Interview With MS. Xia Hua, Chairman Of The Yiwen Group

Xia Hua, chairman of the group, said in an exclusive interview with reporters at the 2012 Summer Davos conference that China's manufacturing industry needs to improve its sense of respect for skilled workers and increase the income level of mature labor force if it wants to continue to maintain its advantages.

Xia Hua believes that the rapid growth of labor costs in enterprises is due to the excessive mobility of factory labor.

For the downstream retail market, Xia Hua believes that the current economic downturn has had an impact on the traditional retail formats. The traditional store formats are facing the pressure of change; and the online sales mode is too short of content. Xia Hua believes that the way out for e-commerce is to increase the characteristics.

The following is a pcript of the pcript.

Reporter: Welcome Xia general to attend the interview in Davos. First of all, I would like to talk to you about the macro question. What kind of judgement do you have for this economic situation this year? Do you think the current economic downturn will affect the growth of the consumer market?

　　夏华：我是觉得其实从消费市场的总量上和刚性需求上其实没有特别大的影响，因为我觉得身处时装产业，因为我觉得无论是时装呀，还是这些生活用品呀，包括今天已经应该说生活美学用品的消费了，我看到包括其实老百姓都可以看到，你身边的人换衣服的频次都在提高，而且大家都在对于包括生活用品的这种消费需求都在变化，喝茶也要用一个非常特别的杯子，我是觉得这个消费的刚性需求就在这里，但是只是我是觉得，大家为什么会感受这么明显，我觉得只是这种消费方式的变化，因为我真的是觉得从今年的五一之后，最有感受的其实是零售业，我大概接受了，真的是接到了几十位零售业老总的电话，我觉得那个里边有非常焦虑和恐慌在里面，觉得为什么商场突然没人了，因为五一是黄金周，包括马上到来的十一都是黄金周，但是黄金周以往是所有的商

The whole retail sales rush to the peak in such a period, but you will find that there are really no people this year, including Saturday days and big weekends.

But I don't think so. Actually, I am a new economic era. People's lifestyle changes, for example, the way of controlling time, there has been a great change. Now, as long as it is more than two days' holiday, people basically will not stay at home, nor will they bustle about.

Among them, the shopping in fact has started. People will definitely have the way to buy things wherever they go, so you will find the original way, because China, because a large part of China's consumption is in a concentrated area, and then you will find that its number is decreasing. But in fact, I feel that no matter where they buy, the overall purchase index has not come down, because people's demand for life is getting higher and higher, and the demand is increasing. So I feel that behind this figure statistics, I think it is worth pondering, that is, it may take more effort in statistics. I think the overall amount is not down. However, during this tour, you will find all the tours.

Progress, you will find that people's buying methods and channels are really changing. The young group, including my daughter, is that she buys almost anything but even a very small head card. She will spend on the Internet, but those consumers who are likely to mature over the age of 30 are not affected so much at present. But they are also shopping on local products. But I feel that with the technological revolution, including cloud computing, it will feel this kind of texture. For many problems that are difficult to solve in many shopping solutions for many advanced products, with the process, I think the change of consumption channels will be bigger and bigger in the future. The second is that I think the technology is actually.

In the process, I feel that a new topic has been put forward to all Chinese consumer goods enterprises, that is, in what way we are going to let consumers come back, or what channels are used to achieve real consumption and purchase. I think the traditional way will not last too long. I think a real consumption change really comes.

Reporter: so you think this traditional retail format has come to a time of change, right?

Yes.

Because you have to give us a reason why I came.

Because there are too many channels for the purchase of a single product, and the real sense of service and experience of retail industry has not been achieved. Because now I feel that if giving consumers a reason, it must be a good service experience, a good emotional experience, and everyone will go, or even say the whole time of consumption. In fact, people do not necessarily have to take anything away from people in a lot of space. But you really want this space to satisfy his spiritual happiness. I think he is willing to go to small and willing to spend money.

Then I think the retail industry has not made enough innovations and breakthroughs in this respect in recent years.

And I think the government actually focuses on the high-tech industry and technology industry in the encouragement of the whole innovation, but I think the innovation in traditional industries and traditional industries is more important.

Each of his innovative actions will lead to the development of an industry, and I think in this round, if the Chinese retail industry or the Chinese retail brand enterprise can really lead to some new service modes and marketing modes such as condensing the consumption experience, I think you may get a leading position in the pformation process of an industry like this.

Reporter: as a brand name, do you have any expectations for the future trend of this retail format?

