OEM is a common phenomenon in China. It can be understood that OEM is a big trend of separating production and sales in the international division of labor environment. However, relatively speaking, although the OEM avoids the distraction of many aspects of sales, it can focus on the production under the order, but it cannot share the value of the brand.
Therefore, in the international division of labor, the entrusting party is still in a subordinate position, and the profit rate is low. For example, the Foxconn labor incident can be understood as OEM, with low passive profits, which actually sacrificed the rights and interests of most workers at the bottom.
At the same time, the ratio of OEM phenomenon in electronic products is particularly high. For example, the notebook computers produced by Quanta, a famous OEM manufacturer, account for about 3% of the total number of notebooks in the world (in 25), while Quanta has no own notebook brand.
iSuppli, an p>IT data company, says that 86% of the laptops sold in the world come from China (data in August 26). But it is mainly produced in the name of OEM such as Dell and Hewlett-Packard.
the core of the difference between OEM and ODM lies in who owns the intellectual property rights of the product. If the entrusting party owns the intellectual property rights of the product, it is OEM, which is also commonly known as "OEM". And if it is the overall design carried out by the producer, it is ODM, commonly known as "OEM". [Edit this paragraph] The difference between OEM and brand There are some factories in China manufacturing industry, which are not well-known but are OEM manufacturers of world-famous brands. These factories carry out production after receiving production orders from world-famous brands, and they are often sold at extremely high prices after being produced by OEM factories in China. While the brand gets high profits, the foundry can only get meager profits. These OEM factories are called stealth famous brands or the famous brands behind them, specifically referring to the brands that process customized products for internationally renowned brands. Youngor and Galanz used to be stealth famous brands.
Burberry, a British national treasure luxury brand, has moved to China despite the domestic resistance. Has the phenomenon of "cheap OEM of luxury goods in China" been gradually put on the table from underground?
Burberry closed its main British factory in Doug, South Wales, because it could no longer operate commercially. According to the "globalization" plan put forward by the brand last September, this "luxury brand with British characteristics" will officially move its production line to Shenzhen, Guangdong, Chinese mainland.
however, the brand did not announce the news of moving the factory in its official website. According to British media reports, Burberry has a lot of resistance to closing the factory this time. For months, demonstrators have been holding signs outside the branches in Paris, new york, Las Vegas and London. Entertainment stars, government officials and even Britain's Crown Prince Charles have joined the ranks of pleading, but they have failed to stop Burberry's determination to move to the factory. It is understood that about 2% of Burberry PoloT-shirts were produced before the closed Wells plant. This production line will be moved to four other existing PoloT-shirt factories in China, Poland, Portugal and Spain. Some analysts pointed out that Burberry's move to China was an extension of its Japanese strategy since 1997.
unlike Burberry's "big fanfare" move to China, many luxury brands have been "quietly" doing OEM production in China. According to an insider who knows the background of international luxury goods manufacturing in China, the production lines of the world's top luxury brands such as Armani have already settled in China. It is reported that in early 27, Louis Vuitton had found an authorized manufacturer in China and started to establish a production base in Hangzhou, Zhejiang.
For example, the predecessor of Hong Kong Osha Group is the OEM factory of international high-end clothing brands, and its history of OEM for international famous brands can be traced back to 1957. This group produces for many international luxury women's wear brands and world famous brands, but ordinary consumers don't know much because of the confidentiality agreement. However, it has long been known as a stealth brand in the clothing industry, and its clothing is famous for its exquisite fabrics, high quality, high quality and low price.
some enterprises in Shenzhen, dongguan and other cities in Guangdong province, as well as Wenzhou and other places in Zhejiang province, have also been accused of engaging in international OEM production of luxury goods. A director-level designer of Dzheniya, a luxury brand that started with the production of top-grade fabrics, also said in public that Zhejiang, China is an important producer of high-grade fabrics for the brand's garments.
