Without it, there would be no ankle that I have today. /Visual China
Zhejiang has many legendary business stories, some of which come from the socks industry.
Cheng Xiaoyong, a native of Jiangxi, came to an apprenticeship at a chemical fiber materials factory in Zhuji City, Zhejiang Province after graduating from high school in 1999. After finishing his studies in 2010, he opened a sock manufacturing factory. He bought a house in the local area in less than 4 years after starting his business.
Zhejiang villager Zhao Fengguang borrowed 200 yuan to buy a hand-spinning machine in 1983. He lit a diesel lamp at home every night, and went to the roadside to sell socks during the day. Later, he accumulated millions of assets.
The legendary colors of these stories have put a mystery on Zhejiang's sock industry, especially Datang Street, Zhuji City, Zhejiang Province, a gathering place for the sock industry, which is a place with a registered population of only 77,000, and can produce 25 billion pairs of socks every year. Based on the world's population of 7.6 billion, it is equivalent to having 3 pairs of socks produced by Zhejiang Datang.
compares the production capacity of a region with the total world demand. It is not an exaggeration to this. According to the "Research on the Current Development Situation of China's Cotton Socks Market and Forecast Forecast Report (2022-2029)", the production capacity of Datang Street accounts for about 70% of the country and 30% of the world.
As of September 29, 2022, Zhejiang ranks first in the country in the number of sock companies. /Qichacha
The manufacturing process of socks is not complicated, and there is no industry moat. However, Zhejiang Datang can "take over" this business. What are the secrets behind it?
"Knitting socks as soon as possible"
Be famous as soon as possible, and so is entrepreneurship.
Guo Youchuan is well aware of this. He grew up in Haining City, northern Zhejiang Province. After studying in 1909, he opened a Zhenxing Sock Factory. In order to improve his competitiveness, he studied the operating principles of the "Butterfly Brand" sock weaving machine made in the UK, built a copy machine, and innovated the local weaving technology.
According to the description of "Haining Market Chronicle", his sock factory is "the first modern foreign sock weaving factory in East China". Its "Shuangshan Brand" socks are named after Haining City Dongshan and Xishan (also known as Ziweishan).
910, at the " Nanyang Quaternary Association " held in the official name for the first time in Chinese history, Shuangshan brand socks stood out among millions of exhibits and won the best prize, thus making them famous. Merchants who wholesale socks, customers who buy socks, and students who want to learn sock knitting techniques all think of Haining, Zhejiang Province at the first time. Datang Street (called Datang Town at the time) is 126 kilometers away from Haining City. The accumulated technology and talents of the latter have already tilted towards it early. Business is about "the trend", such as the trend of nylon stockings that residents of Datang Street caught up in 1969.
At that time, nylon stockings were popular all over the world with their advantages of easy washing, easy drying and good stretchability, replacing the C position of cotton thread socks. In China, cheongsam and nylon stockings are a set of fashionable formulas. Residents of Datang Street raised funds to buy more than ten sock knit machines and began to specialize in nylon stockings.
The machine used to knit socks at that time. / Zhuji Daily Video Team
It was Zhang Jincan who brought the second round of technological innovation to Zhejiang Socks Industry. He is a resident of Datang Street. He studied abroad in high school. After graduation, he returned to his hometown to work as a teacher. During this period, he taught himself the mathematics, physics and chemistry courses in college.
After the new knowledge is put into the head, the hands are itchy. In the 1970s, he observed that the No. 45 steel inside the sock knitting machine was not hard enough and the needle was often broken, so he experimentally replaced it with No. 60 steel and heat treatment to raise the local sock knitting efficiency to a new level.
According to " Zhejiang Daily ", at that time, you could earn 1 yuan for every pair of socks sold, and each residents could knit 50 pairs of socks a day and earn 50 yuan, which is equivalent to the monthly salary of most people in China.
Sock knitting is easy and money is quick, so in the mid-1980s, 70% of Datang Street residents invested in the sock industry. Their division of labor began to be refined, with some responsible for purchasing sock threads, some responsible for knitting socks, some responsible for hawking, and some responsible for repairing sock knitting machines. The prototype of "production, sales and logistics integration" appeared in Datang Street.
