Can Youngor Find the Motivation to Go Global for a 'Second Venture'?

Consumer Staples Author: Notrice Aug 25, 2023 06:06 PM (GMT+8)

Ningbo Youngor Group, commonly known as Youngor(雅戈尔), is a prominent Chinese conglomerate primarily engaged in the clothing sector. Founded in 1979 and headquartered in Ningbo, Zhejiang, the company has gradually expanded its operations beyond textiles to include fashion, real estate, finance, and cultural creativity.


Currently, Youngor stands as a leading brand in high-end fashion apparel, holding the number one position in the national market for men's shirts for 26 consecutive years and men's suits for 23 consecutive years. The company boasts 1,994 directly operated retail stores nationwide and manages 2,210 commercial outlets for its various brands.

In the '2023 China Top 100 Multinational Companies' ranking, Youngor secured the 64th position with a 29.65% multinational index. How has Youngor evolved from an obscure small workshop into a leading multinational corporation over its 44-year journey?"

Forty Years of Trials and Triumphs: From Small Workshop to Industry Leader

Throughout its more than 40-year history, Youngor has grown steadily, primarily relying on making the right business choices at different stages of its development.

1979-1992: Formation of the Brand and Shaping Brand Strategy Youngor's predecessor, Youth Clothing Factory, was established in 1979. In 1983, it introduced its first brand, "Beilungang."(北仑港) In 1990, Youngor formally introduced foreign investment, establishing a joint venture brand, Youngor, and importing advanced equipment. This marked the beginning of the "high starting point, high investment, high technology" three-high brand strategy. In 1991, Youngor was honored with the title of "China 's Well-known Trademark," one of only two companies to receive this distinction that year.

1993-1997: Transition to a Joint-Stock Company and Diversified Investment Starting in the 1990s, Youngor began to mobilize the enthusiasm of producers, operators, and investors, diversifying into other fields. In 1992, Youngor entered the real estate development sector. In 1993, Youngor entered the investment field and experienced explosive growth through investments in finance, resource-based enterprises, and industry leaders.

1998-2007: Listing and Rapid Business Expansion Under the leadership of the company's founder, Li Rucheng(李如成), Youngor achieved significant growth. In 1998, Youngor was listed on the Shanghai Stock Exchange, marking a new phase in international integration. In 2001, Youngor International Garment City(雅戈尔国际服装城) was completed, becoming the largest domestic clothing manufacturing base. In 2004, Youngor Textile City(雅戈尔纺织城) was completed, becoming a crucial high-end textile fabric production base domestically. This established an operational model encompassing upstream textiles, midstream clothing production, and downstream sales, breaking through raw material constraints and enhancing the competitiveness of its flagship products.

2007-Present: Diversified Expansion and Building a Transnational Comprehensive Business Model In 2007, Youngor acquired Smart-Shirts, entering the stage of transnational operation. Subsequently, Youngor continued to engage in overseas investments and acquisitions to enhance its international influence. In 2008, Youngor established Vstone Investment Management Company(凯石投资) in Shanghai, and in 2009, it established Youngor Dresses Holdings Company(雅戈尔服装控股) and Youngor Real Estate Holdings Company(雅戈尔置业控股公司). These moves constructed a diversified business model and increased the group's risk resistance capabilities.

Building a Brand Portfolio Through Overseas Acquisitions: Expanding Business Horizons

Brand consciousness has always been a cherished value in Youngor's development process. In 1990, Qingchun Clothing Factory(青春服装厂) and Nam Kwong (Group) Company Limited jointly established a partnership and created a brand name 'Youngor,' a homophonic translation of '青春' (youth) in English. For the group's main brand, Youngor has kept pace with the times by enhancing design and material taste, strengthening craftsmanship, and continually enriching brand connotations, deepening consumers' perception of its high-end image.

In its journey towards global expansion, Youngor has established partnerships with overseas brands through joint ventures, acquisitions, and other forms, continuously strengthening its global brand portfolio. This expansion has enriched its product lines and driven the internationalization of its main brand. In 2014, Youngor acquired the brand operating rights of the American suit brand Hart Schaffner Marx in China. In 2021, it established a partnership with the Norwegian outdoor brand Helly Hansen, helping it re-enter the Chinese market. In the same year, Youngor acquired the American streetwear brand Undefeated, establishing a joint venture in the Greater China region. In 2022, Youngor Group also invested in Chinese designer Alexander Wang, the cross-border brand Slashop, and the high-end furniture retailer Canaba, expanding into broader geographical spaces, more diverse product categories, and innovative retail models.

