Back in WiC50 we published an article about an unusual Sino-British startup. We termed it “Tibet’s first fashion” brand and asked whether the high-end sweaters and scarves it was making from yak’s wool could find their way into the wardrobes of cosmopolitan types who liked the story behind Khunu, as well as the ‘outdoorsy’ products it was promoting.
The designs had a Western aesthetic but Khunu’s garments were ‘made in China’. Not anymore: co-founder and CEO Julian Wilson has moved his production to the UK – albeit still sourcing his yak wool from Tibet.
This week Khunu emailed its clients to let them know that the first of its ‘made in England’ apparel was ready to purchase. We spoke to Wilson about the logic behind the move.
You’ve moved production from China to England. Why? Surely making clothing is a lot cheaper in China?
That’s the common perception but we’ve found the reality a little different. We use an expensive fibre, so material costs are the major part of our cost of goods. For us, the production costs are around 20-30% more expensive in the UK, but when you factor in the savings on shipping and duty, the difference is reduced.
But cost is not only about the cost of goods. UK factories are generally easier to work with, better managed, and are more willing to experiment with small volumes. The flip side is the UK has lost a lot of its skilled textile workers, so as demand for UK manufacturing picks up, there is not an immediately available workforce with the right skills to deal with it. Our London factory had even contracted in a couple of Chinese technicians who were delighted when I turned up speaking Mandarin!
Making our products nearer to the customer is also important to us – it’s a 15-20 minute cab ride from our factory to our pop-up store in Spitalfields. That makes supply chain management much easier, which is important when it all starts as far away as the Tibetan Plateau.
How did Khunu get off the ground and how did the product offering evolve?
The idea came to me when staying with nomadic yak herders in western China. They weren’t using the fine yak down and it struck me that this fibre could be used as an alternative to cashmere and other fine wool. A yak can survive winters at over 4,000 metres so I reasoned the fibre must have some inherent properties suited to making winter clothing. It was enough for me to leave my job and give the idea a try.
Taking the idea and developing it into a business took a considerable amount of work. We needed to find good yarn spinners and end product manufacturers that were willing to work with our small volumes and willing to experiment with yak, which nobody was really working with. The end product has evolved since then based on customer feedback and market testing. For example, we initially thought of a more performance-orientated product based on the warmth, wicking ability and other technical properties of the fibre, but customers told us they loved the soft, luxurious feel of the products more so we changed the emphasis slightly.
Where are your main markets?
We market only in English so the online store mostly picks up sales from the US, UK and at certain times of the year Australia. In China we have a strong following in Beijing, and some customers in Hong Kong where I used to live, but we haven’t really tapped into the broader Chinese market.
Any business guru will probably tell you to get closer to your customers rather than your suppliers, which was one of the reasons we decided to move to London, which is a global capital for our industry with a wealth of creative talent.
So China isn’t a key market for your products?
It is not a core market but we do have a strong relationship with a great retailer in Beijing called Slow Lane. The store caters to the growing number of Chinese customers who care about where their products come from and about how they are made. China has a growing appetite for brands like Khunu, but even through I’ve lived there for a decade and can speak the language (badly), I’m not Chinese and would always struggle to understand the needs of consumers. It made more sense for me to focus my efforts elsewhere – without focus you get nowhere.
Now that Khunu is a ‘Made in England’ product, will that increase the brand’s cachet in China?
I think Chinese people still feel some connection to Khunu because of where the fibre comes from, but paradoxically, yes, the Made in England stamp might help.
Sophisticated consumers in China don’t revere Western brands in the same way as before, but there is still a sense of trust and legitimacy attached to products from overseas. I’ll tell you at the end of the season how people have reacted to the move!
Your branding is “Himalaya sourced”. So the raw materials still predominantly come from China?
Yes, the way the product is made and sourced is core to what Khunu is about and the wool is all sourced from the Tibetan Plateau, where over 90% of the world’s yaks live.
We set the business up as a for-profit social enterprise that would support herding communities in the region. So aside from paying fair prices for wool, we invest 2% of revenues back into projects run by entrepreneurial Tibetans looking to make a positive impact in their communities. This year we purchased machinery and training for one of our partner communities to start first-stage processing of the raw materials that we purchase from them. This will help provide employment for herders who are moving into local towns.
Do you see your experience as a symptomatic of a broader trend – i.e. companies moving some of their manufacturing back from China to developed markets?
I think it depends on what you are making. We think more about finding suppliers that are reliable, willing to experiment with new ideas, and able to do smaller production volumes. China is not good for lower volume, higher quality manufacturing, even though there are some very good manufacturers there. These partners are easier to find in Europe. Since being back in Europe I’ve noticed that it’s cool to make stuff again, and ‘locally-made’ sells, so that was also a consideration, as was having a manufacturer near to where we are selling.
Although premium and luxury brands are increasing their production in Europe, I don’t see mass textile manufacturing returning there. Even with costs in China rising, producers there are still great at meeting the demands of high-volume, lower-priced brands. Europe just doesn’t have the capacity or cost base to meet their demand. That doesn’t mean we will never make in China again. We continue to supply our Chinese retail partners with goods that are finished locally, as flying products around the world all the time defeats the object of being a sustainable brand… and let’s not forget where all the yaks live too!
If you’d like to ask Julian Wilson any further questions about his move or Khunu, you can email him: [email protected]
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