Hong Kong and Shenzhen are in many respects a twin city, joint by an umbilical cord of an extended metro and ferry system, but more importantly, by often mutual business interests. While Hong Kong is relatively old and has inherited its characteristic Britishness, Shenzhen - not more than a stone's trow away from Hong Kong's Northern Territories - is the "youngest city" in China full of business with Chinese characteristics.

The symbiosis benefits both, also when it comes to the fashion industry.
Many garment manufacturers have their headquarters in Hong Kong, among them some of the most globally outstanding producers. Back in the golden days of 1960s and '70s, Hong Kong was the hub of garment production.

The business of Shenzhen

Not any more. Because land, time and workforce - pretty much everything actually - in HK is expensive, garments are rarely produced on the island or its mainland territories any more. Now, many suppliers are located beyond the HK-China border in Shenzhen or further north where workforce is still relatively affordable. Growing number of suppliers face difficulties with finding enough workforce and getting enough purchase orders to match their capacity volumes.

Our fieldwork in factories of Shenzhen 

In the past week, Reverse Resources team had the great opportunity to visit one of H&M's most appreciated suppliers in Shenzhen. We were welcomed by a warm and very accommodating staff, fully open to share how their production setup is organised and what are the processes established around managing leftovers. This time our primary goal was to observe and analyse how we could implement our solution in their daily process.

Spread out white cotton fabric that will be turned into 4000 shirts in the next few days.

We also gave our software prototype a first spin and gathered feedback for fine-tuning our "minimum viable product" (the so-called MVP all start-ups know well about). To those who have just joined our blog - the software helps to collect information about leftovers from garment production so that we, the factories, and ultimately who ever is interested can see and analyse the leftover data to make plans for reusing or recycling it. We are currently testing the MVP both in English as well as Chinese, starting with cutting scraps and soon moving on to bigger pieces of fabric and roll ends.  Exiting times.

Key conclusions from our trips to China till now

Although every factory is different, the factories we have visited by now seem to follow roughly the same patterns in China - leftovers are generated in the same production sequence and handled in similar way. However, due to market failures and irregularities in demand for leftovers, it can vary widely how thoroughly and systematically leftovers are sorted and resold. Based on our fieldworks in China we can safely make the conclusion that it is not difficult to create a standardised method for sorting leftovers and gathering comparable data. And we can conclude, that there is even bigger potential for our solution to improve the market than we initially thought.

This is how cutting is done - with an armour glove!

Our goal initially was to focus on upcycling or reuse of fabrics in products, but it turned out that there is still a lot to be done in recycling as well. Bag after bag we've seen cutting scraps thrown away as common household waste which by current market price means throwing away thousands of euros. It is only possible to turn it into new fabric if there is an appropriate recycling plant available for that. Our goal is to create the connections where to take these material to turn this into new value. But we haven't forgot our plan with reuse and upcycling as well - it's just our next step forward.

As we are told time and time again, Reverse Resources is ahead of its time with our solution. When it comes to the cutting scraps and other small leftover pieces which we are helping to segregate more efficiently, there are not enough recycling capacity available yet to turn the leftover fibres and textiles into new good-quality material. So we are building up our solution with the belief that once we've gone through the phase of measuring the potential of recycling based on the amount of resources available, our input is helping the recycling market to boom.  It is both great and painful to live in the future.

Observing the vibe of the factories

Getting ready for implementing our software

Just as the past few times we are very much happy with our progress. Now its time to turn back to the drawing board. Many hours of work are ahead to perfect the software before we go back in October to start implementing it in real-time production processes and data gathering in real time. Once we finally get the numbers scrolling on the screen, we can show how big is the unexplored business opportunity from these leftovers in real.

Albeit the fieldwork is done for this time with the bigger team, some of us will stay in China for the upcoming months to continue testing the prototype. So if you are around and interested in meeting us, let us know and perhaps we'll have a chat. Take care!

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