Guangzhou's manufacturing is shifting to original creations, focusing on cultural elements and intellectual property to enhance global competitiveness. Atlas Shao reports from Guangzhou.

Henney Bear — an adorable "bear" designed by a Guangzhou leather company — has become a popular intellectual property exported to over 80 countries and regions, along with bags designed with Chinese elements.

The product, costing $100 in overseas markets, is registered in countries and regions worldwide with 42 national patents and 63 copyrights.

The establishment and success of Henney Bear marks the epitome of the leather-manufacturing business in the capital of Guangdong province, and its original design has made great progress in generating international labels.

Guangzhou Guxiou Leather Goods Co Ltd — a leader in bag and leather goods manufacturing — started off in 2008 in Guangzhou's Shiling town, Huadu district, known as China's "leather capital" and famed for its leather goods.

The company has shifted from original equipment manufacturing (OEM) services for global customers to launching its original products that are exported to over 30 countries and regions, including Mexico, Argentina, Japan and Thailand.

For a well-performing market like South America's, Guangzhou Guxiou offers new products monthly, while for the European market, new products are launched every six months.

Along with steadily growing sales, the company plans to tap markets in the Middle East.

Shiling town produces 700 million products annually, and attracts over 500,000 leather merchants from around the world each year to purchase goods.

"Starting with OEM services, this traditional market is exploring new opportunities with original products, and there has been positive feedback from overseas clients," says Stone Chen Yanrong, Guangzhou Guxiou's brand manager.

Embracing originality

He says that although Guangzhou is renowned for OEM services, original brands and designers have gradually emerged and become prominent in recent years. The market highly values differentiation and brand equity.

Chen specifically refers to two of the company's original IPs — Henney Bear and Janet Denese, featuring a bear and an adorable little girl, with both having gained popularity in European and North American markets.

He says the design team is collaborating with overseas designers to create brand localization through targeted development.

In the South American market, they have incorporated ancient Mayan cultural elements into products, while in the European market, ancient Greek architecture elements are integrated.

The significant financial investment required to create original brands, which could be the main stumbling block, has discouraged merchants from doing so, Chen says.

In contrast to producing original products, OEM can bring rapid benefits. Yet pursuing originality is necessary and inevitable, he says. Products with originality allow the company to create more room for creativity than OEM services do, whereas the design and production must strictly follow clients' needs.

Most of Guangzhou Guxiou's customers are from overseas, with annual exports exceeding 600,000 products.

Strengthening originality is also a form of cultural exportation, a process of promoting the country's traditional cultural symbols to the world, Chen says.

To foster originality, the Genuine Leather Mark Award has been hosted by the China Leather Industry Association and other organizations for over two decades. Chen, who was among the judges in the last edition, says domestic original works had in the past often unconsciously copied or imitated international brands.

But they have shown bolder creativity and cultural confidence in recent years, with many adopting Chinese elements and aligning with Chinese aesthetics.

Adding to originality are Guangzhou's comprehensive advantages in the leather and apparel manufacturing industry, including well-developed markets for raw and auxiliary materials, manufacturers and hardware accessories.

Streamlined production

Chen says goods production in Guangzhou can be completed in a one-stop process. Factories, big or small, are able to pick up market demand swiftly and then promptly coordinate with supply chains to come up with new production lines, thanks to years of experience in manufacturing and a full-fledged production chain.

In contrast, he says, business peers who have relocated to countries like Myanmar and Cambodia might face delays of about one to two weeks when tackling minor issues such as sourcing materials, thereby impeding progress in production.

Many second- and third-tier international brands have their OEM business concentrated in Guangzhou, thereby, promoting leather factories in Guangzhou to hone their production skills to stay competitive, Chen says.

Balancing market demand with brand distinctiveness, and preventing plagiarism also present major challenges for companies creating original products.

Chen says that despite the high costs of trademark registration, it's an inevitable process. Guangzhou Guxiou has invested more than 5 million yuan ($689,000) in intellectual property rights, and has persisted in doing so to better protect its original IP and avoid facing greater barriers when making forays into overseas markets.

Besides enhancing originality, enterprises should ensure that they make timely trademark applications for intellectual property protection, he says.

In addition to bags and leather goods, the clothing industry — a traditionally dominant sector in Guangzhou — has injected a fresh impetus into the business through digitalized management.

Jiang Baochang, general manager of Guangzhou Liuhua Fashion Wholesale Market — one of the most extensive wholesale clothing markets in China — says the market has established a B2B clothing wholesale platform, LiuHuaMall.com. The English-language platform aims to help small- and medium-sized merchants capitalize on the dual advantages of online and offline channels, particularly in product procurement and cross-border e-commerce. Through this website, clients can easily find useful information about popular clothing suppliers and wholesale clothing trending categories.

The transactions facilitated by LiuHuaMall.com have proved to be effective. Since the channel's inception, business has continued to grow, reaching 200 million yuan last year. Currently, it's doing business with merchants from more than 90 countries and regions.

Jiang says originality is the key for businesses to stay ahead of the game, as original products are more attractive to buyers and come with stronger bargaining power in pricing.