Against the backdrop of an intensified “internally cold and externally hot” situation in the industry, the China Sewing Machinery Association held a special online training on “Sewing Machinery Enterprises Going Overseas Compliance and Localized Operations” on June 10.
The training focused on four major sections: “Comparison of Diversified Overseas Business Models”, “Risk Analysis of Key Overseas Markets”, “Domestic and International Two-way Compliance Process” and “Localized Operational Risk Management and Control”.
At the meeting, industry experts reminded that the industry’s understanding of going overseas needs to be upgraded urgently. Exporting products does not mean that companies go overseas. Local operation capabilities are becoming the key to the success or failure of corporate globalization.
Industrial pattern reshaping, domestic demand shrinks and exports heat up
From the perspective of the global industrial landscape, China’s sewing machinery industry as a whole still maintains its leading advantage, with complete machine production capacity accounting for about 85% of the world, and there are nearly 300 enterprises above designated size.
But the industry is undergoing structural adjustments.
Data show that the total output of industrial sewing machines in 2025 will be approximately 6.25 million units, a year-on-year decrease of 8.76%; of which domestic sales will be approximately 1.65 million units, a year-on-year decrease of 29.7%, falling back to the lowest level in recent years.
In contrast, the cumulative export value of sewing machinery products in 2025 will reach US$3.986 billion, a year-on-year increase of 16.42%, and the export coverage of countries and regions will expand from 190 to 207.
This “cold inside and hot outside” situation is closely related to the transfer of downstream industries.
World Trade Organization data shows that China’s share of global apparel exports has dropped from 38.5% in 2015 to 29.6% in 2024, with Vietnam, Bangladesh, Indonesia and other countries becoming major production capacity recipients.
The domestic sewing machinery market has entered the stage of stock competition, and corporate profit margins continue to narrow.
“The situation faced by many companies is that they are receiving no less orders and making no less sales, but their profits are getting thinner and thinner. In the past, selling a piece of equipment made a profit on the product, but now it is often about protecting the market and customers.” Zhu Xuqi, senior partner of Dacheng Law Firm, pointed out that if the company relies entirely on the domestic market in the future, the development space of enterprises will become increasingly limited.
Wu Jiling, vice chairman of the China Sewing Machinery Association, said that the current layout of the global textile and apparel industry chain has entered a new round of adjustment, and the pace of domestic sewing machinery companies expanding into diversified international markets and setting up overseas branches has accelerated significantly.
However, regulatory requirements in key markets such as Vietnam and Bangladesh have become increasingly stringent in areas such as labor and employment, tax compliance, and intellectual property protection, and companies have an even more urgent need for professional risk prevention and control guidance.
This is also the direct reason for the association to organize this training.
Perception needs to be upgraded urgently. Going overseas does not mean “foreign trade”
However, although industry export data continues to grow, a common misunderstanding needs to be clarified: many companies talk about going overseas, but they are still talking about “exports”.
“The essence of foreign trade is to sell equipment overseas. When the customer places an order, the company delivers the goods, and receives payment, the transaction process is completed. But in the true sense, going overseas is far more than that.” Zhu Xuqi divides enterprises going overseas into five progressive stages: overseas products, that is, equipment exports; overseas services,
That is to establish overseas after-sales centers, parts warehouses and technical support teams; overseas capital means setting up offices, branches or subsidiaries; overseas industry means setting up factories overseas and laying out supply chains; the highest level is localized operations, which means having localized teams, management systems and brands to truly integrate into the local market.
This analysis framework is consistent with the practical paths of some leading companies.
Jack Technology has gradually formed a global layout from breaking into emerging markets and establishing a local service system to acquiring technology and brands through international mergers and acquisitions; Shanggong Shenbei has experienced a “triple jump” from product globalization, merger and acquisition globalization to production capacity globalization.
Zhou You, assistant general manager of the embroidery machine division of Beijing Dahao Technology Co., Ltd., said that many companies have stayed in the primary stage of “selling goods” for many years and lack systematic business thinking for overseas markets. “This is the bottleneck that restricts the improvement of the internationalization level of the industry.”
At present, Dahao Technology’s supporting electronic control products have been used in more than 70% of the global market, and it has established an overseas service network in 13 locations in 9 countries including India, Pakistan, and Vietnam.
“Dahao Technology will accelerate the move to the third stage of ‘localized in-depth operations’ on the basis of the first stage of ‘service network globalization’ and the second stage of ‘establishing a digital benchmark factory’. By deploying overseas smart factory management software, Dahao Technology will continue to invest in the direction of industry intelligence and digitalization, leaping from ‘outputting technical standards’ to ‘building a global industrial ecosystem.'” Zhou You said.
Five implementation models test “tailor-made” wisdom
Focusing on the practical issue of “how to get out” of enterprises, this training sorted out five mainstream implementation models: overseas warehouses, offices, branches, joint ventures and wholly-owned subsidiaries.
Zhu Xuqi suggested that enterprises should “tailor-made” according to their own development.
Small and medium-sized enterprises in the trial period can give priority to the “office + third-party overseas warehouse” model. After orders are stabilized, they can be upgraded to a branch and equipped with a spare parts warehouse. When the market size reaches a certain size, they can then consider establishing a wholly-owned or joint venture subsidiary.
Regarding the joint venture model, she specifically reminded that the main risk lies in shareholder disputes, and suggested that the joint venture agreement include a right of first refusal, a termination clause, and a deadlock resolution mechanism.
Looking back at the process of China’s manufacturing overseas, Zhu Xuqi summarized it into four stages: parts OEM overseas in the 1990s, goods overseas around 2000, channels overseas after the rise of cross-border e-commerce in 2010, and today’s “all factors overseas” – the export is no longer just equipment, but a complete set of industrial capabilities such as technology, brand, capital, talent, supply chain and service system.
She said that the sewing machinery industry is now in a new stage of “going global with all elements”. “The truly competitive companies in the future must not be companies that simply sell equipment, but companies that can export all their technology, services and industrial capabilities.”
The “Guiding Opinions on High-Quality Development of China’s Sewing Machinery Industry during the 15th Five-Year Plan” proposes to cultivate 3 to 5 internationally competitive industry leading enterprises worth 2 billion yuan.
The reporter noticed that the opinion also clearly listed “deep cultivation and overseas expansion” as the strategic direction of the industry.
Wu Jiling said that the association will continue to build a professional learning platform and regularly launch training services on foreign trade, compliance, overseas operations and other topics to help sewing machinery companies steadily expand the international market.
