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The changing face of China
For some sports brands, the changing face of China has caused problems in the supply chain. David Pittman spoke to those entrenched in the Far East, and those not, to find out what’s going on.
The UK Trade & Investment (UKTI) China Business Guide (Third Edition) describes China as ‘the great economic success story of the last 30 years’, and sports brands have been chief among those looking to take advantage of low material and labour costs, among other benefits.
Many have facilities in China, including bespoke teamwear specialist Samurai Sportswear which has more than 200 staff working exclusively on its products. Similarly, dart brand Target has its own factory, equipped with its own machines and staff.
Some don’t even own their own factories. Shoe brand Hi-Tec, for instance, uses two licensed manufacturing facilities in China, supported by 110 backroom staff. Products from the factories are shipped to over 70 countries worldwide.
But as the global economy realigns, circumstances have changed and those with a stronghold in China have started to experience pains that are affecting the supply chain, right through to the retailer. Workforce management has been one of the core issues to strike the supply chain in recent times.
Richard Evans, sales director at mouthguard brand Opro, says he has heard of spiralling staff costs as China becomes more affluent and employees demand better terms of employment, a situation which Hi-Tec chairman Frank van Wezel says has both negative and positive impacts. He says many factories have been set-up along China’s coast, with workers trafficked from inland China, paid relatively well and returning more affluent.
Says van Wezel: “The Chinese Government recognised this trend and decided they needed to develop inland China. They stopped trains bringing workers to the coast, and have been advising brands to set-up factories inland instead.”
This led to problems in the manufacture of goods at the turn of last year, resulting in stock shortages and order backlogs that affected both the brands and retailers.
For more, see the January 2011 edition of SGB Sports, p6.
