly based on raw materials and processing on behalf of others. Technologically advanced companies were only at the downstream of the international industrial chain and lacked pricing power. Most of the profits in the cashmere industry were taken away by brand owners, and the cashmere industry was unable to obtain sufficient rights to set standards and profits from developing equipment and technology.
Dongli Cashmere also has the same pain points. Although it is one of the few national key leading enterprises in the agricultural and animal husbandry industrialization of the entire cashmere products industry chain in China and a provincial specialized and innovative small giant enterprise, Dongli Cashmere cannot get rid of the disadvantages of being a OEM factory in the industrial chain and lacks the ability and means to improve the industrial chain, improve production links and build brand awareness.
In fact, independent brands have always been a pain point for China's light industry. For a long time, Chinese products have been supplied to well-known foreign brands due to their low prices and stable quality. However, due to the lack of independent brands, many Chinese factories have almost no room for premium in negotiations, and their profits are meager. It is difficult for them to grow and develop, and they can only continuously reduce operating costs to maintain orders.
"Brand is the top of the pyramid. If we only do OEM and don't have our own brand, our cashmere industry will only stay at the bottom of the international industrial chain and fall into low-price competition for raw materials and labor. Only brand can go further." Cheng Xudong said.
Dream Live Room
In the eyes of the first generation of "cashmere people" like Cheng Xudong, branding has become an unattainable peak, but the second generation of "cashmere people" who grew up under the wave of the Internet want to find another way.
Cheng Xiaohu, son of Cheng Xudong and general manager of Chifeng Dongli Cashmere Group, believes that more innovative ideas are needed to face the industry's difficulties. However, due to the lack of understanding of domestic consumer preferences, Dongli Cashmere's branding path was not smooth at first.
"The process from cashmere breeding to finished garments is a long one, and it involves a very long capital chain. I simply cannot afford to open a physical store because it is a very expensive business," said father Cheng Xudong.
Cheng Xiaohu, introduced by a friend, thought of using short videos to spread the word. In December 2019, Dongli Cashmere entered the Douyin platform. When it first came into contact with Douyin, the two Douyin accounts operated by Dongli Cashmere, @东黎现金绒 and @虎哥现金绒, had more than 480,000 followers. A user criticized mercilessly in the live broadcast room, "Although your quality is good, the design is too old-fashioned and the raw materials are wasted!" Faced with such direct feedback from consumers, Dongli Cashmere immediately hired international designers to try to launch younger styles.
"Tik Tok allows us to understand customer needs more quickly. Consumers will post their favorite styles and colors in groups and live broadcast rooms, allowing us to re-understand the market," said Cheng Xiaohu.
Through Douyin e-commerce's short videos, live broadcasts and interest recommendation mechanisms, Cheng Xiaohu feels that this time he has seized the opportunity to build a brand, understand consumer needs and achieve digital transformation and upgrading.
Cheng Xiaohu said that Dongli Cashmere, through the Douyin e-commerce "Ace Factory" project, connected with "influencers" and short video operation teams, and worked out content dissemination points that consumers are interested in, such as "OEM factory labels" and "cashmere knowledge explanations", before it really opened its eyes and stepped into the art of live streaming sales, and traffic quickly improved.
Introducing the cashmere production process through interest e-commerce has also made more people interested in cashmere. Dongli Cashmere has recorded many "realistic and rewarding" product short videos: "revealing" how a cashmere sweater goes from raising sheep to "plucking wool" spinning, and then to the whole process of ready-made clothes; how to identify the quality of cashmere products, how to maintain the cashmere fabric that is "delicate" in the eyes of ordinary people... These contents are very popular. In 2021, the Douyin fans of the Dongli Cashmere brand account increased from 5,000 to 110,000. Since joining the Ace Factory project team in December 2019, Dongli Cashmere has sold more than 40,000 pieces in 2021 through influencers, celebrities, and self-broadcasting, with an online GMV of more than 70 million yuan. During the Double 11 period in 2021, sales increased by 300% year-on-year, and sales during the Cashmere Festival increased fivefold. In 2022, Dongli Cashmere's kid series sold well on Douyin, with online sales of all products approaching 100 million yuan throughout the year.
"The e-commerce platform has fulfilled my dream of creating a brand. I originally thought that it would take several generations to build up a brand, but I didn't expect that we would create our own brand in just three years in the live streaming room," said Cheng Xudong.
"Small order, fast response" flexible manufacturing
In addition to Interest e-commerce, Dongli Cashmere has also achieved "flexible manufacturing" for part of its production capacity through the "small order quick response" production model of Douyin e-commerce.
Cheng Xiaohu said, "According to traditional cashmere production, customers come to make samples in December each year, production starts in March and April of the following year, delivery starts in May and June, and shipment to consumers starts in July and August. It takes about two months to produce a batch of goods. Now, through the Douyin e-commerce platform, we can reach consumers and provide feedback to the manufacturing process. Flexible production and quick response to small orders have shortened the production cycle of a batch of goods to about two weeks or 15 days, thereby reducing production costs and improving production efficiency and profit margins. We quickly reorder products that sell well, greatly reducing inventory."
Due to the growth in sales and profits as well as demand feedback, Dongli Cashmere built a new digital factory, increased its R&D investment, and successfully developed new types of cashmere and double-sided printing textile technology.
The development of Douyin e-commerce has boosted the performance growth of all links in the Dongli cashmere industry. According to Dongli Cashmere data, upstream, the pasture of the rare cashmere breeding base has increased to 644,000 acres, with 200,000 goats and 100 tons of cashmere purchased, which has increased the income of nearly 1,000 herders in the cooperative and promoted the development of local industries; in the midstream, through research and development, work efficiency has been improved, production utilization has been increased, workers' labor skills have been improved, and the working environment has been improved; downstream, express delivery business and auxiliary material packaging manufacturers have seen significant growth in production. It is reported that Dongli Cashmere has its own cashmere goat breeding research institute, with a breeding scale of 2,000 basic breeding sheep, and 23 experts in breeding, farming, nutrition, mating, medical care, and epidemic prevention.
"Expensive, heavy in style, and difficult to care for" are no longer the stereotypes that young consumers have about cashmere products. Through full-scene displays of live broadcasts and short videos, cashmere traceability and other activities, Dongli Cashmere showcases the latest technological achievements and design concepts of the domestic cashmere industry, builds consumer confidence in domestic cashmere, shortens the path for cashmere products to reach consumers, and promotes the innovative development of the domestic cashmere industry.
According to data from the Douyin platform, there are nearly 700 cashmere merchants with annual sales of more than 10,000 pieces on Douyin e-commerce in 2022. In the first half of 2023, the sales of cashmere merchants on Douyin e-commerce increased by 45.71% year-on-year.
From the export of extensive raw materials to the OEM production, the first step of the industry leap, the Inner Mongolia cashmere industry has gone through nearly half a century. Riding the wave of digital technology and intelligent manufacturing, from OEM to private brands, the path of China's cashmere industry's leap forward has become clearer.
