China's entry into the World Trade Organization in 2001 and the abolition of restrictions under the Agreement on Textiles and Clothing in 2005 marked the end of an era for the apparel industry across developed economies. Manufacturers in those countries ceased almost all production activity in favor of low-cost sourcing from emerging countries, including China. By 2020, China had become the world's largest producer and exporter of textiles and apparel, with an export value of nearly $291 billion.

Nevertheless, with the onset of accelerated population aging, the demographic dividend China had previously enjoyed, referring to the rapidly growing young population, is beginning to decline. Moreover, as a result of rising labor costs, the country is losing its former comparative advantage.

Facing stiff competition, Chinese manufacturers are not sitting back. They are betting on innovation to revolutionize this sector. Subsequently, the garment manufacturing industry today has entered a new stage of development, one that aims to be intelligent, flexible and green.

Automated production

Anhui Huamao Group in Anqing, Anhui Province, principally engages in dyeing, processing, manufacturing and distributing textile products. Inside its huge spinning mill, automated machines are running at full speed and robots are transporting semi-finished products; there is hardly any human labor left, except for a few workers who supervise the production process on their electric scooters. A screen displays real-time information about quality, equipment operation and energy consumption.

"In the past, our factory was crowded. With deafening noise and absorbent cotton swirling everywhere and all the time, the air was stuffy," recalled General Manager Zhan Lingzhi, who has been engaged in the textile business for some 30 years. "Today, working conditions have improved a lot. Our employees enjoy a clean and comfortable environment."

The mill's intelligent monitoring platform enables online quality control and traceability of textiles. The automation of the production lines has reduced the number of workers needed to manufacture 10,000 spindles from 50 to 13. Productivity has increased by 30 to 50 percent. The modernization also saves up to 20 kWh of electricity consumption for the production of one ton of cotton yarn, leading to a reduction in the electricity bill of 600,000 yuan ($93,000) per year.

This transformation would be unimaginable without the company's years of research and development to address labor cost pressures.

Last year, it was one of the winners in the textile category of the Sixth China Grand Prix for Industry, which honors industrial enterprises and projects that serve as role models in entrepreneurship and independent innovation, according to Li Yizhong, President of the China Federation of Industrial Economics.

Improving flexibility

Traditional rigid production models based on the "make first, sell later" logic have long been the culprit behind excessive inventory accumulation. The needs of today's consumers, especially the younger generations, are constantly changing. Prices are no longer the first concern when shopping; it's the quality and design of a product that matters the most. Better inventory management in accordance with the rapid changes in demand remains a challenge.

In this context, the competitiveness of manufacturers lies in the continuous optimization of production processes and the development of new products. Some of them are betting on fast supply flows and flexibility.

Shandong Aspop Costumes Group is a good example. In 2016, it created a consumer-to-manufacturer platform where buyers can order custom-cut jeans. Once an order comes in, the company proceeds with the customization and cutting process via an AI system. While in the past, the manufacturer was content to produce two or three models per month, today an order can itself become a model.

Customized clothing has become Aspop's core business. This new fashion of operation has reduced lead times from one month down to seven days. Productivity has increased by 200 percent, and design costs and inventory have been reduced by 60 percent.

According to Ren Haoyuan, Executive Director of the group, this new, flexible industrial and marketing strategy is closely linked to the shifting demands of Chinese consumers.

Getting greener

According to the UN Environment Programme, the apparel industry is the second largest consumer of water—just after the oil industry—and generates between 8 and 10 percent of global carbon dioxide emissions. More and more citizens are demanding environment-friendly business practices and more responsible retailing. Chinese consumers, especially millennials, are no exception. A 2019 survey of 5,002 people in China showed that more than 67 percent of the respondents were sensitive to sustainable product criteria, and about 26 percent said they have taken action by making conscious purchases.

In parallel to this rising awareness of environmental protection on the consumer side, designers and business people alike are innovating in search of eco-responsible fashion and the revaluation of textiles.

According to a report released by the China Textile Industry Federation, recycled fiber production in China exceeded 7 million tons in 2018, with a textile recycling rate of 17 percent.

"This trend is irrevocable and indispensable to meet environmental and resource protection requirements," said Yan Yan, Director of the Social Responsibility Bureau under the federation.

Fake Natoo, a fashion brand from Shanghai, stands out as a model of green development in the sector. Its founder Zhang Na continually seeks to create sophisticated and avant-garde collections from recycled fabrics. The clothes she recovers are cut into patches and then assembled into new designs before being resold in her store. In addition, Zhang donates 10 percent of profits to the migrant women's cooperatives that collaborate on the design of the models.

"Used clothes have traces of life on them. I hope that bringing them back to life will encourage consumers to slow down their pace of life to better contemplate the present and the future," Zhang said. BR

(Print Edition Title: Intelligent Alterations)

Copyedited by Elsbeth van Paridon

Comments to yanwei@bjreview.com