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Doing Business with China’s Largest Garment Clothing Industry and the 5 Tips Entrepreneurs Must Know

Hours before the first H&M outlet opened at Kuala Lumpur this September, a queue of about 1,500 people had already formed outside Lot 10 in Bukit Bintang. The Swedish retail giant had created fashion frenzy in Kuala Lumpur. I am always impressed by how fashion retailers captured the heart of consumers through a series of branding and marketing.  The trick for fashion brands is how to keep the core edgy and hot – as we witness in Abercrombie & Fitch and Victoria’s Secret.  But how many of us are well acknowledged of the rules of thumbs in the fashion or apparel industry? 

When H&M was opening at the shopping district of KL, I was away at Hong Kong and China for an International Industrial Attachment with 9 selected USM business students and senior marketing lecturer Mr. Shahidan, visiting Crystal Group which is the top 5 garment player in the world with 40,000 employees in 11 factories across 9 countries, generating more than $1 billion revenue annually.

Its global customer base includes yes you name it – H&M, Levi’s, A&F, Mango, Victoria’s Secret, UNIQLO, M&S, Ann Taylor, GAP and many more.

I was very lucky to visit all different production lines of Crystal Group in 4 factories namely Elegance Ind. Co. Limited (T-Shirt), Crystal Apparel Limited (Jeans), Crystal Martin Limited (Intimates) and Crystal Sweater Limited (Sweater) which are located in the world’s manufacturing hub at Dongguan, Zhongshan at the province of Guangdong.

We were briefed by more than 20 top managers during the 5-days company visit and learnt tremendous amount of knowledge in garment industry as well the philosophy of Crystal Group.

It is not easy to be in manufacturing industry nowadays. Crystal Group definitely sets an exemplary benchmark in this industry. There are five take-away from the industrial attachment which I would like to share with you:-

1.      China is no longer a low cost manufacturing base – it’s transforming.

To my surprise, a newly hired labor in Crystal Group can easily earn up to RMB 2,500 (higher than the minimum wage set by Malaysian’s government). The entire economic structure of China has shifted from labor intensive towards capital intensive – and hence the way of doing business in China has to be changed, too.

2.      Innovation is the only way to stay in the game.

Garment industry is a huge and rewarding industry. It accounts a market of around $800 billion and will reach $1500 billion in 2015 with big players such as China, Bangladesh and Vietnam.

Crystal Group has always emphasized and invested in shortening the production time, lowering the cost and creating products with better quality.

For instance, the Levi’s jean that you are wearing was designed using advanced laser machine. It took just 2 minutes to finish the jean’s design as compared to 3 hours of sandblasting.

3.      Deliver. Deliver. Deliver.

Crystal Group works with top 20% customers which generate 80% of sales. They are able to deliver value added products (VAPs) by upholding to the main values which turn out to be their competitive advantage – speed to win, product research and development, competitive cost, efficient capacity, excellent quality and eco green production line.

Stay focused and keep shipping.

4.      You can have a real green company.

Crystal Group has an impressive green and sustainable policy – and they are the limited few who actually walk the talk. 100% of industrial water in Crystal Group is treated, 80% of it is reused and another 20% is discharged way cleaner than the national standard. They have fully applied the 4 key ways (avoid, reduce, recycle and proper disposal) to achieve zero waste and zero landfill.

Their sustainable effort has been recognized and awarded Gold Label in WWF Low Carbon Manufacturing Program, Hong Kong Guangdong Cleaner Production Partner and Green Enterprise Award.

5.      To be the last one standing, you need to have the best talents.

Crystal Group was started as a family business and has evolved into a multi-national enterprise over the years. They understand that in order to stay as the industry leader for the coming decades, attracting and retaining talents are the only way.

This is why they invest in the right employees and put them at the right position and at the right time.

Many perceive garment industry as a sunset industry – I did as well.

However after this International Industrial Attachment to Crystal Group, I truly believe that garment industry has a chance to improve the lives of humankind. The future is bright with the advancement of nanotechnology.

It reminds me of the famous phrase by Steve Jobs to the former CEO of Pepsi at Central Park in New York –“Do you want to work in a company which produces sugar water or a company which can change the world”?  Yes, in garment industry, you stand a chance to change the world.