The Route Choice of the Brand Creation of Chinese Textile Original Equipment Manufacturers in the Post-Financial Crisis Era

Abstract

Since the broke out of the financial crisis, the golden period for the export of Chinese textile and garment has passed, and the process for the global textile and garment manufacture base to transfer gradually from China to India, Pakistan and Southeast Asian countries has started, which is irreversible. It is difficult to finance and find talents; the information flow is not smooth; and the most critical problem is that Chinese textile enterprises which strongly depend on foreign markets can not obtain orders. As such, Chinese garment enterprises have to transfer from original equipment manufactures (OEMs) to brand enterprises to make "made in China" become "brand of China". The upgrade from OEM to brand creation is the requirement for the sustainable, stable and healthy development of Chinese economy, and also the necessary choice of the textile OEMs to respond to the changes of the domestic and abroad market as well as to develop their own ability. However, the transfer process from OEM to the brand creation is not smooth. The co-effect of many factors will make the textile OEMs dependent on the route and locked in the role of OEM in the value chain. This is proved by the industrial development history of some developing countries and regions as well as the fact of the bankruptcy of some Chinese textile enterprises under the global financial crisis. However, such "lock-in" is not rigid. It is absolutely possible for textile enterprises to upgrade from OEMs to brand creation under certain internal and external conditions.