Xia Hua: I think I am not only expecting, but I have made an attempt. I have done six years of innovative research and development of such a retail format. For example, for example, over time and space, I have always been, I feel that people are actually getting higher and higher for such a value ratio of time. People are especially concerned about their time, where the limited time should be spent, and then at this time, I think who can break this time and space.

原来说大家一定要花时间去你的地面店、空间店去转店，但是我是觉得现在这个要求其实对于消费者变得越来越高了，因为交通越来越堵塞，然后大家去一趟就要半天的时间，这个半天的时间他大可以去享受享受自然，晒晒太阳，然后看本书，他可能都觉得喝杯茶都是种享受，然后这时候你怎么样去打破时间和空间的，所以我觉得像我们的着装顾问服务的业态，然后像我们的管家服务的，一对一或者是一对几的这样的一个业态，就是不需要你真正的到我的店铺里，我就可以规划你一个季节的完美衣橱的业态，我觉得迟早会到来的，就是消费者他没有大把的时间为买一套衣服去你的空间店，而是我觉得你有没有一种服务可以跨越时间，在机场等飞机的时候，然后在一个大的会议中心等待会议开始的时候，然后在很多高尔夫球场的休息厅休息的时候，然后你解决他需要

The problem of such a need must be solved.

And I think the demand for this kind of consumption will not only decrease, but it will be even higher. The collocation is consistent with my professional background and cultural background, so I think who can solve this change in format, who can lead, who will become a real new leader.

Reporter: you think this kind of future consumption or shopping will also become a fragmented behavior. Then what do you think is that in fact, many brands of clothing have reservations about the way of sale on the Internet, that is, the share is relatively small, and he does not want to shop.

　　夏华：我觉得最大的保留的意见是因为中国的网络消费还只是一个渠道，没有做内容，我觉得这是一个最大的问题，包括这个跟马云的团队我也谈过这个问题，你比如说淘宝现在一年的很大的一个销售额来自于这些重大的活动，聚划算这些活动，这些活动对于品牌商而言，真的是伤筋动骨的，真的是很可怕的，他第一回影响地面店，第二我真的是觉得无论如何算不出利润的，那这样的一些，我觉得这是中国网销暂时的一个情况，真正的品牌商，真正的网销要想在品牌里边占有份额是因为你有独特的内容，你比如说现在也有很多做的很好的，像时尚领域的(09：17 英文)，做的很好的，就是他真的是时尚编辑的一群人，然后他能够把真正的时装的这种混搭和时装跟一个人之间的吻合度做的非常好的这样的一个内容性的，整个的购买的方式。

Then you will know that because you are on the Internet, he will do well for you. How to wear this season is the most reasonable. How to wear this season is the most popular, what brand of brand and what kind of color do you want.

Net sales only enter the era of content really. I think e-commerce can exert power on brand enterprises. Now I think the brand is either dealing with some stocks, or there are many low-end brands that specialize in network sales. You will feel that he can't find a profit formula now. I don't know when he will find a way to make profits. The competition is becoming more and more intense. Your electricity supplier is now a war, and every brand is rolled into it. Then I think if you can't find a profit model before, you will find it harder to find a profit model now.

So I think it's really a piece of electricity supplier. I think every brand has its real network sales content team. I think there will be healthy development and competition.

Reporter: so you are worried that the vicious competition of this kind of electricity supplier will cause a kidnapping and injury to the brand, right?

　　夏华：我觉得现在其实如果说，如果说伤害现在已经构成了，对，因为现在为什么现在品牌企业其实很惧怕电商这件事，就是真的那是一条，我跟陈焱(音)也有几次对话，谈到这个问题了，那真的是一条血路，就是谁进去谁就会沾血，但是不进去你又会觉得那是很有诱惑力的一条路，你会觉得这是这么多人生活方式的变革中，就是你又觉得是必须要走的一条路，所以在这个时候我就觉得也是这样，因为我们其实花了几年的时间一直在研究内容，就是怎么样去真正的做一个好的特别的网上销售的这样一个内容渠道，就是在网上买东西和这不一样，你能有机会，因为他技术上现在越来越成熟，你能跟我全球的设计师有沟通，然后你能有一些特殊的这样的一些对于着装的指导和购买方式，我觉得这个跟地面店之间一定要真正形成区别，就是产品本身不一定要形成区别

After all, we can see all the mature brands in the world, including the LV group, including Chanel, including all these brands. You will see that E-business has always been part of him, not all of them. That's just one of the paths. Even many (12:09 English) are bigger than it, so I think the brand must be very cool faced in e-commerce.

