There are two recent news events that have attracted the attention of textile people:
Event 1 : Since 2020, the COVID-19 epidemic that has spread around the world has caused a huge impact on the clothing industry. In the past few months, news of store closures, layoffs, and bankruptcies of European and American clothing brands have been common. However, behind these well-known brands, there are more as representatives. Small businesses and factories, especially in countries such as Cambodia, Bangladesh, and India, have faced an existential crisis due to Europe and the United States unilaterally canceling and postponing orders and refusing to pay overseas suppliers!
Event 2: Compared with these countries in Southeast Asia, China’s textile and apparel industry has seen a clear recovery trend recently, especially with orders from India beginning to flow back to China. As the “world’s factory”, China has great advantages in undertaking textile orders. In the past, with the continuous improvement of Southeast Asian countries’ industries and products, as well as the repeated trade relations between China and the United States, this relatively low-end China no longer has an absolute advantage in textile orders, which has also led to a large number of low-end textile orders being transferred to countries such as Southeast Asia and India in the past few years. However, the epidemic situation in these countries has not been well controlled recently, making it difficult to deliver such large quantities of orders. However, the epidemic situation in China has been basically controlled, so these orders have returned to China. From these two incidents, the editor can’t help but feel a little emotional.
The profits of low-end textiles are not good, and the profits of low-end textiles are poor. High-end development is the future trend
We all know that Southeast Asian countries undertake relatively low-end textile orders. The profit margins of these textile orders are very low and generally Below 10%. In order to pursue greater profits, European and American countries have transferred orders to countries such as Vietnam and Cambodia. However, since the epidemic, the lowest-end textile foundries have been most affected. Upstream brands can get out of the situation as long as they cancel orders and do not have to pay the balance. However, downstream foundries need to bear the burden of raw material backlog, finished product backlog, employee wages, etc. A range of fees. The economies of these countries are relatively backward, and these canceled orders cannot be consumed domestically.
In recent years, China has also begun to realize that low-end textiles are oversaturated and have a low voice, and have begun to research and develop in the mid-to-high-end direction, such as conventional imitation memory and spring textiles. Yafang, Nisifang, etc. are no longer “popular”, but new elastic fabrics like T400 and T800 are favored by designers. A manufacturer of imitation memory said: “Since the National Day, our regular imitation memory inventory has basically It hasn’t been moved, but tens of thousands of meters of Memory T800 are sold every day. Now our 60 looms are weaving this fabric, and the order can be completed by the end of this month.”
Coincidentally, a trader who makes functional fabrics also said: “We make functional fabrics, and only China can make these fabrics. Because China has a complete industrial chain, this ensures that these orders will not be Other countries have “taken it away” and the profits are considerable.” It can be seen that fabric companies should still take a differentiated route and enter the mid-to-high-end field.
Foreign trade is picking up, but the epidemic is still not completely under control. Textile companies need to prepare for a rainy day
Epidemic exposure Due to the so-called “spirit of contract” in European and American countries, China’s textile and apparel industry, as the “world’s factory”, was also deeply affected during the epidemic. However, as time went by, the textile and apparel industry began to gradually develop for the better in June. According to relevant data, from January to September 2020, the cumulative exports of textiles and clothing were US$215.78 billion, an increase of 9.3%, of which textile exports were US$117.95 billion, an increase of 33.7%, and clothing exports were US$97.83 billion, a decrease of 10.3%.
Now it is mid-to-late October. During this period, benefiting from the impact of overseas Christmas season stocking and the return of orders from India, foreign trade orders have begun to pick up. During the visit, some bosses said After receiving orders from European and American countries, a cloth boss in foreign trade said: “The order volume in October was better than the same period last year. We received 100,000 meters of cotton cloth and 200,000 meters of recycled pongee and peach skin velvet from the United States. Order.”
But the more we need to sound the alarm at this time, as can be seen from the above news events, how cautious we must be when doing business with European and American customers, although the epidemic is a force majeure , canceling and delaying orders are also helpless actions, but the most important thing in doing business is mutual trust. Now that a large number of orders have been transferred back to China, you must be careful at this time, plan ahead, and add relevant clauses to the contract to prevent orders from being canceled and payment not being recovered due to the second epidemic!
The current textile market can be said to be very crazy. Not only raw materials, gray cloth, and dyeing costs are rising steadily, but even textile stocks have risen sharply. Faced with such a situation, textile people must keep a clear head and determine how much end-use clothing demand has recovered. Do not blindly produce or hoard goods at this time, especially when overcapacity is the most serious.� products may end up entering an infinite loop again….
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