During this period, the small commodity market in Yiwu City, which is also in Zhejiang Province and is only 52 kilometers away from Datang Street, was already mature.Taking 1986 as an example, the total transaction volume of Yiwu products reached 100 million yuan. Buyers from all over the world flocked to Yiwu and gave birth to a local group specializing in consignment business - they sent trucks in two or three days to help buyers transport goods back to retail locations. Later, the Yiwu Municipal Government built Southern Lian and Northern Lian Bus Stations to standardize trunk logistics.
In that era when information dissemination was not yet developed and there was no online shopping, it opened up the market with transportation resources. Datang Street, which is close to the water, delivers the finished socks to Yiwu, and then reaches consumers across the country through Yiwu.
aggregation, diffusion
As practitioners and production capacity increase, Datang Street realized that everything needs to be organized and managed.
991, the first generation of Datang Light Textile Market was built. By the second year of operation, it had 397 raw material stalls and 1,515 finished product stalls, with an annual turnover of of 610 million yuan. In 2002, the third-generation Datang Light Textile Market opened, and the annual transaction volume quickly exceeded 10 billion yuan, which was more than ten times the annual transaction volume of the first-generation market. The second generation sock market opened in 1995. / Zhuji Daily
Business is like a magnetic field, the greater the development, the greater the suction force. As of 2014, the number of sock companies in Datang Street has exceeded 6,000, and the number of people employed has exceeded 100,000, and surrounding industries such as sock packaging, shaping, and making accessories have been derived. There are also foreign merchants who came to Datang Street together.
In 2000, the article "Da Tang: Small Socks Make Big Industry" published in Zhejiang Daily mentioned one thing: a foreign businessman placed a container sock order in Datang Street, South Korea, Mexico and China at the same time. Datang Street was the earliest delivery and only took half a month to produce it. The businessman was overjoyed and thought, this efficiency is worth working on! Since then, Datang Street has exported more than 1 billion pairs of socks to Japan, South Korea and Europe and the United States every year.
article also mentioned that some overseas companies, such as Japan's Maeda Fiber Co., Ltd., are also establishing cooperative relationships with Datang's sock companies, with the relevant amount reaching US$7 million.
Foreign merchants brought Tang Dynasty socks to the Pacific Ocean, across the Atlantic Ocean, and more places.
According to statistics from Yiwu Sock Industry Association, as early as 2008, the volume of sock products produced in China accounted for 42% of the global total sock consumption, making it the world's largest cotton sock exporter.
To this day, the export data is still increasing. According to the "Research on the Development Status of China's Cotton Socks Market and Investment Prospects Forecast Report (2022-2029)", the export volume in the first 11 months of 2021 has exceeded the export volume in the whole year of 2020. Among them, Zhejiang ranks first with an export volume of nearly 3.5 billion pairs, and this result is mostly due to Datang Socks .
Datang Socks City is like a world made of socks. /Xinhua News Agency
Looking at the business ecology, the changes in China's trading model have also brought some new things to the Tang Socks Industry.
The online platform focusing on wholesale trade that appeared in 1999 (now known as "1688"), and the Taobao , which was launched in 2003, changed the shopping thinking of Chinese people and broadened the sales channels of merchants.
channel, to put it simply, is the "way". Finding a way to sell goods is as important as ensuring production efficiency, product quality and transportation capacity. Several years after Taobao was established, the founder of Wahaha brand Zong Qinghou , and the founder of Nongfu Spring brand Zhong Shanshan repeatedly mentioned, "Supply chain brand, channel is king."
The Internet is that smooth channel, but merchants in Yiwu City can run faster. In 2010, Liucun, Qingyan, Yiwu City smelled the smell of e-commerce and spent 500,000 yuan to allocate the fastest fiber broadband at that time to each household, which attracted more than 20,000 e-commerce practitioners. In 2015, the annual sales of Qingyan Liucun reached 4.5 billion yuan, and it is known as the "No. 1 online store village in China". Yiwu City has also stood firm at the top of the "Top 100 E-commerce Counties in China".
