When first visiting luggage factories in Jiaxing (China) , I was indeed shocked by the scene. The whole city has hundreds of luggage factories. On our one-hour-trip driving through this city, we met large factories nearly every 5 minutes, and countless small factories. Jiaxing is only one of the four large-scale ‘luggage city’ in China. “This is why China has the nickname ‘World Factory’”, said my colleague. Well, welcome to the real scene of ‘Made in China’.
Chinese luggage factories accounted for about 95% of the global product share. Regrettably, lacking of their own brands, most of them are unknown to the us. For large factories, they becomes foundries for international brands; for small, stick different brand tags according to channel requirements. Profits are squeezed by low profile & fierce homogeneous competition, so factories could only maintaining the profitability by increase shipments, or worse, decreasing employee salaries.
We see the problems in this industry, and in our opinion, problems are opportunities. We decide to create high-quality luggage and sell at a more reasonable price. Meanwhile, we make up our mind to promote industrial upgrading and achieve a win-win program. But as we generally studying the producing process, we found the most severe problem in this industry is hard to innovate.
The seemingly simple luggage producing industry turns out to be highly industrialized and detailed divided unexpectedly. Similar to car manufacturing pattern, luggage factory only response to assembly, not for manufacturing. Components used for assembly rely entirely on procurement, which from up to a dozen types of component supplier. The difference between luggage factories is from bargaining capacity and the ability to control the pipeline.
Under current situation, the product producing progress starts from component supplier. Factories can only choose from the new component suppliers provide, and recommend the new luggage to customers after assembling. While this business model can effectively improve efficiency and reduce cost, it can’t meet the needs of mass customization. In another word, this business model is facing an enormous risk of failure. Component suppliers do not directly contact the customers, so most of them have no idea who they eventually sold their product to, not to mention customers’ preference. As a result, we have so much unacceptable luggage selling in our market.
What Ready doing is changing this situation. We are trying to create a new business model, producing new luggage according to what our customer wants. To be honest, it can be extremely difficult to make a difference in this traditional industry. Generally speaking, some design changing requires the adjustment of the entire production line, including the adjustment of component supplier. Due to the meager profits, factory will only pay attention to the needs when large order comes. So if those who have big orders do not want to innovate, then will be even more difficult for others.
Well, although it can be very difficult, we still persist in making the dream, producing luggage according to customers’ needs, into reality. Our value is to solve the difficulties. In a short time, you can see this change clearly, with seeing Ready Luggage.