Industry cuts its cloth to measure up to buyers' needs

"Our group became mainly focused on self-managed exports and not using any trade agents for our products," he says. "This is effective and efficient.

"We have also focused a lot on going global and improving our cooperation with international trade companies."

Jiangsu Guotai International Group exports its textile products to many countries and regions, including the United States, Europe and Japan. It has increased them to emerging markets such as South America and Central Asia, Zhang adds.

What's most important, he says, is that the group aims to build itself into a service provider.

"Unlike other textile companies which just make products, our aim is to provide trading and logistics services for the whole textile industry," says Zhang, in the belief that this will overcome the challenges of a changing market.

"It is normal for some products to decline and disappear under fierce competition but, regardless of whether products become popular or unpopular, there always need to be trading service providers."

He also believes his company's transformation is beneficial for the textile industry as a whole.

"It's not just change. It means improvement in efficiency and innovation," Zhang says. "The Chinese textile industry is not well structured and suffers from overcapacity."

So far, China has lacked international trade companies which focus on consumer products. This provides an opportunity for Jiangsu Guotai International Group.

"We can provide trade and logistics services for the industry and help transform it as a whole," he says.

To do so, Jiangsu Guotai International Group will keep an eye on possible international mergers and acquisitions and develop its import and investment businesses to improve the domestic market.

Zhang says his company may follow the same course as the Hong Kong Lifung Group, which he says racked up sales of about $21.8 billion last year, with $10 billion coming from import and export business. It had conducted mergers and acquisitions with many foreign brands.

"We are also looking for M&A opportunities to provide intermediary services to our customers and increase our brand recognition," says Zhang.

Although the group's export business has far outweighed that of imports, the latter has great potential because of the huge domestic market, he adds.

"It is expected that import sales will increase to $700 million this year from last year's $540 million."

Being based in Zhangjiagang, a county-level city of Suzhou, gives the group many advantages to develop the import side.

"It is very convenient for us to conduct textile import businesses through Zhangjiagang's bonded zones. What's more, it's located in the fast developing Yangtze Delta area, where customer demands are high," Zhang says.

But he is aware there are also major challenges facing import businesses.

"The global business has witnessed the shifting of the manufacturing base from China to other Southeast Asian nations, such as Vietnam," Zhang says. "It is likely the Vietnamese will provide products to our group in the future, because our Chinese factories are becoming fewer."

On the plus side, there is a great opportunity to develop the domestic market. "Through improving our domestic market, we can combat the challenges of renminbi appreciation," Zhang believes.

He says the group will also develop its own clothing brands. "So far, we have 50 factories which provide strong support to the imports and exports industry," says Zhang.

The investment businesses of the group also support the group's trading business.