As the retail climate worsens, many Western clothing chains are seeking to cut costs by outsourcing design elements to their suppliers in emerging market countries. But how reliable are local design skills, and is there a big enough pool of local talent in countries like China and India for the big brands to shift creative aspects of their operations overseas as well as basic production?

Chinese factories are increasingly interested in designing their own garments, but making a profit from their designs is proving to be a challenge.
 
For years Chinese factories have simply produced according to designs sent from abroad, but of course this is a costly and time-consuming process.

They have often needed to make two or three samples before the right design, fabric and accessories are achieved and this exchange of sketches and samples can take up to three weeks, too long for an industry working to ever tighter lead times.
 
"We'd prefer buyers to send their designers to the factory to select the fabrics and discuss the design," said George Min, manager of New Wide Group's China factory, which supplies Kohl's and Wal-Mart.

"We would shorten communication time and reduce the mistakes. Sometimes the sketches mention accessories but we don't really know what they mean."
 
Now higher production costs in China and weakening demand in the West are forcing many factories to invest in their own design capacity.

High-value products
Paul Zheng, general manager at Beijing Guanghua Textile Group, wants to hire European designers and reduce dependence on big orders from the US.

"We're trying to export more to Europe so we need to know the European trends better. And if we want to do more high-value goods, they have to be more fashionable," he told just-style.
 
He expects demand for designs out of China to increase.

"As the retail climate gets worse, many retailers will be cutting their budgets. They won't want to take care of everything and will be looking for ready-made products from the supplier."
 
But he does not yet know how much money he has to invest to switch his firm to full package manufacturing.

Ahead of the trend
Only a handful of Chinese factories ahead of the trend have sold their own designs for the last few years.

Fujian-based children's clothes maker RedKids says full package manufacturing for brands like Osgood and France's Okaidi generates half of its total revenue.

Shanghai-based Newel Apparel makes 80% of its sales from its own designs for brands like H&M, Zara, Next and Esprit.
 
But owner Tony Zhang said this process, which he calls 'ODM', or original design manufacturing, requires substantial investment. "Sure, the mark-up on this is higher but our business expenses are also much higher."
 
Zhang's South Korean designer earns EUR3,000 (US$4,726) per month, with an additional 2% commission, more than 10 times the salary of an average factory worker.

She leads his team of three, using her greater exposure to fashion trends to guide the local designers on new collections, displayed for buyers at the firm's Shanghai showroom. 
 
"At the moment, we're just breaking even," said Zhang, adding that many buyers are "using their leftover budget to buy our designs" rather than sourcing a whole range from Chinese designs.
 
Chinese companies still need help from their customers to bring designs to the market. Zhang's clients send trend reports and guidelines on their price points to help his team, but most local designers find it hard to understand Western fashion.
 
"If we want to get to the world stage, we have a long way to go," he said. "We need to train more people and import more professors from Europe."
 
India includes design
Meanwhile, in India, as in China, with garment production moving away from developed countries, local companies have also started offering a full package service that includes designing.

"For past few years importers are accepting designs fabricated in India," said Sambasivam Sivanathan, secretary of the textiles and garments exporters association of Erode, a major textile production centre in south India, "though foreign designers still visit us twice a year during sampling time, but are now playing more of a supportive role of giving broad ideas to the local designers."

Almost the same pattern is followed, though in a reverse order, by Spykar, a Mumbai-based garment company, which has recently started marketing products under its own brand name in UK and Australia.

The company hire experts in these countries to assist its Indian design team. "This local talent directs the designs and the Indian designers execute them," Sanjay Vakharia, Spykar's marketing director told just-style.

The Indian designers working for Spykar are all qualified from professional institutes such as the National Institute of Fashion Technology, which has eight centres across the country.

Sivanathan agreed that the local designers are well trained and are improving fast, but they cannot match the expertise of foreign designers, who, according to him, would always have a better grip on the customers' choice.

"Indian designers are not used to crazy designs like the ones sent to us by the importers," Sivanathan told just-style.

According to him such designs are those which have "tone-cloth patch, inside-out bedlock, overlock and bedlock on the outer side and wrong prints."

Vakharia described the Indian designing industry as "quite nascent" and said that local designers lack international exposure.

However he agrees that they are adapting well to the new situation. "I do not think that there will be an issue of Indian designers not standing up to international standards," he added.

The big international brands still prefer to control the design of their garments remotely.

"Small clients are much more cooperative and flexible in designs and delivery schedule and at times even offer better price," said Sivanthan.
 
By Dominique Patton, in Beijing; and Raghavendra Verma, in New Delhi.

This article complements another feature on just-style which looks at how design talent in the developed world is falling short in managing the demands of international outsourcing: 'Apparel industry training falls short on sourcing skills'.