Key Part of Partnership: Hustle
September 4, 2006,
In 2003, many manufacturers exhibiting at the Intertextil Shanghai home textiles fair hung posters describing their factories and listing the prestigious U.S. retailers that carried their goods. In conversation, however, it turned out that the retail relationship was a matter of selling a single sku through a trading agent to a U.S. supplier who actually had the retail account.
In 2005, many manufacturers exhibiting at Intertextil Shanghai had realized after a few months of quota-free living that “they” don't simply turn up at the front gate with orders in hand. One has to go hustle for that business. But OEM was very much a favored strategy. The customer's role: design, spec, market, distribute. The manufacturer's role: manufacture.
Last week, several manufacturers exhibiting at Intertextil Shanghai had clearly woken up to the fact that an OEM operator is only as good as his pricing, in a universe replete with shiny new looms. They talked about investing more in R&D, bulking up their design teams, acquiring brands — and looking for partnerships with U.S. accounts.
The partnership sentiment reminded me of the 2001-2004 period, when several manufacturers from India and Pakistan — having waded into the U.S. market — suggested the urgency of forming business pacts. Major American suppliers at the time characterized such offers as a sneaky scheme by offshore companies to steal their customers away. The name of the game in the United States was DEFENSE! and the rebels at the gates were not to be invited in to tea.
That turned out real well, didn't it?
In 2006, many manufacturers exhibiting at Intertextil Shanghai — American execs, Chinese-American execs and Chinese execs — expressed this sentiment: “If your business doesn't have boots on the ground in key markets, and sufficient numbers of them, you're apparently planning to retire.”