Septwolves founder: China's industrial chain advantage supports local brands
Editor's note: This report focuses on Quanzhou as part of our special series, "Rising Star Cities," about Chinese cities whose annual GDP exceeds 1 trillion yuan ($155 billion). At the end of 2021, there were 24 such cities. Click here for more stories on Quanzhou, an ancient trading hub known for its cultural diversity. You can also explore our earlier coverage of Ningbo,Changshaand Chongqing.
When Zhou Shaoxiong started his menswear business in 1990 in Quanzhou, a port city in south China's Fujian Province, a generation of young entrepreneurs were eager to catch the opportunities offered by China's reform and opening-up, which started first in southern coastal areas.
More than three decades later, Zhou's Fujian Septwolves Industry Co., Ltd., a garment company he founded with six other co-founders, has grown into a leading menswear brand in China with a revenue of about 3.5 billion yuan ($520 million) in 2021.
In one of Septwolves' factories in Quanzhou, CGTN talked with Zhou, who shared his thoughts on the challenges and opportunities faced by the garment sector in China.
Industrial chain collaboration
Official data showed that by October of 2021, Quanzhou was home to 109 listed companies, many of which are in the manufacturing sector.
Zhou said the manufacturing sector faced challenges recently, but China still has a unique advantage in industrial chain collaboration.
Alongside the overall development of society, labor costs will certainly rise, and therefore, people will have higher standards regarding the factory environment and benefits, he said.
Those changes will increase the cost of production and lead to some foreign brands relocating their manufacturing to other places, such as Southeast Asia.
However, industrial transfer is a developing trend of international specialization. After decades of reform and opening-up, China has built a complete system of industrial chain collaboration, especially for the fashion industry, according to Zhou.
"This is an obvious advantage. Moreover, it cannot be rebuilt in a short time in other countries and places," Zhou said, noting local brands will stick to the domestic production system for more skilled, efficient workers and lower logistics costs.
Opportunities amid pressure
The garment industry is highly competitive and constantly changing. However, Zhou said, "the need is always there."
Although the COVID-19 pandemic negatively impacted the consumer goods sector, it also boosted new retail channels such as online platforms and live streaming commerce, Zhou said.
His company has its own e-commerce team in charge of online channels. Additionally, online sales accounted for more than 30 percent of total sales revenue in 2021, according to Septwolves' annual earnings report.
Looking back to three decades ago, when China's fashion business was dominated mainly by foreign brands, Zhou said his team dreamed at first to build a Chinese brand. After they achieved that, their next goal was to seek a leading position among listed companies in the global fashion business.
Although China lacks its brands in the luxury fashion sector, "Chinese designers and young people are full of creativity, and they can create excellent works if they have enough space," Zhou said.
Zhou's business works with many domestic designer schools and industry associations to discover fresh talent and develop new brands. Furthermore, in 2017, Zhou's company bought an 80 percent stake in Karl Lagerfeld Greater China Holdings (KLGCK), the owner of the permanent rights to distribute the designer's brand in China, to diversify the company's brands and explore the upmarket fashion sector.