The Myth Of Clothing Industry Shenzhou International Relies On Supply Chain To Refresh Its Record.

Shenzhou International has always been the benchmark of the industry. It is also the myth of China's clothing industry. Many people are very curious about the operating mode behind Shenzhou International's Gao Mao interest rate and high net profit margin.

In fact, Shenzhou International is mainly processed by generation. In professional terms, it means OEM. That is to say, according to the requirements of another manufacturer, a manufacturer produces the products and accessories that are needed for the latter, that is, what we usually call "licensed production" and "authorized OEM production". In recent years, many first-line brands and second-line brands of computer hardware are commonly present in this generation of processing. Only the vast majority of high-end products need to be secrecy technically, so their own brand businesses are self produced.

Most of the brand manufacturers will check the quality of products strictly. Therefore, the OEM manufacturers basically choose the two or three brands which have considerable strength. At the same time, it is also not that the quality of OEM OEM products will be poor.

Like Shenzhou International, the leading brother in garment processing industry, we can see his strength from Shenzhou International semi annual report in 2019. During the reporting period, Shenzhou International achieved a total revenue of 10 billion 200 million yuan, an increase of 12.2% over the same period, a gross profit of 3 billion 175 million yuan, a gross profit margin of 30.88%, a net profit of 2 billion 416 million, and a net profit margin of 22.7%.

In this regard, some people in the industry are very puzzled. In garment manufacturing enterprises, the OEM factory is basically maintained at 8%-12%, even the ODM factory will not achieve such a high net profit of 20%, because generally speaking, the market is a free market. Basically, if the threshold is not high, there will be a large number of competitors entering, resulting in profits. Pulled down.

However, Shenzhou International mainly deals with foreign brands. Even if it is foreign brands, it will also reduce costs, and cultivate a new foundry. Nike, one of Shenzhou's International Foundry brand, has a net profit after tax of only 12%-15% a year.

In fact, why can Shenzhou International achieve a net profit margin of over 20%? Actually, there are reasons. Because Shenzhou International is actually not only the production of OEM, they also do contract work, and the materials like knitted fabrics are processed by themselves.

All this is due to the strong supply chain system of Shenzhou International. Although the garment processing industry is not a very profiteering industry, we should not be surprised that Shenzhou International profit margin exceeds 20%. Because it only made every link to the extreme, and at the same time gradually improved the industrial chain, so as to achieve a good synergy effect.