An article about Coach

midamimi

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Mar 9, 2011
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An article about Coach.

http://blogs.reuters.com/george-chen/2011/10/24/designed-in-new-york-made-in-dongguan/


Designed in New York, made in Dongguan

By George Chen OCTOBER 24, 2011

The opinions expressed are the author’s own.

It could be the perfect story to show how China Inc and its American partner can work together for a win-win result, but Chinese consumers are having second thoughts on this.

Earlier this year, upscale U.S. handbag and accessory maker Coach said it planned to list in Hong Kong to reflect the growing importance of China’s luxury market. Coach didn’t give a timeframe for the IPO plan, but one thing is fairly certain – before Coach launches its IPO, its local partner in the small city of Dongguan, near Hong Kong, will aim to rise $200 million first.

The company, Sitoy (Dongguan) Leather Products has hired Bank of America-Merrill Lynch for a Hong Kong listing by the end of November. In IPO marketing materials distributed to potential investors, Sitoy described itself as the largest handbag OEM (original equipment manufacturer) in China, although it didn’t name any of its clients.

(Note: I edited the weblink to the correct address)

However, Chinese netizens quickly found out from the company’s website (www.sitoy.com) that one of Sitoy’s OEM clients is Coach, a New York-based brand popular among China’s fast-growing middle-class. In China, Coach prices are far lower than those for top-tier brands such as Louis Vuitton and Gucci, although it is still considered a luxury brand among consumers in the world’s No.2 economy.

“Why not buy expensive Caoch bags directly from the Dongguan factory? I believe the cost must be very cheap,” said one Sina Weibo user in response to the news. Foreign brands — not only luxury fashion brands but also consumer electronic makers — have many OEM partners in China, although they are often reluctant to identify them to avoid such unsatisfaction from local customers.

In a company newsletter dated May 31, published on Sitoy’s website, the top headline is about senior executives of Coach visiting the factory and expressing satisfaction with Sitoy’s products for Coach. It’s now seems likely that at least some of Coach’s handbags are designed in New York but manufactured in Dongguan.

Coach was already in trouble after Chinese media pointed out that Coach handbags are much more expensive in China than they are in the United States, sometimes with a difference of hundreds of U.S. dollars. When the news about the OEM factory in Dongguan started circulating on China’s Twitter-like micro-blogging service Sina Weibo, some consumers felt they had been cheated after spending thousands of yuan on a bag that was probably made in Dongguan, a city whose reputation is usually linked with cheap labor costs.

On Sitoy’s website, the company expresses pride in being an example of the small city’s success as the world’s factory for shoes, garments and so on. Sitoy is in a position to list in Hong Kong, largely thanks to cheap labor costs and strong OEM demand from global clients such as Coach. But the case of Sitoy and Coach that is causing such frustration among Chinese consumers also raises the question of how luxury brands can keep selling at high prices while reducing costs.

Other fashion and leather brands including Salvatore Ferragamo and Burberry have said they do not plan to manufacture products in China, although Burberry has chosen other countries such as Turkey to make some low-end products such as T-shirts.
 
Feb 26, 2006
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Interesting. I imagine that even the Coach products sold in China are labeled as being made in China, so how come it took Chinese Coach buyers so long to figure out that they were being charged a premium for products produced using low-cost labor? American consumers have been cognizant of that fact for ages.
 

knightal

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Jun 6, 2010
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A little googling turned up that Sitoy also makes bags for Prada, MK, Tumi, Fossil and Lacoste. I assume there are no differentiations in workmanship and materials among these brands. We are just paying for the brand name?
 
Feb 26, 2006
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A little googling turned up that Sitoy also makes bags for Prada, MK, Tumi, Fossil and Lacoste. I assume there are no differentiations in workmanship and materials among these brands. We are just paying for the brand name?
Wow, Prada? I didn't even know Prada made products in China. The only brands of these two I have own are Fossil and Coach. Fossil bags seem well made for their price point. MK and Coach bags seem similar in quality to me. As for Prada, I guess we really are paying the brand name in that case.

