Once a major foreign trade exporter, the textile and clothing industry is experiencing a "cold stream." Since 2012, the production growth of the textile industry has declined and the demand for terminal textiles has also continued to slow. The authoritative data from the National Development and Reform Commission shows that from January to July this year, China's exports of textile yarn fabrics and products and clothing all decreased by 0.2%, of which, textile yarn fabrics and products and apparel exports declined by 8% and 8.1% respectively in July.
In the context of the decline in the export of the textile and apparel industry, Dongguan textile and garment companies are also experiencing pain. In addition to the decline in profits, the order structure of textile and apparel companies has also changed quietly, and those textile and garment companies that hope to expand domestic sales through branding also have their own confusion.
Current situation: Decline in profits of textile companies Wang Feng has been doing apparel business for 8 years in Humen. At present, Xiangyun Garment Factory, which he operates, has more than 200 employees. Talking about the current operating conditions of enterprises, Wang Feng sighed and said, “This year, corporate orders The decline is more obvious, which is about 30% lower than the same period of last year.†As a small and medium-sized textile and garment enterprise, the situation of Xiangyun Garment Factory is representative in Dongguan.
Statistics show that foreign demand for textiles this year is insufficient. From January to July, the growth rate of imports of textiles and clothing from the United States and Japan fell by more than 10 percentage points over the same period of last year, while the growth rate of EU imports fell by more than 20 percentage points, which directly impacted the Chinese textile and apparel products. The exit.
Sun Huaibin, deputy secretary-general of the China National Textile and Apparel Council, said that in the first seven months of this year, the growth rate of the textile industry continued to slow down, and the total value of industrial output of 37, 000 textile enterprises above designated size was 314.47 billion yuan, a year-on-year increase of 10.9%. In the same period of last year, it decreased by 18.8%, which was 3.8 percentage points lower than the first quarter of this year.
Due to the lack of market demand, the benefits of domestic textile companies have significantly declined: From January to August, the profit rate of the textile industry decreased by about 12% compared with the same period of last year, and the loss of loss-making enterprises increased by more than 100% year-on-year.
Cost pressure: fluctuations in the price of cotton fluctuate in the industry. Sources of the industry said that the price of upstream raw materials has gone up. Cost pressures have been gradually transferred to textile companies along with the industrial chain, causing the textile and clothing companies to become overwhelmed.
One factor that has a greater impact on textile companies is the volatility of cotton prices. Due to the price difference between domestic and foreign cotton, the domestic cotton price is about 20% higher than that of foreign cotton prices, which is higher by 4,000 to 5,000 yuan per ton. This spread has directly weakened the competitiveness of textile companies.
Wang Feng said that for small and medium-sized textile companies like them, the cost of purchasing cotton will usually account for about 70% of the company's raw material costs, and domestic textile and garment companies are facing higher prices at higher domestic and foreign cotton price spreads. The cost pressure on textile and clothing companies has a relatively significant impact on international competitiveness.
Changes in orders: The proportion of small singles and short orders increased According to Gao Yupeng, deputy secretary-general of the Dongguan Textile and Apparel Industry Association, due to rising costs, the competitive advantages of Dongguan textile and garment enterprises are no longer evident in the international industrial chain competition. According to the association's research, orders for some textile and garment companies in Dongguan have been diverted to Southeast Asia, South Asia and other regions. "This trend is gradually evident."
Gao Yupeng said that according to the association’s research, in addition to the decline in orders, the order structure has also changed, with small and short orders increasing significantly.
The increase in the proportion of short-listed companies will make them relatively flexible in responding to changes in the external environment, and they may also avoid some risks. At the same time, they can also ease the pressure on companies and accelerate the speed of capital turnover. On the other hand, due to the short bills, the delivery cycle is short, which also imposes higher requirements on companies, and companies must improve their coordination and response capabilities.
Concerns in domestic sales: With branded companies facing high inventory in the face of export obstruction, many companies in Dongguan have begun to realize the importance of expanding the domestic market, and have therefore expanded the domestic market by building brands. Gao Yupeng said that according to the Dongguan Garment Industry Association's research, those enterprises that have become branded in Dongguan have seen polarization. Some have done very successful, while others are experiencing pain.
