By Jason
Subler and Zhou
Xin
DACHEN, China (Reuters) - Like prodigal sons,
China's exporters are returning home to sell their
products as global economic gloom takes a toll on
their overseas orders.
Yet exporters of goods ranging from apparel to
electronics are hardly finding a fatted calf laid
out for them.
Despite a track record in manufacturing products
to global standards for leading brands, many are
finding it tough to tap into China's domestic market
due to cut-throat competition, lack of local brand
names and poor domestic distribution networks.
Zhejiang Berkam Garment Co, a clothing company
that has long manufactured shirts for Western brands
such as Italy's Benetton, recently launched a
domestic line of men's shirts under the label "Brioso."
"We did a tour of the U.S. and Europe last
year and saw how bad the situation there really was,
so that made us determined to focus more on the home
market," said Chen Jianguo, the company's vice
chairman.
"We'd been thinking of doing so for some
time, but that gave us the final push to decide to
launch our own brand," he said in a spacious
conference room in the factory, located in Dachen, a
major center for shirt makers in eastern Zhejiang
province.
Berkam plans only a gradual shift away from
manufacturing shirts for Western brands, as an
abrupt shift in the firm's business model would be
too risky.
Still, the company hopes that demand for its
local shirt line will soon start to make up for the
drop in export orders caused by the global slowdown.
It aims to sell at least 1 million shirts with
the Brioso logo this year via contracted agents, or
roughly 10 percent of its current annual output,
Chen said.
"It's an ambitious target because we've
missed the spring and summer sales season, so we'll
have to hope for the best in the autumn and winter
season," he said.
Firms such as Berkam can expect plenty of
company, said Paul French, chief China analyst with
retail consultancy Access Asia in Shanghai.
"It's classic China. Everyone will do it,
and all of a sudden there will be more shirt shops
than you can shake a stick at. But you won't have
heard of any of them and the only people who sell
shirts will still be people who've got the
brand," French said.
The main routes for clothing companies to break
out of the pack will be to go through the laborious
and expensive process of building their own brands
or buying existing ones, he said.
Many are likely to drop out of the race, as they
are not ready or able to put up the investment
needed to do so.
"I think at the moment it's a kind of panic
strategy," French said. "I'm not quite
sure, from the ones I've talked to, that they quite
understand what that will involve." Continued...
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