Sitoy has a website in English. Nice pictures of some of their products and their facilities: http://www.sitoy.com/En/index.html
 

momtok

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Well, I guess some Prada bags are made in China now. I'll be damned. http://forum.purseblog.com/prada/prada-bags-now-made-china-italian-made-prices-665067.html
Burberry makes things in China too now. (So in that, the original article is wrong, though the original article is almost three years old.)

If you pay close attention to Burberry's listings on their website, or on department store websites, some bags will say "made in Italy", while some will say "imported". ...... Well isn't something made in Italy also "imported"? Answer: yes. But the ones actually listed as "imported" are usually because they don't want to say made in China. If I recall correctly, some of their Nova Check bags were made in China, for example. I know this because I've long thought about getting something Haymarket (slightly different than Nova Check ... Haymarket has the knight which I think is cool), and noticed this quirk. And if there's any doubt that it's China, simply do searches on yoogis (including already sold items), and start looking at their pictures. They include plenty of pictures of the Made in China tag in various Burberry bags.

Also, it might possibly be a jump to assume that everything 'Sitoy' (or any factory) makes is made of the same materials. The designer companies could easily be providing their own materials, while the factory supplies the manpower.

Disclaimer: I have no problem with made in China. My daughter was 'made in China', and I think she's pretty darn cool too. ;)
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CharliLuvsCoach

AccessoryWhore
Sep 2, 2013
637
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Also, it might possibly be a jump to assume that everything 'Sitoy' (or any factory) makes is made of the same materials. The designer companies could easily be providing their own materials, while the factory supplies the manpower.

Disclaimer: I have no problem with made in China. My daughter was 'made in China', and I think she's pretty darn cool too. ;)
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I agree on the materials. Presumably, the original company is providing the factory with materials. There is a big difference in say, Coach Saffiano and MK Saffiano. Not a bad difference, but the MK is stiffer and heavier that the Coach. I like Coach's better as it seems the pattern is smaller as well. My mom loves the MK because it is heavier and stiffer. The Burberry stuff would also have to be different materials as well, obviously. The original company would also have to provide the specs for the bags, etc. so Sitoy is likely just putting the bags together rather than dying the leather, making the fabric, etc. and also putting them together.

PS I think your comment about your daughter being "made in China" is really awesome! :biggrin:
 
Feb 26, 2006
8,963
1,339
WI, USA
Burberry makes things in China too now. (So in that, the original article is wrong, though the original article is almost three years old.)

If you pay close attention to Burberry's listings on their website, or on department store websites, some bags will say "made in Italy", while some will say "imported". ...... Well isn't something made in Italy also "imported"? Answer: yes. But the ones actually listed as "imported" are usually because they don't want to say made in China. If I recall correctly, some of their Nova Check bags were made in China, for example. I know this because I've long thought about getting something Haymarket (slightly different than Nova Check ... Haymarket has the knight which I think is cool), and noticed this quirk. And if there's any doubt that it's China, simply do searches on yoogis (including already sold items), and start looking at their pictures. They include plenty of pictures of the Made in China tag in various Burberry bags.

Also, it might possibly be a jump to assume that everything 'Sitoy' (or any factory) makes is made of the same materials. The designer companies could easily be providing their own materials, while the factory supplies the manpower.

Disclaimer: I have no problem with made in China. My daughter was 'made in China', and I think she's pretty darn cool too. ;)
.
Outside of the obvious objections such as China's human rights record and low wages for workers, I don't have too much issue with made in China as long as the craftsmanship is good. I find it funny how some of the posters in the Prada thread I posted expressed distaste for the Coach's made in China goods, and it turns out that Prada and Coach are using the same factory.
 

