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to less developed countries, resulting in the decrease of the mass retailers (e.g., Walmart, Target, Kohl’s, Sears, Kmart ),
number of buying offices/agents in Korea in late 1990s-2000. branded manufacturers (e.g., Hollister, GAP, Banana Republic,
Thus, we would like to find our what are the roles of buy- Liz Claiborne, Abercrombie & Fitch, , Osh Kosh Babies,
ing office in Korea in todays’ global apparel sourcing industry: Gymboree, Justice, Aerospotale, Adidas, Tommy Hilfiger,
do they have any competitive advantages for the future? Express) and fast fashion companies (e.g., Uniqlo, ZARA,
In-depth interview was conducted to explore the role of buying Mango)
office in Korea under this very competitive global apparel As of late vendors are improving their competitiveness so
sourcing industry. Also, the working process of buying office that they can execute one-stop orders through vertical in-
and their strategies to have competitive advantage in a global tegration of not only sewing but also textile and printing mills
sourcing industry were investigated. For this purpose, merchan- as well as production, pressing, and packing factories. They al-
disers and managers from Korea branch of foreign-based so form a R/D team in the firm not only technological re-
Buying Office, including Mast Industries (Far East) Ltd., search and development but are also gaining strength in design
Tween Brand Sourcing Korea, and Li and Fung Korea, and trend analysis and design. Through these changes one can ob-
former employees of Korean independent buying offices were serve how vendors changed from the manual role of merely
interviewed. Managers from major vendors in Korea, including receiving the order and producing it, to a more proactive role
Youngone Holdings, Hansoll Textiles Ltd. were also partici- of making suggestions on new ideas, designs, and product
pated to provide insight on the working relationship with buy- developments.
ing offices. As vendor has gained experience producing buyers’ orders
and they reinforce themselves with specialized personnel who
work as buying agent, vendors started to directly work with
2. Buying Office in Global Sourcing their buyers instead of going through a buying office. These
forms of direct deal methods allow firms to decrease the cost
of commissions that go to buying offices which in turn has
2.1. Recent Buying Office Trends the benefits of lowering the prices for the buyers and increas-
ing the revenue of the vendors. However from the interview
Since the mid-1990s the buying offices in Korea and over- with buying office merchandisers, there are cases where a buy-
seas have shrunk in both size and number as many small buy- er who made deals directly with the vendor would return to
ing offices went bankrupt. In comparison, it is well known dealing through the buying office. This is because the buyers
that the vendors who produce clothing continue to grow and feel like they lack the negotiation skills of the buying office,
turn into enterprises. In the case of major vendors in Korea experiencing difficulties with the proceeding and controlling the
such as SAE-A Trading Company, Hansol Textile Limited, deal, and even the vendors can feel more comfortable dealing
Hansae, and Youngone Holdings continue to grow, expanding with the buying office than with buyers directly.
their production facilities across Asia and South America dem- From the interview, most interviewee pointed out that
onstrating just how much this industry has grown in size. For Korean vendors and buying offices are known to handle well
instance, Sae-A Trading Company with a $920 million sales complex and trendy products that combine an array of parts
volume in 2009, have 17 oversea offices and 20 factories in that have to be manufactured within a short timeframe. Even
Guatemala, Nicaragua, Indonesia, Vietnam, China, and United though the cost is little bit higher, Korean vendors have com-
States producing 1.4 million pcs/day for their buyers including
M. Lee, K. Oh / Journal of Global Fashion Marketing 1-4 (2010) 249-255 252
petitiveness in terms of high workmanship and efficiency as a 2.3. The Buyer, Buying Office, and Vendors
sourcing branch.