Gao Yupeng said that since the beginning of this year, the high inventory pressure of branded apparel has made companies overwhelmed. Some branded textile and garment companies in Dongguan, due to the slow withdrawal of funds, have caused problems in the capital chain and have affected the normal operation of the company. In addition, due to problems in the internal management of the company itself, leading to increased operating costs, these are the main factors that hinder the development of the company.
In the context of the decline in the export of the textile and apparel industry, Dongguan textile and garment companies are also experiencing pain. In addition to the decline in profits, the order structure of textile and apparel companies has also changed quietly, and those textile and garment companies that hope to expand domestic sales through branding also have their own confusion.
Current situation: Decline in profits of textile companies Wang Feng has been doing apparel business for 8 years in Humen. At present, Xiangyun Garment Factory, which he operates, has more than 200 employees. Talking about the current operating conditions of enterprises, Wang Feng sighed and said, “This year, corporate orders The decline is more obvious, which is about 30% lower than the same period of last year.†As a small and medium-sized textile and garment enterprise, the situation of Xiangyun Garment Factory is representative in Dongguan.
Statistics show that foreign demand for textiles this year is insufficient. From January to July, the growth rate of imports of textiles and clothing from the United States and Japan fell by more than 10 percentage points over the same period of last year, while the growth rate of EU imports fell by more than 20 percentage points, which directly impacted the Chinese textile and apparel products. The exit.
Sun Huaibin, deputy secretary-general of the China National Textile and Apparel Council, said that in the first seven months of this year, the growth rate of the textile industry continued to slow down, and the total value of industrial output of 37, 000 textile enterprises above designated size was 314.47 billion yuan, a year-on-year increase of 10.9%. In the same period of last year, it decreased by 18.8%, which was 3.8 percentage points lower than the first quarter of this year.
Due to the lack of market demand, the benefits of domestic textile companies have significantly declined: From January to August, the profit rate of the textile industry decreased by about 12% compared with the same period of last year, and the loss of loss-making enterprises increased by more than 100% year-on-year.
Cost pressure: fluctuations in the price of cotton fluctuate in the industry. Sources of the industry said that the price of upstream raw materials has gone up. Cost pressures have been gradually transferred to textile companies along with the industrial chain, causing the textile and clothing companies to become overwhelmed.
One factor that has a greater impact on textile companies is the volatility of cotton prices. Due to the price difference between domestic and foreign cotton, the domestic cotton price is about 20% higher than that of foreign cotton prices, which is higher by 4,000 to 5,000 yuan per ton. This spread has directly weakened the competitiveness of textile companies.
Wang Feng said that for small and medium-sized textile companies like them, the cost of purchasing cotton will usually account for about 70% of the company's raw material costs, and domestic textile and garment companies are facing higher prices at higher domestic and foreign cotton price spreads. The cost pressure on textile and clothing companies has a relatively significant impact on international competitiveness.
Changes in orders: The proportion of small singles and short orders increased According to Gao Yupeng, deputy secretary-general of the Dongguan Textile and Apparel Industry Association, due to rising costs, the competitive advantages of Dongguan textile and garment enterprises are no longer evident in the international industrial chain competition. According to the association's research, orders for some textile and garment companies in Dongguan have been diverted to Southeast Asia, South Asia and other regions. "This trend is gradually evident."
Gao Yupeng said that according to the association’s research, in addition to the decline in orders, the order structure has also changed, with small and short orders increasing significantly.
The increase in the proportion of short-listed companies will make them relatively flexible in responding to changes in the external environment, and they may also avoid some risks. At the same time, they can also ease the pressure on companies and accelerate the speed of capital turnover. On the other hand, due to the short bills, the delivery cycle is short, which also imposes higher requirements on companies, and companies must improve their coordination and response capabilities.
Concerns in domestic sales: With branded companies facing high inventory in the face of export obstruction, many companies in Dongguan have begun to realize the importance of expanding the domestic market, and have therefore expanded the domestic market by building brands. Gao Yupeng said that according to the Dongguan Garment Industry Association's research, those enterprises that have become branded in Dongguan have seen polarization. Some have done very successful, while others are experiencing pain.
Gao Yupeng said that since the beginning of this year, the high inventory pressure of branded apparel has made companies overwhelmed. Some branded textile and garment companies in Dongguan, due to the slow withdrawal of funds, have caused problems in the capital chain and have affected the normal operation of the company. In addition, due to problems in the internal management of the company itself, leading to increased operating costs, these are the main factors that hinder the development of the company.
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