Rolling up sleeves for on­line play

China Daily (USA) - - BUSINESS | FOCUS - By YANG ZIMAN yangz­i­man@ chi­

A year back, when Yu Lida and three part­ners founded iOrder Shirts, an on­line maker of men’s cus­tom shirts, lit­tle did they imag­ine their business would ex­pand to 36 cities in nine months with monthly sales touch­ing 2,000 shirts.

To­day, Yu talks of ex­pand­ing the on­line business to 300 of 334 pre­fec­ture-level or moder­ately de­vel­oped cities in China by 2018, to sell 500,000 shirts a year.

Fir­ing his con­fi­dence is iOrder Shirt’s suc­cess in rais­ing 6 mil­lion yuan ($902,000) in fund­ing from ven­ture cap­i­tal firms and pos­i­tive feed­back from con­sumers.

iOrder’s shirts are priced 399 yuan on­wards up to 499 yuan, and tar­get business ex­ec­u­tives and young pro­fes­sion­als. The fab­ric made of long sta­pled cot­ton ap­pears shiny and can with­stand hun­dreds times of laun­dry washes with­out get­ting wrin­kled.

Yu is con­vinced he can now be a lot more creative in shirt-mak­ing even if that hurts the firm’s prof­itabil­ity.

For more than 20 years, based in Hong Kong, he en­gaged in bulk man­u­fac­tur­ing. The business was lu­cra­tive. But it was dic­tated by his clients, two ma­jor Hong Kong-based shirt and jeans mak­ers that worked for top fash­ion houses such as Burberry and Ar­mani.

In 2010, when the Hong Kong clients started to shift or­ders to South­east Asian coun­tries due to ris­ing la­bor cost in China, Yu pon­dered go­ing to Viet­nam him­self and repli­cat­ing his suc­cess model there.

Had he done so, he thinks he could have con­tin­ued to make prof­its in mil­lions of dol­lars ev­ery year us­ing cheap local la­bor. But he didn’t.

He had other ideas.“Many man­u­fac­tur­ers went broke when they tried to raise the qual­ity of their prod­ucts. Their chal­lenge was that they didn’t have di­rect ac­cess to con­sumers. They could only sell to the deal­ers who only cared about the price,” Yu said.

Re­al­iz­ing he had fi­nan­cial free­dom and hence noth­ing to lose if he struck out on his own, he quit his job as sales direc­tor and launched a business to gain di­rect ac­cess to con­sumers.

The new com­pany, with fo­cus on sell­ing cus­tom­made shirts on­line, was reg­is­tered in the south­ern city of Guangzhou, Guangdong prov­ince, where its sup­ply chain was based. But its sales and mar­ket­ing of­fice was based in Shang­hai.

“Cus­tomiza­tion sounds very sim­ple: you take the cus­tomer’s mea­sure­ments and make a shirt. At least, that’s what many so-called cus­tom gar­ment-mak­ers be­lieve. So, they take the eas­i­est route: out­sourc­ing. But

Dis­tri­bu­tion, es­pe­cially com­mer­cial space for out­lets and stock­ing or ware­hous­ing, is the big­gest cost for China’s gar­ment in­dus­try, ac­cord­ing to Min Guangya, a con­sul­tant for the China Na­tional Gar­ment As­so­ci­a­tion.

The in­ven­tory value of 32 listed Chi­nese tex­tile and gar­ment com­pa­nies rose to 22.2 bil­lion yuan in 2015, up 19 per­cent from 2011.

Ac­cord­ing to the sta­tis­tics of Askci Corp, a Bei­jing-based in­dus­trial anal­y­sis and con­sul­tancy firm, the an­nual re­tail sales vol­ume of men’s shirts in China will sur­pass 800 mil­lion pieces by the end of 2018, gen­er­at­ing a rev­enue of 121.5 bil­lion yuan. I stick to the most stan­dard type of men’s shirts ... I see huge po­ten­tial in this niche mar­ket.” Shirts

Yu Lida,

founder of iOrder are es­ti­mated to be sold an­nu­ally by 2018 through Yu’s on­line net­work

their prod­ucts just don’t meet cus­tomers’ needs,” said Yu.

“If the cus­tomer wears a tie, the neck needs to be slightly higher than if he doesn’t. If the cus­tomer tucks in his shirt, the shirt needs to be slightly longer so that it won’t pop out of the trousers when he raises his arms.”

So, iOrder Shirt adopted a dif­fer­ent ap­proach to shirt cus­tomiza­tion. Its on­line store col­lects 70 dif­fer­ent mea­sure­ments from a cus­tomer, so that the fit is per­fect.

“With­out years of ex­pe­ri­ence (in shirt-mak­ing), one can’t pos­si­bly have a clue how to de­sign an on­line sys­tem that col­lects cus­tomers’ data and make the shirts ac­cu­rately. My business may be on­line, but the brick-and­mor­tar fac­tory cre­ates at least half of the value of my com­pany,” said Yu.

Some in­vestors tried to per­suade Yu to get rid of the elab­o­rate mea­sure­ment sys­tem as they be­lieve it slows down the whole process.

But, ac­cord­ing to Yu, the key to de­liv­er­ing a shirt to the con­sumer within 15 days after record­ing the mea­sure­ments on­line is that each link of the pro­duc­tion process must be dove­tailed to another. But he does see that per­sonal in­ter­ac­tion is a lot more suit­able for shirt cus­tomiza­tion than on­line mea­sure­ments.

“I stick to the most stan­dard type of men’s shirts. As or­di­nary as they­may seem, I see huge po­ten­tial in this niche mar­ket.” Gao Songya and Mu Sai con­trib­uted to this story

Such es­ti­mates have at­tracted many peo­ple to var­i­ous mar­ket seg­ments.

For in­stance, i.Fdu, an on­line cus­tomshirt maker, tar­gets men in the 20-35 age-group. Com­pared with iOrder Shirts, i.Fdu seeks to of­fer more diver­si­fied and per­son­al­ized prod­ucts, co­op­er­at­ing with fash­ion brands, de­sign­ers and artists, to make shirts more ap­peal­ing to young peo­ple.

Tay­lorism, a Shang­haibased on­line-to-off­line men’s cus­tomshirt maker, also tar­gets the same group. It plans to make cus­tom­suits for men and leather shoes in fu­ture.

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