The working relationship between retailer buyers and buying
2.2. The Internal Structure of Buying Office offices can be divided in three types involving colorists, mer-
chandisers, R&Ds. The colorists, merchandisers, and R&D
Work orders from foreign retailer buyers are handled by the teams of buying offices work with their corresponding counter-
merchandiser team of buying office that liaises with vendors. parts in retailer buyers. First, colorists receive seasonal color
Within the buying office, merchandisers cohesively work with palettes consisting of 8-10 colors for main fabrics prior to the
technical design team, quality control team, and colorists to developmental stage of the season and proceed with lab-dips
complete apparel production with vendors on behalf of the developed by major fabric mills. The lab-dips are carefully
buyer. Among the several departments within the buying of- evaluated with proper lighting specifications required by buyers
fice, merchandisers play a central role as a communication hub internally within the buying office and forwarded to the
between buyers and vendors and among the internal teams. buyers. Once a lab-dip is approved, the colorists prepare the
Within well-established buying offices, R&D team functions color standards with 3-4 approved lap-dips for each color on
independently from the order handing teams consisting of mer- different fabrics. During the bulk production, the colorists pro-
chandisers, technical design team, quality control team and vide guidelines to vendors in preparing fabrics and evaluating
colorists. R&D teams can be divided into fabric R&D and gar- garment samples.
ment R&D. Unlike other teams whose jobs need to be ini- Secondly, merchandisers work with vendors on behalf of re-
tiated by the buyer’s requests for sample or price quotes or tailer buyers. Most foreign retailers do not have in-house appa-
order commitment for bulk production, both R&D teams ini- rel manufacturing factories; they work through buying offices
tiate their projects voluntarily by researching fabric trends and to source from overseas apparel manufacturers (Fung, Chen,
garment trends, sourcing innovative and functional fabrics and and Yip, 2007). Within the buying office, merchandisers most-
other materials, and developing garment designs for the exist- ly deal with buyers and technical design team and quality con-
ing retailer buyers. The R&D teams continuously produce val- trol team deal with vendors.
uable outcomes that can be provided to retailer buyers. Since Thirdly, the R&D teams work with designers, sourcing
this R&D function is not a profit-generating department, it is teams, and product development team in the retailers. Both
run as a cost center; however R&D functions have been a val- fabric R&D and garment R&D conduct year-around trend re-
uable asset to buying offices by bringing in more dependency search and fabric development, produce trend reports, and de-
or loyalty of buyers to the buying office. velop fabric and innovative garment samples for the retailer
By utilizing the fabric and garment trends and new material buyers. This working relationship is different from the other
sourcing information provided by the R&D team of buying of- two relationships in terms of the direction of information flow.
fices, the overseas retailers can enhance their fabric and design In the colorists and buyers and the merchandisers and buyers
development and eventually reduce their internal R&D costs. relationships, the flow of information is driven by retailer buy-
The investment in the R&D function by buying offices has re- ers and workforces in buying offices respond rather passively
sulted in providing an additional value-added service to retailer more depending on the decisions made by buyers. However, in
buyers, which has fortified the relationship between retailer the R&D teams and buyers relationship, information is fed to
buyers and buying office. The internal structure of buying of- buyers by the buying office. R&D teams’ understanding of
fice is found in the figure 2. buyers’ design concepts and fabric direction determines the
quality of the work produced by the R&D teams.
ue-added product, efficient working processes, and a new rela- fice in this case study tries to involve their major vendors
tionship with vendor and buyers. during the buyer team’s visit to the buying office and vendors’
production facilities. The buyers’ trip to Korea is important to
vendors since during the visit, vendors can show their own
3.1 Providing Value-added Product Development
R&D functions and domestic and international production
Services facilities. The buying office merchandisers schedule buyers’
visits to the vendors’ headquarters and production facilities and
Buying offices provide retailer buyers with value-added serv-
to major fashion markets in Seoul to impress buyers on the
ices through R&D teams as well as quality-assured production
fact that fashion trends found in Seoul are quite advanced and
management through vendors. Most foreign-based buying office
inspiring. On the other hand, some buying offices arrange ven-
has developed a global network of external design services that
dors to visit buyers to provide the chance for vendors to pro-
can be tailored with buyers’ brands concept located in key
mote their companies by exhibiting their capabilities and pro-
market in the US, Asia, and Europe. Buying offices much ef-
duction facilities.
fort to build a strong R&D team to provide design services.
