Little did Zhao Jiahua imagine that when he first left his state-run company at the beginning of the nineties to help set up Shanghai Yihua Industry Co. Ltd., that 25 years later he would head up merchandising at one of the Otto Group’s largest suppliers with factories not only in Shanghai, but also in inland China, and, as of this year, in Cambodia.
Evolving over time
Shanghai has changed immensely since Yihua was first founded there as a factory producing ladies’ coordinates. From a production factory solely manufacturing styles provided by their European customers, Yihua has evolved into a multi- locational enterprise providing fashion input in terms of fabrics and styling to their customers, and producing garments to suit every quantity and budget. The days of Shanghai as a very low cost manufacturing centre are long gone, and whilst Yihua continues to produce smaller quantities and complicated styles in their Shanghai factory, manufacturing has now shifted inland into Anhui province to profit from lower wage costs and a higher stability of the workforce, as the factory staff all live locally. Earlier this year Yihua opened their new Fashion Centre in Shanghai, a valuable resource providing the latest fashion fabrics and styles for European buyers.
The Cambodian factory is the latest project – with over 500 workers on the outskirts of the capital, Phnom Penh. Set up six months ago to profit from duty preferences enjoyed by South-East Asia production on merchandise entering the EU market, the factory is managed by 12 skilled staff from the Shanghai factory. These staff are in Cambodia on two year contracts and regularly travel back to China to keep in contact with their families and report to headquarters.
A long term partnership
The Otto Group is looking seriously at placing some Never Out of Stock programmes with Yihua in Cambodia and we are pleased to support our long term strategic partners, Shanghai Yihua, as they strive to secure the best possible quality at the lowest possible price for our group.