A Study Of D Apparel’s Asset-light Operation Model And Its Effects

The development of the garment and textile industry had been playing an important role in China’s development of the economy,but because of the low cost of Chinese labour and the slow start of the modernization of the Chinese garment industry,Chinese companies have long played the role of international OEMs.This has kept the Chinese garment industry in a vicious circle of low-price competition for a long time,with no room for enterprises to improve their design level and brand image.In the meantime,with the growth of the disposable income per capita,consumers’ requirements for clothing have gradually shifted towards an emphasis on fashion,culture and branding.Along with the deepening of economic globalisation and the continuous opening of Chinese society,more and more mid-to high-end foreign brands are entering the market,further limiting the viability of domestic apparel companies.In the face of this challenging market environment,China’s garment industry needs to transform and upgrade.As a business model with high added value as its core,the asset-light operation model outsources production links in the value chain that have high operating costs and low profits,and invests more resources in product development and design,brand building and marketing and promotion,thereby reducing long-term capital investment such as fixed assets,improving operational efficiency,creating more wealth for enterprises and shareholders,and enabling enterprises to maintain an advantageous position in the fierce market competition.This will reduce long-term capital investment such as fixed assets,improve operational efficiency,create more wealth for enterprises and shareholders,and enable enterprises to maintain an advantageous position in the highly competitive market.This paper takes D Apparel,a high-end apparel company in the apparel industry,as an example,and studies its asset-light operation model and its effects on the basis of smile curve theory,value chain theory and the resource-based theory.The article first summarises the relevant concepts and introduces the theoretical foundations,then adopts a case study approach to analyse the implementation strategies and financial characteristics of the company’s asset-light operating model.The study also analyses the company’s non-financial performance in terms of its R&D and innovation capabilities,marketing channels and brand promotion capabilities,and effectively evaluates the overall effectiveness of the company’s asset-light operating model.The study found that with the imposition of the asset-light operating model,D Garments has freed up more labour through long-term outsourcing of production,giving the company the energy and ability to invest in higher value-added segments,creating a unique brand presence and giving the company an advantage in terms of profitability and solvency compared to similar companies.However,some shortcomings in the company’s operation were also identified,for which recommendations were made to strengthen inventory management and increase investment in research and development;optimise the asset structure and improve capital utilisation;rationalise the marketing layout and promote joint development of multiple channels;strengthen communication with suppliers and maintain a stable cooperative relationship,which provided some insights for future enterprises in the same industry to implement an asset-light operation model: enhance the design capability and strengthen the enterprise The suggestions include enhancing the core competitiveness of enterprises;attaching attention to brand building to improve the market influence of enterprises;strengthening supply chain management and selecting high-quality suppliers.