Reporter: so your understanding is that e-commerce, e-online retail can not replace entities, but can only form a supplementary right?

Xia Hua: I feel totally impossible to replace.

Reporter: completely impossible to replace?

The expansion of the ground shop, because I think people in the consumption process, there is always an irreplaceable thing is the experience, especially now the city between people, this kind of people become more and more busy, the more indifference between people, the more you need to find a good feeling and experience, I think this is irreplaceable. Just like today I believe that regardless of the degree of development of e-commerce, the Chinese people for emotion, the whole world, I feel that regardless of Christmas or Spring Festival, I feel that people all over the world still need to return home, why don't you touch the cup on the Internet for OK? I think that is a kind of atmosphere, an experience, I think this is irreplaceable. Xia Hua: Yes, I think the United States or Europe, their e-commerce is actually earlier than ours, but you can still see today, in fact, it is only part of the world, and we are still in the world.

地面店里给你的艺术的感受，给你的服务的感受，然后给你的今天中国做的不好，我觉得依文也是第一个冲出来做这样，明年就会开业一家，我觉得像游戏一样的感受，其实时装就是一种游戏，尤其我觉得男人对于游戏的兴趣，男人时装更是一种游戏，其实每一个男人没时间的时候，都在玩商业游戏，有时间的时候一定会玩玩自己的时尚游戏，怎么样搭出来以后是一个什么样效果的，就像为什么依文这几次成功的，其实这样的一次让我们的消费者，或者是让这些商业里最有影响力的这些领袖，卷进了这场游戏，一起去走秀，在T台上，其实大家觉得很好玩，很有意思，就是你可以看到你在另一个舞台上，或者是另一种时尚态度里生活方式里的那个你，我觉得也是很有意思的一件事，我觉得未来的地面店也要更有游戏感。

Reporter: let's talk about this downstream. Let's talk about the upstream. This is a big thing before this year. It's said that Adidas has made all the factories of its manufacturing industry come out of China. If you feel your own feelings, do you feel that the superiority of China's manufacturing industry is losing?

　　夏华：我觉得中国的制造业的这种优势渐渐清晰，但是如果这个机会抓不住，那对中国制造业真是一次彻底的打击，如果这个机会抓住了，我们就可以说我们现在是能够看到隧道尽头的光芒，因为中国制造业，其实不是今天了，其实是一直面临着一个巨大的这种夹缝中生存的这样一个非常恶劣的环境，上面其实是欧美，欧美其实这几年都在重换制造业，重整制造业，欧美的制造业它非常成熟是它的工艺优势，就是有很多我们今天也有很多下在欧洲的单，是中国的工艺时限不了的，他已经形成他独特的工艺优势了，也很多高级产品我们做不了，为什么?因为他的劳动力的这样的一个稳定性，因为他的工厂里你去一看，就是会有奶奶的，然后母亲的，然后孙女的这一辈，就是他已经是在高级工艺里已经形成了很独特的这种高水准和特殊型工艺的这样一些水平了，那

Below is the rise of such manufacturing industries as the price advantage of emerging countries, and China's biggest problem now is how we can pform from this relative price advantage to quality advantage.

但是在这一点上我恰恰觉得，我们应该乐观的去面对，因为你有优势，为什么?这十几年来欧美的整个高级订单在中国，下进了中国的工厂，中国成为世界工厂这个过程中，其实整个对于中国制造业的管理上一个非常重要的提升，因为他们都是带着他的QC来的，每一个单下来中国工厂的时候，他都不是完全放心的，都是带着他的一些流程的管理模式，还有工厂的管理模式来的，甚至他们还有给工人做培训，在这个过程中，真的是大大的提升了中国工厂的制造业工厂的管理水准，而在这一点上，新兴的发达国家跟我们之间还有很大的差异，因为这是靠时间和靠具体的这样的一个过程的历练的，所以我觉得在这一点上，恰恰这是中国的制造业的一个优势，就是中国制造业已经经历过非常高端商品的那样一个严格的工艺流程或者工艺管理的考验了，那其实已经成型了一批的

An excellent manufacturing factory is the way we should see now. How the light at the end of the tunnel makes the group of manufacturing plants really become the top end of the manufacturing industry?

The branding of manufacturing is very, very slow in China because manufacturing is all factory oriented, and no one knows what his name is, but in some of the most famous factories in Europe, even though he has no retail brand, people know that he has become the idol of all the partners in the world.

I think it is very important for China to make rapid use of some of the advantages and processes of our manufacturing industry relative to these emerging countries, or the advantages of the whole process, and then branding it.