E-commerce has opened up sales channels. /Visual China
As a neighbor of Yiwu, Datang Street stepped on the e-commerce bus earlier and shared logistics, talents, and technical resources with it.
A netizen who claims to be a sock wholesaler once wrote in his post: "Datang Socks City is a large building. Even if you are just walking around in a blink of an eye, you may not be able to complete a day. Opposite it is an open-air light textile raw material market, with more than 800 business rooms inside. The scale is too large, so you can only drive through it."
looks very prosperous.
Continue to break the deadlock
But everything has two sides, the bottleneck period for the Tang Dynasty and even Zhejiang sock industry is approaching.
socks have limited room for price increase. Even though the style of socks and slippers has been popular recently, in most people's concepts, socks are still close objects hidden in shoes. Comfortable and breathable are the hard truth, and the design sense is optional. This means that socks are difficult to create premiums on visual or cultural levels.
On the other hand, socks have less room for imagination in "black technology". At present, Datang Socks merchants have developed sock knitted materials with antibacterial and deodorizing functions. How can they innovate in the next step remains to be discussed.
socks, comfort is more important than good looking. /Visual China
This makes it difficult to expand the profit ratio of socks.
According to Interface News, Datang Socks Industry's output value in Q1 2019 was 4.1 billion yuan, and its profit was only 100 million yuan. The above-mentioned sock wholesale netizens also mentioned that the cheapest socks in Datang Socks Industry are priced at only 0.45 yuan for each pair. How many cents can you earn here?
Some sock companies have tried to lower costs.
Take cotton socks as an example. The expenditure on the main raw material cotton accounts for 50% of the total production cost. The fluctuations in cotton prices will have a direct impact on the profit margin of cotton socks. Since the beginning of this year, due to extreme weather such as heavy rains and droughts, the output of many major cotton producers and exporters such as Brazil has declined, and the cotton prices in the international market have risen by 30%, which means that the road to lowering the cost of sock raw materials is temporarily unfeasible.
. Earlier, some sock companies turned their attention to Southeast Asia, trying to reduce labor costs by hiring low labor. Liu Xunlin, the founder of Zhejiang Tairong Needle and Textile Group, said in an interview with " Sanlian Life Weekly " that he began to build factories in Cambodia and other areas in 2009, "but building a factory requires tens of millions of dollars, which is an astronomical figure for ordinary enterprises."
In addition, Datang sock companies also need to face their increasingly competitive peers.
Qichacha data shows that there are 106,000 sock-related enterprises in my country. Among the top 10 cities with sock-related enterprises, although Zhejiang has won 4 of the top 5 seats, Guangdong and Shenzhen have already reached the second place with 11,700; Jilin Liaoyuan City, Fujian Quanzhou City and Shandong Qingdao City, although ranked 6th, 7th and 9th, the number of 2,100, 1,700 and 1,400 companies is not much different from the fifth-ranked Taizhou City (2,800).
Jinhua City , Shaoxing City , Jiaxing City , Taizhou City , and Hangzhou City are all cities in Zhejiang. /Qichacha
has textile technology that has been precipitated in the early stage, the logistics power of Yiwu next door, and the channels for e-commerce stores. In addition, the aggregation effect that has been formed by itself, there is no doubt that Zhejiang Datang Socks Industry is the leader in the industry.
The topic facing Zhejiang Datang Socks Industry is how to continue to achieve innovation and break through while stabilizing its industry position. This road is not easy, but it will eventually be written in the long history that continues. The answer will eventually be clear.
Reference
[1] Go to the Chinese sock kingdom and do a "big business" worth 30 cents | Interface News
[2] How is this small town known as the "International Sock Capital" now? | Sanlian Life Weekly
[3] Examination, 40 years of Yiwu’s “supply chain change” | Titanium media
[4] 70% of the socks in your drawer are produced in this small town in Zhejiang
[5] The development of the Tang Dynasty sock industry socks innovation | Zhejiang News Network
[6] The first generation of Zhuji entrepreneurs, from one person to common prosperity | Zhejiang Daily