Kellyanh

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Jun 16, 2014
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Yes, many late pieces of prada has been made in chains that's how why I'm reframing from prada. Also, I believe that burberry are part of the china production as the burberry watches are made by fossil which I just found out recently so I'm also contemplate about the bags too.
 

momtok

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Aug 21, 2009
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I agree on the materials. Presumably, the original company is providing the factory with materials. There is a big difference in say, Coach Saffiano and MK Saffiano. Not a bad difference, but the MK is stiffer and heavier that the Coach. I like Coach's better as it seems the pattern is smaller as well. My mom loves the MK because it is heavier and stiffer. The Burberry stuff would also have to be different materials as well, obviously. The original company would also have to provide the specs for the bags, etc. so Sitoy is likely just putting the bags together rather than dying the leather, making the fabric, etc. and also putting them together.

PS I think your comment about your daughter being "made in China" is really awesome! :biggrin:

Quote: PS I think your comment about your daughter being "made in China" is really awesome!

The feeling is mutual.
Heh. Thanks ladies. ;) She's actually from Guangdong province as well, which I gather is where Sitoy is. I need to pull up a map and look up the towns listed for Sitoy.

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Outside of the obvious objections such as China's human rights record and low wages for workers, I don't have too much issue with made in China as long as the craftsmanship is good. I find it funny how some of the posters in the Prada thread I posted expressed distaste for the Coach's made in China goods, and it turns out that Prada and Coach are using the same factory.
I do agree with that. I think (or I would like to think) that this is starting to improve with China's recent modernization. As a country, it's coming of age very fast. I've also heard (though I can't recall exactly where) that an increase in the wages of Chinese labor is the reason that a lot of stuff is now being made in Vietnam. And Coach has followed that trend, if you watch the MFF items. In the last year or two, I've noticed a surprising number of MFF items with Vietnam tags in them. ... I wish I could remember where I saw it .... it was essentially an article that said that China was becoming more expensive, and Vietnam was becoming the new place for "cheap labor".

But yes, I agree China needs to continue improving on the human rights, but I'm hopeful that they'll continue in the right direction. I do know it's a far cry from the nineties.
 

momtok

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Actually, I just did a google news search, and the first thing that popped up was a Time article from 2011

http://content.time.com/time/world/article/0,8599,2081532,00.html

Title: Abandoning China: In Search of Cheap Labor, Businesses Turn to Vietnam

A quote:

In the southern Chinese city of Shenzhen, workers went on strike, picketing in front of the factory gates of foreign-owned companies. "But things have been getting better," says Qiang Li, founder of China Labor Watch (CLW), an American non-governmental organization. He estimates that in those factories, 85% of workers got a pay raise in 2010.

Qiang Li says pressure put on wages has had a "noticeable" impact: factory workers earn $141 a month, a 21 percent pay hike over one year. Still, Li thinks that "the working conditions are often unacceptable."

More and more Chinese and international companies have been turning to southeast Asia, Vietnam in particular, in search of cheaper labor. In Vietnam, the minimum wage does not exceed $85 a month in the large manufacturing zones.
 
Feb 26, 2006
8,963
1,339
WI, USA
Actually, I just did a google news search, and the first thing that popped up was a Time article from 2011

http://content.time.com/time/world/article/0,8599,2081532,00.html

Title: Abandoning China: In Search of Cheap Labor, Businesses Turn to Vietnam

A quote:

In the southern Chinese city of Shenzhen, workers went on strike, picketing in front of the factory gates of foreign-owned companies. "But things have been getting better," says Qiang Li, founder of China Labor Watch (CLW), an American non-governmental organization. He estimates that in those factories, 85% of workers got a pay raise in 2010.

Qiang Li says pressure put on wages has had a "noticeable" impact: factory workers earn $141 a month, a 21 percent pay hike over one year. Still, Li thinks that "the working conditions are often unacceptable."

More and more Chinese and international companies have been turning to southeast Asia, Vietnam in particular, in search of cheaper labor. In Vietnam, the minimum wage does not exceed $85 a month in the large manufacturing zones.
Talk about being cheap! Eventually, they'll have to pay the Vietnamese workers more, and then I guess they'll be hunting around for another place to exploit people.
 
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