　　第二个我觉得中国的制造业的优势是中国和其他新兴国家不一样的是，我们真的是有这么五千年的文化底蕴沉淀下来的一些手工艺的艺人和匠人，我刚才跟记者就谈到这个问题，这些手工艺的艺人和匠人你真正接触的时候，你会发现真的他没有赢得社会的尊重，第二个他们真的是没有转换成他自己的手工工艺的这些工匠的这一些记忆没有转换成价值，他们还都是低保户，还吃着低保呢，就是如何让这些手工匠人和民族形成的这些非常有价值的工艺，真的转换成就像意大利和英国那样的，转换成一些和制造业结合的工艺特质，也有自己独特的这样的一些工艺技能的制造业，未来才不可替代，今天因为可替代就是因为你没有什么独特的，你都是一样的，大机器的操作，你没有一些手工艺的流程嫁接进来，让这个产品的独到性只有在中国的工厂能实现，在印尼的工厂

The factories in Vietnam can not be realized at all.

Only by forming a truly unique technological advantage can your manufacturing industry really be invincible in this position and enjoy this bonus for a long time.

So I think in these two things, I think he needs the support of the government.

Reporter: are you calling on our policy to gradually increase the income level of this mature labor force?

Xia Hua: Yes.

Reporter: but now, enterprises may also face a pressure, that is, the cost of labor is rising rapidly. How do you think the balance of these two aspects should be balanced?

　　夏华：我觉得这两方面的矛盾其实最后其实他是一件事，就是他不是一个矛盾的，你比方说现在为什么我们的劳动力成本高呀，其实因为比方说依文现在品牌的支撑力非常强，我们上下游连接了600家工厂，哪怕从纱线，一个细小的零件，我一个服装品牌就会连接600家工厂，那这里边很大很大的一个问题是什么?就是中国的劳动力不稳定造成了这样的一个高成本，为什么不稳定?其实我觉得这里边有一个社会价值观的问题，这不是某一个企业可以解决的，你比方说为什么在欧洲可以，一个蓝领工人可以一辈子在这样一个岗位上非常自豪的工作下去，因为我是觉得他在整个的社会地位上，他虽然是一个缝纫工人，但是我觉得他丝毫不影响他的幸福感，自豪感，但是在中国三四年的缝纫工就一定希望我出去哪怕不做点儿小买卖都没出去，我哪怕去卖水果，卖瓜子，我可

It can be better than this.

The income is really not low, like now average, such as upstream factories are averaging 3000 to 5000 such a salary, but even such wages, he wants to do something else, rather than this thing he already knows very well. I think this is a question of social values. This requires the whole society to respect a basic manufacturing worker. They are artisans. I think it is important to give full respect to such people with unique skills and skills. I think this is very important. I think this is not a business that can be done. I think this is a social value formation in the process of social pformation. In fact, today's blue collar workers in China are such a foundation.

I think once this happens, the labor force is really stable. It is very important for people not to consider these factors in the wage fluctuation and choice.

Now many factories on the upper reaches of my River are unsaturated, and many good factories are actually very good, and the orders are very full. The reason why the production is not saturated is that if the workers have the opportunity to do something else, he thinks that it should not be his lifelong career. This is a very frightening phenomenon. You really want to say that we really talk about the promotion of a worker's wages, saying that in one case, because the price of the product is constant, it is a spiral up, the wages of workers have been raised, the processing fees of factories will rise, the retail prices of brands will rise. In fact, this promotion is orderly, but the disorder is the change of workers' back and forth, resulting in huge training costs.

Because a worker has no stability training for three to four months, he has no way to go to work. Now you can ask the factory, because the cost of the workers' change is out of control, very, very serious.

So why do I think that first let a group of people be able to stabilize. Everyone said that they would live and work in peace and contentment. When he was willing to do such a thing, all the costs would be controllable. We could see the cost and see that it could be calculated. In fact, every year's budget of all enterprises did this thing.

