Inside The Global Zipper War

Japanese and Chinese rivals battle for dominance in this billion-dollar industry, a tale of a worldwide economy drawing ever closer.

Take a close look at the zipper on most jeans and you'll find the name of the Japanese leader, YKK
Take a close look at the zipper on most jeans and you'll find the name of the Japanese leader, YKK
Jean-Philippe Louis

PARIS — Discerning shoppers look at them closely, even if most have no idea where they were made, or by whom. Are they solid? Do they go up and down without snagging? Do the teeth hold together as they should?

If the answer is yes, if the zipper works, then all is well. The wearer can go about his or her business. But a bad zipper is an obvious deal breaker. It renders the item of clothing useless. And it's liable to foster major trust issues with the clothing brand, even though the zipper was made, in fact, by a different company.

Clothing manufacturers know this. Invectives towards a malfunctioning zipper will be directed at them, rarely at the company that supplied the aforementioned fastener. Because who's even heard of those companies? Zippers may be important, but they're also small. Anecdotal even. And so the groups that make them are largely invisible.

And yet, zippers are big business. Huge, even, with a market worth no less than $10 billion, according to Global Industry Analysts. It is expected to grow even more in the coming years, perhaps reaching $13 billion by 2020. Little wonder that the two leading zipper producers — one from Japan, the other from China — are currently at "war" with each other in an all-out battle for market supremacy.

Aiming high

Take a close look at the zipper on most jeans and you'll find the name of the Japanese leader, YKK (Yoshida Kogyo Kabushikikaisa), which managed to take the crown from Talon, a U.S. brand that inherited the invention. Founded in 1934 by Tadao Yoshida, YKK is one of Japan's biggest unlisted companies with a turnover of 742 billion yen ($6.5 billion) in 2016. The YKK Group makes close to 7 billion zippers per year, about half of the total manufactured annually around the globe, and has 114 branches in 71 countries.

Self-assured, the company has even produced an animated short film, Fastening Days, a story about two teenagers trying to save a city, armed with zipper-making machines. In short, a show of grandiloquence, summed up in one slogan: "Little Parts, Big Difference."

Until now, YKK has enjoyed a quasi-monopoly, the rest of the market being divided among a multitude of Chinese companies. But this domination now seems threatened by the rise of another player, one that is determined to become the new number one. Fujian SBS Zipper Science & Technology Co. Ltd, a Chinese company founded in 1984, ranks second for the number of patents applied in relation to zippers, behind YKK.

SBS's lofty ambitions are no secret. Overtaking YKK is "our ultimate goal," explains Helen He, head of the Chinese firm's PR department. But SBS also knows that "there's a gap of half-a-century" compared to its bigger, more diversified, opponent. Indeed, YKK also sells the machines to make zippers, buttons, rivets, etc.

Still, SBS has grown a lot, particularly in China, where it already employs more than 6,000 people, has a 100,000-square meter headquarters in Fujian, and a market capitalization value of about 6 billion Chinese yuan ($872 million). It may not have an animated short, but it does have its own basketball team in the CBA (the Chinese NBA). It also has signed partnerships with important brands, such as H&M, Decathlon, Pump, Adidas or Target. The world's second producer, it nonetheless dominates the market in its home country, where YKK first appeared in 1992.

New styles, new concepts

Competing with YKK outside of China has proven to be more difficult, particularly in the face of stereotypes regarding the quality of Chinese versus Japanese goods. Quality is of the essence when it comes to zippers. "The minimal requirement is 5,000 openings and closings before a potential deterioration, and that really is a minimum," explains Jean-Marc Scotti, managing director at YKK France.

SBS has made a careful effort, therefore, to break away from its low-cost and mass-production image. But it believes this evolution is impeded by the fact that it's a relative new-comer on the market, whereas YKK has largely flooded the upmarket and luxury brands. Europe, where most of the luxury market is to be found, only represents 13% of SBS's sales.

Competition for the high-end market is going to be "more and more intense," the Chinese company admits. That's because fashion designers are now using zippers less as functional tools than as stylish accessories. They've become more visible, on sweaters for instance, and are becoming an integral part of garments, not to mention handbags.

YKK is one of Japan's biggest unlisted companies — Photo: JD Hancock

Designers always work with zipper manufacturers to create new styles, new concepts. YKK says that the luxury industry is exactly why the brand has a presence in France. And in December 2015, the Japanese company inaugurated a showroom in Shoreditch, London, a part of the English capital famous for its art galleries and Banksy works.

With this positioning, YKK keeps its distance from SBS but faces entirely different rivalries, among them Riri, an Italian company founded in 1936, two years after YKK, that enjoys incomparable renown in the high-end market. With a sales volume worth $85 million (75% with zippers, 25% with buttons), Riri describes itself as a "small" player compared to its Asian opponents, but it's the undisputed leader in its category, with partnerships with Gucci, Prada, Hermès, Moncler, and others.

Studying the competition

To make it in that market, you have to be close to the customer, to create unique pieces. The fabric, the teeth, the slider are all customizable. And the performance is measured by the patents. Riri offers, for instance, waterproof zippers, traction-proof snap buttons, even a zipper that can resist atmospheric agents and was designed with help from University of Applied Sciences and Arts of Southern Switzerland.

Beyond aesthetics, YKK also develops more functional zippers for the European market, especially for the United Kingdom. Examples include ergonomic zippers that better fit body shapes (chins, in particular), and special fast-opening zippers. Over the past fiscal year, the Japanese company spent $180 million on research and development.