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In order to solidify its position in the high-end business sector, Youngor has engaged in deep collaborations with five major international fabric suppliers (Zegna, Loro Piana, CERRUTI1881, ALUMO, ALBINI), achieving the integration of the global industrial chain. Against the backdrop of consumer upgrading and an elevation in creative aesthetics, Youngor has also launched the INNOVATION 100 platform, a global fashion design innovation incubator, aimed at discovering outstanding designers worldwide and enhancing industry influence.

Currently, Youngor has established a brand system that covers all age groups and price segments. Through its 'All Categories, All Scenarios, All Age Groups, All-Around, and All-Channel' five-pronged approach to brand operation, Youngor is creating a national brand that represents 'Chinese Quality.'

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Continual Breakthroughs in Core Technology, Driving Collaborative Efforts Across the Industry Chain

Youngor's sustainability and enduring success are a result of the synergy between enhancing autonomy in critical aspects like research and development and establishing industrial collaboration mechanisms. As Jiang Yuxin(蒋裕鑫), the Director of Youngor's Suit Category, once stated: 'Only when every link in the industry chain collaborates effectively can we achieve continuous technological upgrades and iterations. From the origin of cotton cultivation to the production line, and finally to the end of the sales chain, Youngor Group works closely together to drive the continuous improvement of our products.'

In 2018, Youngor conducted a comprehensive integration and upgrade of its fabric development center, leading to the establishment of the present-day Youngor Textile Materials Research Institute. This institute has received qualifications such as National Recognized Enterprise Technology Center and National Postdoctoral Research Workstation, making it a crucial hub for technological innovation within Youngor. Additionally, Youngor has established close collaborative relationships with domestic and international academic institutions, including the CITISA(国家高值特种生物资源产业技术创新战略联盟), Donghua University(东华大学), Hong Kong Polytechnic University, among others.

In the same year, Youngor invested over CNY a hundred million and collaborated with China Unicom(中国联通) to create Zhejiang Province's first batch of 5G+ 'Future Factory,' solidifying its status as a benchmark enterprise in smart clothing manufacturing.

Continuous innovation in fabric technology is the key to controlling the supply chain of raw materials. Dr. Wang Qingmiao(王庆淼) from Youngor Research Institute pointed out that Youngor's flagship product, wrinkle-free shirts, and the Hanma material textiles with natural antibacterial properties are all research achievements based on mastering supply chain technology. The antibacterial Hanma wrinkle-free products, through processes like de-gumming, spinning, liquid ammonia treatment, and enduring wrinkle-free treatment in the finished garment stage, have overcome the bottlenecks in the textile and dyeing technology industry, making Hanma, a natural plant material, suitable for high-end fabrics in the fine series.

Since 2018, Youngor has invested a cumulative total of CNY 8 billion in the fashion industry. In the post-pandemic era, it has invested a cumulative total of 5 billion yuan, spanning various aspects such as smart manufacturing, intelligent marketing, smart logistics, and brand construction, extending its capabilities both vertically and horizontally across the industry.

Struggling for Recognition Abroad: Youngor's Long and Challenging Path to Globalization

From the extensive acquisitions and investments in overseas fashion brands in its earlier stages, Youngor appears to have made significant progress on the path to internationalization. However, it still falls short of being considered a truly global enterprise, with substantial gaps in terms of overseas recognition and revenue when compared to international counterparts.

Many clothing conglomerates, including Youngor, have sought to enhance their international presence through overseas mergers and acquisitions. However, in the absence of a strong influence from their main brands, these efforts often seem more like a 'convenient' choice—where anything can be bought with money. The greater challenge for these companies lies in how they can effectively integrate resources and incorporate the influence of high-end brands into their own operations after overseas acquisitions.

Well-established clothing enterprises such as La Chapelle(拉夏贝尔), Semir(森马), Ruyi Woolen Garment Group(如意集团), and others have faced difficulties in adapting to foreign markets after large-scale overseas acquisitions. In fact, La Chapelle, once dubbed 'China's ZARA,' even went bankrupt after its acquisition spree.

Youngor's Official Instagram Profile Page

Furthermore, adapting to localization in overseas markets is one of the challenges that Youngor faces. Consumers in different countries have increasingly diverse preferences for fashion, quality, and even emotional attributes. Simply exporting existing products and brands beyond national borders may no longer ensure that a brand receives sufficient attention and recognition in highly competitive environments. According to EqualOcean's research on overseas social media platforms, Youngor's Instagram account lacks in terms of follower count and engagement.

The adjustment in the global supply chain structure has also had a profound impact on China's textile and clothing industry. The clothing industry has long been a strong category among China's exported goods. However, with the rise of textile industries in other countries such as Vietnam, India, and Bangladesh, Chinese clothing companies, including Youngor, may face competition not only in the high-end segment but also in the mid to low-end market when expanding internationally.

The commitment to the path of branding and globalization is not just a slogan but a strategic imperative that large Chinese enterprises must elevate to their top priorities in the current landscape.

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