Wrapped in silk and bound by threads

Time:2019-05-31 Source:China Daily


Visitors at Suzhou Silk Museum study the silk weaving craftsmanship. [Photo by Gao Erqiang/China Daily and provided to China Daily]

The place where the iconic three-columned Oriental Pearl TV Tower is now located used to be where the Lujiazui textile and fabrics warehouse once stood.

Back in the 1980s, when Shanghai's textile industry was at its peak, the facility was known as one of the busiest warehouses in the city.

For Lyu Gang, chairman and chief economist of Shanghai Silk Group, this spatial relationship between the tower and the warehouse is highly symbolic.

"The heights that Shanghai has reached today as an international metropolis comparable to the likes of New York and London is partly due to the once prosperous textile industry in the city," says Lyu, a 59-year-old Shanghai native who has been in the textile industry for more than four decades.


The quality of craftsmanship and weaving technique are something Chinese luxury consumers look for. [Photo by Gao Erqiang/China Daily and provided to China Daily]

At its peak in the 1980s, the Shanghai textile industry contributed more than 4 billion yuan ($600 million) worth of tax to the municipal government and provided a livelihood for more than 550,000 residents.

Such was the scale of the textile sector that it was even dubbed "Shanghai's mother industry". But the industry began to decline in the early 1990s as the city strove to curb pollution and transformed itself into a financial and high-end manufacturing zone.

Today, textile factories can no longer be found within the city. However, Lyu points out that this does not mean that the textile or silk industry is dead in the city.

"We are simply removing the middle process in manufacturing. The two ends, design and product development, and consumption can still be found in Shanghai," Lyu adds.


Suzhou silk weaving. [Photo by Gao Erqiang/China Daily and provided to China Daily]

Indeed, the financial results of the Silk Road on the Sea, one of the subsidiaries of Shanghai Silk Group, indicate that the industry is indeed alive and well. Established in 2012, the brand's sales have enjoyed an average annual growth rate of 20 percent since its inception, reaching 10 million yuan in 2017. The company expects to rake in 50 million yuan in annual sales within the next five years.

Silk Road on the Sea currently has eight retail spaces in Shanghai and introduces between 40 and 60 new products every year. In June, it released its latest summer collection, comprising silk scarves combined with wool and silk paintings that feature Shanghai's skyline.

"For most of the silk brands in China, tourists who purchase silk products as one-off souvenirs make up the core group of customers," says Lyu.

"However, our most important growth driver is the local consumers. They are mostly female, above the age of 30 and like incorporating silk into their wardrobe. This means sustainable growth."


Lyu Gang, chairman and chief economist of Shanghai Silk Group. [Photo by Gao Erqiang/China Daily and provided to China Daily]

Lyu also points out that the brand's approach of making silk "affordable and alluring" has allowed it to flourish despite a flagging industry. A silk scarf from Silk Road on the Sea costs around 400 yuan. A similar product at Hermes can cost about five times more.

While China may still be the world's largest silk producer, exporter and consumer, the domestic industry has been in decline for the past two decades.

Silk production has been hit by the dwindling population of mulberry farmers, who have replaced their crop with more lucrative plants like passion fruit, and this has in turn caused the price of silkworm cocoons to balloon. This spring, silkworm cocoons cost 40 percent more than usual.


Shanghai Silk Group uses traditional patterns in its highend silk products. [Photo by Gao Erqiang/China Daily and provided to China Daily]

Other factors behind the industry decline include the rising costs of labor and the measures required to reduce the amount of pollution caused by the dyeing of silk products.

Yu Jinjian, founder of silk lingerie brand Sang Luo, pointed out that the characteristics of silk have also worked against the popularity of the fabric, explaining that many consumers are not fond of it because it wrinkles easily and is difficult to launder.

In 2017, the total amount of raw silk produced in China stood at nearly 140,000 metric tons, down by 1.86 percent year-on-year. Meanwhile, the production of processed silk dropped by 11.62 percent to about 7,600 tons, according to the National Bureau of Statistics.

Some manufacturers have responded to the situation by mixing low quality silk with other types of fabrics so that the product can be sold cheaply. But Yu has adopted a completely different approach repositioning silk as a luxury item.

Her strategy has certainly worked. Last year, Sang Luo raked in 900 million yuan in revenue, up 20 percent from the previous year. The company also achieved 40 million yuan in online sales during the first half of this year, up by 200 percent.


Sang Luo's staff introduces its history. [Photo by Gao Erqiang/China Daily and provided to China Daily]

Sang Luo's products, which can be found on e-commerce platform, include silk night gowns priced at $100 a piece. Only 40 percent of the company's revenue comes from supplying raw silk to other manufacturers.

"Silk is one of the world's most luxurious natural fabrics. I think the biggest mistake we have made is selling it at a low price. There is only one way to help silk find its way back to the Chinese woman's wardrobe make it a quality product that commands a high price," says Yu.

"We have the best silk in the world, and the largest population of potential silk buyers the increasingly independent and self-supported urban lady who chooses to put on a silk nightgown to please no one but herself. So all we need is a brand that makes, packs and delivers the dress to them in the right way," adds Yu, a single mother and self-proclaimed feminist.

Liu Wenquan, secretary-general of the China Silk Association, agrees that a shift in perception could be the way to give the industry a much-needed boost.

"Young people today view silk as something from their grandparents' generation or a relic in a museum. But that was the same thing with coffee. Half a century ago, few people drank coffee in China because many felt it caused insomnia. Just look at how well Starbucks is doing in China now," says Liu.


[Photo by Gao Erqiang/China Daily and provided to China Daily]

Market research suggests that Yu's approach could be right. According to McKinsey's 2017 China Luxury Report, Chinese luxury consumers spend more than 500 billion yuan annually and account for almost a third of the global luxury market. The report also said that around 7.6 million Chinese households purchased luxury goods in 2016, with each of these families spending an average of 71,000 yuan on such products per year.

"Although wealthy Chinese consumers have become more sophisticated, they remain cautious, needing reassurance about the quality and authenticity of their purchases," the report said.

"We found that these are the top two factors for selecting where they choose to make their purchase."