Buying offices would commence education on textile,
R&D team usually provide trend services, including key trend
bleaching, printing, and other manufacture-related technologies
show recaps, fabric research, print development and painting
to its merchandisers with the cooperation of the vendors.
services.
Through such education, the buying office has the advantage
In order to fortify the vendor-buying office relationship,
of increasing the understanding about manufacturing process.
buying office fabric R&D team sources innovative and per-
In addition, when there are changes in external environment
formance fabrics and develop new fabric samples for retailer
or if the vendor, buying office, or buyer has internal diffi-
buyers. Garment R&D teams are developing styles for the spe-
culties they should discuss it together and strive to solve it.
cific retailers the buying office have established business rela-
When the financial crisis took place in 2007, some head-
tionship with and suggesting their designs to the buyer’s de-
quarters (buyers) faced challenges such as personnel reduction,
sign team. Since foreign retailers spend a great deal of re-
they would request help to the vendors and through the ven-
sources in creative design development, the efforts made by
dors’ cooperation they received a lot of aid; the headquarters,
buying office’s garment R&D team are favorable viewed by
buying office, and vendor would discuss it together and find a
the foreign retailers. Due to the nature of globalization in the
solution – constructing such long-term cooperating relationships
recent fashion trend and the good reputation of Korean fashion
is a notable competitive advantage.
industry, the adoption rate of the designs developed by the
garment R&D team is increasing even through the retailer de-
sign team still screen and modify to meet their design 3.3. Improving Work Efficiency
directions. However innovative R&D efforts made at buying
offices have become a strong factor to retain buyers and to in- The strong vendor – buyer partnership allows buying office
crease their dependency on buying offices. to lend part of their managing functions to vendors. The tech-
In the case of Korean vendors, they do not merely sew and nical design team of vendors can directly work with buyers to
produce the clothes according to the buyer’s order but they al- have fit samples and preproduction samples approved in a
so recommend to the buyer ways to increase the product’s val- more rapid and efficient way without being pre-inspected by
ue, increasing competitiveness more than other sourcing firms. the technical design team of buying office. This direct commu-
Some buying offices use vendor’s R&D team to suggest new nication between buyers and vendors are possible when a
trends, analysis of their competitors, textiles, trims, and designs strong partnership among the buyer, the buying office, and the
and show that they can solve anything in Korea that may be vendor is well established. The technical design team of ven-
related to the fashion products. dors is trained at the buyer’s headquarters on their measure-
ment protocols, fit specification, and sewing instruction to in-
spect the samples at the vendor’s sample facility. With this
3.2. Building a Strong Vendor-buyer Relationship process, buyers and buying office can reduce the preparation
time prior to cut confirmation. Also the use of product man-
The relationship between buying office and vendors has
agement system that are installed in the buyer, the buying of-
changed from hierarchical relationship to collaborative partner-
fice, the vendor, and the manufacturing factories help the bulk
ship in which all involved need one another and cooperate
production moving smoothly resulting in a much shorten lead
based on trust. Before, buying offices would create competition
time from the initial price negotiation to final product delivery.
among vendors in order to lower the price, however as of late
This process would become an opportunity for the buyer
they are pursuing “partnerships” with the three or four vendors
and vendor to deal directly and thus could endanger the buy-
and through long-term relationships they maximize cooperation.
ing office’s position. However it is possible because it could
The Buying office is also working to build a secure partner-
create a trusting partnership among the buyer, buying office,
ship with vendors by inviting vendors to the meetings with
and the vendor that would strive to bring about more efficient
buyers. In the collaborative partnership, the studied buying of-
work procedures and better product manufacturing.
255 M. Lee, K. Oh / Journal of Global Fashion Marketing 1-4 (2010) 249-255