我的一个最基本的工人，每一年的年薪的增长比例，和我的零售价的增长比例是可以成比例的，但是你不可控的是这些人随意就走，而且今天的保障，社会保障性，从某种角度上又驱动了这一点，因为大家走是企业要付钱的，我没关系的，所以在这一点上，我还是觉得需要完善，我觉得无论是这种双方的契约关系上需要完善，还是整个社会的价值观上去需要，我觉得有一个更好的价值引导上，我觉得这真的是需要企业和社会和国家共同努力才把这一件事情，因为为什么我说这件事情不应该成为问题，在一个整个的一个产业发展过程中，这是每一个国家的每一个产业都必须面临的问题，如果最基本的劳动力，然后最基本的劳动力成本，最基本的税收，然后最基本的运营成本你都觉得是一个企业发展的真的限制和瓶颈的话，那未来你想想你花在品牌和营销上的成本会更

Which way is it? Right? That's just the beginning. I think the money that Chinese brand enterprises really spend on consumers, spend money on the service sector, and then spend money on those brand marketing, a brand that never knew, was recognized, respected. This process has just started. How can you become an international brand? So I think this process is the basic ability when the first pass comes, and this basic ability we try our best to go to, the so-called uncertainty, as far as possible, to control the uncertain factors that are not controllable, the determinant factors, this is the enterprise you must overcome in the course of your development. Big, how are you?

Reporter: look at the current situation, workers can not stay, the boss is running, you see, in the first half of this year there are a lot of such eastern region such boss run away events, which do you think is a cause of this phenomenon?

Xia Hua: I think this is more a fact, a topic that must be talked about for China. I think this is the biggest uncertainty topic, that is, you are the entrepreneur's mentality. I think this is a problem of entrepreneur's state of mind and state. Because I think the biggest difference in Chinese Enterprises is that I participated in a topic on the difference between Chinese and western entrepreneurs. I think it is generally regarded as an entrepreneurial entrepreneur. Because I never had money to get rich, from money to change money, and from money to money, from wealth to achievement, I think this process is very different.

I think Chinese entrepreneurs generally have never gone through the process of having money to get rich, because many enterprises have gone through it, but then from money to real to become a socially responsible entrepreneur, and then to fulfill others and really influence the society, I feel that the psychological state of this process will be very very large. He is particularly susceptible to interference from other factors, such as policy factors, such as the biggest factor, security factor, as long as there is an entrepreneur who has problems, then everyone will immediately think about security issues.

In fact, there are two problems in China in the year: polarization is very serious. One is entrepreneurs who are making money. Anyway, no matter what kind of way I make money, I earn money. I want to think about my life in the rest of my life. One is a part of the entrepreneur who has a huge responsibility. I really think I think in Chinese society, what should I say in Chinese society? It should be given a positive voice, because these enterprises in the society are very important. They are not only making money for themselves, but also driving a group of people to make money. The key is that they are brave enough to input their values into other people. This is the positive energy of a society. I still feel that I feel that the return of entrepreneurs is very important, because I think these are few.

But this positive energy becomes very, very uncertain, which is a very important reason for all entrepreneurs to feel suspicious.

So I feel that entrepreneurs should lower the expectations of this society. I think citizens should also reduce such a standard to enterprises. In fact, I say that the responsibility of an entrepreneur returning to a real entrepreneur is a basic responsibility for a good company and a good life.

If you can't do a good job and live a good life, it will not only affect you, but also affect everyone's approval and opinion about the value of doing business. So I say that the real social responsibility of entrepreneurs is to be a good person easily. I think it's not easy today. Yesterday was a good person. Maybe tomorrow it will become a bad person. Then it can not be easy to have a good dream. Many entrepreneurs often have nightmares. This is actually a very important reason for what you said, because you have nightmares, so you feel terrible.

第三个我觉得能够持续的做件好事，我觉得今天的中国企业的，我觉得企业也好，企业家也好，守住这个底线非常非常重要，我觉得这三好，做个三好的，做个三好生非常重要，这三好就会让你觉得其实他的做到并不难，如果每一个企业都这样的做到，每一个企业家都这样做到，我觉得这个氛围自然就会好一些，因为外面的世界说一些大的这样的一个氛围和环境不是我们做企业的人可以决定的，但是至少我们可以在我们这一个圈子里面，企业家的这个圈子里面，我觉得都有这样的心态，那么你各自都做好了这三件事，我觉得可能你就会发现每一个人的心变得稳定下来了，一定是稳定下来了以后，才能够真正持续的向前发展，否则大家一直在这个过程中去动荡，去被影响，所以我是觉得在这一点上，我觉得这是一个企业家心理环境的调控过程，我觉得这不是完全是政

Policy can be resolved, of course, policy, we can be entrepreneurs, these years are also appealed for, there is a clean space, and then there is a relatively safe space, I think this is, in fact, from an optimistic perspective, in fact, China is still relatively safe and stable space, because we actually go all over the world, you really will find.

So I feel a little less demanding for the environment and more requirements for myself. I think this process may shorten the process of psychological control. Then I think this process is really important for China's economic development.