Advantages of OEM
"In the eyes of most consumers, these luxury brands are produced overseas and have the label of origin. But in fact, many luxury brands have chosen to move their production plants to China. " Ouyang Kun, executive publisher of the Chinese version of Global Luxury Report, revealed that it is an inevitable phenomenon for China to make international luxury goods due to the pressure of cost and transportation.
According to beijing business today, an authorized manufacturer of luxury goods, who did not want to reveal his name and company name, said that the production of luxury goods "shifted to China mainly because of the low production cost in China". According to the source, as far as he knows, the hourly wage of workers in overseas garment factories is about 2 dollars, and the working hours are fixed; The wages of workers in China are very low, the labor cost is only 1/2 of that in Italy, and they can often work overtime. The cooperation with domestic authorized manufacturers also saves the huge investment in fixed assets that luxury goods manufacturers need when expanding the production scale of their products. [Edit this paragraph] Taboos for OEM of luxury brands According to the above-mentioned authorized manufacturers of luxury goods, although it is an indisputable fact that China has become the largest manufacturer of luxury goods in the Asia-Pacific region, luxury brands that have established a relatively complete production network in China are "relatively taboo" about the status quo of OEM of their products in China.
The source said that in order to prevent the news that products are manufactured by China enterprises, some luxury brands even forced authorized manufacturers to sign confidentiality agreements. In order to conceal the fact that they are produced in China or other Asian developing countries, some first-line brands even find some remote processing plants to provide OEM services, and some family-run processing plants are not even known to the locals.
"Almost all authorized production enterprises in China have signed protection agreements and are forbidden to disclose any details." The source said that this is mainly due to the luxury brand's own consideration, and the confidentiality agreement can prevent the luxury consumer group from having psychological fluctuations, thus having a negative reaction to its products.
It has long been a common fact that foreign first-and second-tier brands have production lines in China, but as far as they know, major luxury brands are not secretive about it. "It's just because of brand marketing strategy that they don't sell products made in China in China."
According to its introduction, many luxury brands have foundries all over the world, and traditionally, the production places and sales places of their products always cross. For example, Armani ready-made clothes marked "made in China" can't be bought in China market, but he himself bought an Emporio Amarni T-shirt marked "Made in China" in Italy last year. [Edit this paragraph] OEM factories gradually build famous brands. On the one hand, world-renowned brands are OEM in China, on the other hand, OEM factories are also branded. There are many successful cases, such as Youngor, Galanz and Foxconn. These OEM factories used to be called stealth famous brands or the famous brands behind them, which refers to the brands that process and customize products for well-known brands. Youngor and Galanz used to be stealth famous brands.
The appearance of stealth brands has broken the monopoly of famous brands on prices, and really benefited consumers. For example, microwave ovens used to be high-end appliances, and the prices were generally more than several thousand yuan. The appearance of Galanz provided low-priced and high-quality products, which quickly popularized microwave ovens. Stealth brands often allowed consumers to buy the same products as internationally renowned brands at a price of one-fifth or even one-tenth. Faced with the same quality and products, they can buy 5% or even 1% discount products. Relying on excellent quality and low price, these OEM factories have rapidly grown into China famous brands and even world famous brands.
As mentioned above, the OSHA Group in Hong Kong left the garment factory in 27 and registered the O.SA trademark, and started the branding measures. O.SA cooperates with local well-known vendors all over the world, using the mode of online direct selling, reducing intermediate links and ensuring extremely competitive terminal sales prices. In 26, O.SA began to expand its domestic business in China, with a branch in Shenzhen, China and several e-commerce websites, mainly engaged in clothing e-commerce, trying to conduct clothing direct sales through the network, and began to cooperate with Taobao in China in 28. At the same time, in 28, we cooperated with American Eagle Outfitters (American Eagle Clothing Company), and jointly launched a new e-commerce website of Martin+Osa high-end brand clothing. The efforts in a short period of time have achieved initial results.
At present, the "invisible famous brands" in China OEM factories are rising rapidly, and the momentum is very strong. I believe this is very helpful for China's industrial transformation and making consumers get more benefits. With the branding of OEM, the difference between OEM products and branded products is gradually blurred.