SBS also understands the crucial importance of the high-end market. "We're working hard to broaden our offer and fill the gap," Helen He says. In other words, SBS wants to do it like YKK, to file numerous patents and attract important partners, as they did recently with Giorgio Armani. "Of course we're looking at what YKK does," she adds. "Asia-Pacific is the fastest-growing market and YKK is setting up a number of promising strategies."

For now, the Japanese company still has the upper hand in the zipper war. But its main opponent from China isn't backing down. "We're aware of our advantages as well as our potential disadvantage compared to YKK," says He. It's an outlook that brings to mind something else that was "made in China": Sun Tzu's The Art of War. "He who doesn't know his enemy will be defeated," the ancient military treatise cautions.

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How China Flipped From Tech Copycat To Tech Leader

Long perceived as a country chasing Western tech, China's business and technological innovations are now influencing the rest of the world. Still lagging on some fronts, the future is now up for grabs.

At the World Semiconductor Conference in Nanjing, China, on June 9

Emmanuel Grasland

BEIJING — China's tech tycoons have fallen out of favor: Jack Ma (Alibaba), Colin Huang (Pinduoduo), Richard Liu (Tencent) and Zhang Yiming (ByteDance) have all been pressured by Beijing to leave their jobs or step back from a public role. Their time may be coming to an end, but the legacy remains exceptional. Under their reign, China has become a veritable window to the global future of technology.

TikTok is the perfect example. Launched in 2016, the video messaging app has been downloaded over two billion times worldwide. It has passed the 100-million active user mark in the United States. Thanks to TikTok's success, ByteDance, its parent company, has reached an exceptional level of influence on the internet.

For a long time, the West viewed China's digital ecosystem as a cheap imitation of Silicon Valley. The European and American media described the giants of the Asian superpower as the "Chinese Google" or "Chinese Amazon." But the tables have turned.

No Western equivalent to WeChat

The Asian superpower has forged cutting-edge business models that do not exist elsewhere. It is impossible to find a Western equivalent to the WeChat super-app (1.2 billion users), which is used for shopping as much as for making a medical appointment or obtaining credit.

The flow of innovation is now changing direction.

The roles have actually reversed: In a recent article, Les Echos describes the California-based social network IRL, as a "WeChat of the Western world."

Grégory Boutté, digital and customer relations director at the multinational luxury group Kering, explains, "The Chinese digital ecosystem is incredibly different, and its speed of evolution is impressive. Above all, the flow of innovation is now changing direction."

This is illustrated by the recent creation of "live shopping" events in France, which are hosted by celebrities and taken from a concept already popular in China.

10,000 new startups per day

There is an explosion of this phenomenon in the digital sphere. Rachel Daydou, Partner & China General Manager of the consulting firm Fabernovel in Shanghai, says, "With Libra, Facebook is trying to create a financial entity based on social media, just as WeChat did with WeChat Pay. Facebook Shop looks suspiciously like WeChat's mini-programs. Amazon Live is inspired by Taobao Live and YouTube Shopping by Douyin, the Chinese equivalent of TikTok."

In China, it is possible to go to fully robotized restaurants or to give a panhandler some change via mobile payment. Your wallet is destined to be obsolete because your phone can read restaurant menus and pay for your meal via a QR Code.

The country uses shared mobile chargers the way Europeans use bicycles, and is already testing electric car battery swap stations to avoid 30 minutes of recharging time.

Michael David, chief omnichannel director at LVMH, says, "The Chinese ecosystem is permanently bubbling with innovation. About 10,000 start-ups are created every day in the country."

China is also the most advanced country in the electric car market. With 370 models at the end of 2020, it had an offering that was almost twice as large as Europe's, according to the International Energy Agency.

Photo of a phone's screen displaying the logo of \u200bChina's super-app WeChat

China's super-app WeChat

Omar Marques/SOPA Images/ZUMA

The whole market runs on tech

Luca de Meo, CEO of French automaker Renault, said in June that China is "ahead of Europe in many areas, whether it's electric cars, connectivity or autonomous driving. You have to be there to know what's going on."

As a market, China is also a source of technological inspiration for Western companies, a world leader in e-commerce, solar, mobile payments, digital currency and facial recognition. It has the largest 5G network, with more than one million antennas up and running, compared to 400,000 in Europe.

Self-driving cars offer an interesting point of divergence between China and the West.

Just take the number of connected devices (1.1 billion), the time spent on mobile (six hours per day) and, above all, the magnitude of data collected to deploy and improve artificial intelligence algorithms faster than in Europe or the United States.

The groundbreaking field of self-driving cars offers an interesting point of divergence between China and the West. Artificial intelligence guru Kai-Fu Lee explains that China believes that we should teach the highway to speak to the car, imagining new services and rethinking cities to avoid cars crossing pedestrians, while the West does not intend to go that far.

Still lagging in some key sectors

There are areas where China is still struggling, such as semiconductors. Despite a production increase of nearly 50% per year, the country produces less than 40% of the chips it consumes, according to official data. This dependence threatens its ambitions in artificial intelligence, telecoms and autonomous vehicles. Chinese manufacturers work with an engraving fineness of 28 nm or more, far from those of Intel, Samsung or TSMC. They are unable to produce processors for high-performance PCs.

China's aerospace industry is also lagging behind the West. There are also no Chinese players among the top 20 life science companies on the stock market and there are doubts surrounding the efficacy of Sinovac and Sinopharm's COVID-19 vaccines. As of 2019, the country files more patents per year than the U.S., but far fewer are converted into marketable products.

Beijing knows its weaknesses and is working to eliminate them. Adopted in March, the nation's 14th five-year plan calls for a 7% annual increase in R&D spending between now and 2025, compared with 12% under the previous plan. Big data aside, that is basic math anyone can understand.
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