“What is the current production situation? Can all these garments be delivered before the agreed date?” Shanghai Xinlian Textile Import and Export is located on Yuyuan Road, Changning District In the design center of the company, Chen Zheng, general manager of Xinlian Textile, was busy telling Li Hualiang, head of the company’s seventh business department, to complete the latest batch of clothing orders from North American customers on schedule and with high quality.
“Old foreign trader” Chen Zheng, who had been frowning some time ago, now looks much more relaxed.
A sudden email brought about a turn of events
A few months ago, this foreign trade company with the largest import and export volume in the textile and garment industry in Shanghai, I was confused for a while.
Chen Zheng lamented that this is the most difficult year in the 30 years of foreign trade. The outbreak of the epidemic at the beginning of the year caused foreign trade companies to encounter two periods of “squeeze”. At first, the country was unable to resume work and production for a while, and was worried that overseas orders would not be delivered on time; when production capacity gradually recovered in April and May, the overseas epidemic became fierce, and foreign customers stopped placing orders.
The challenge in the second half was more severe than the first half. “Whether it is a foundry or a company, it is fatal to have no work to do and no orders to accept. After all, the fixed expenses are there, and the cash flow may be enough for a few months.” At that time, the entire foreign trade industry had an unclear judgment on the trend of the epidemic. , Xinliantex is also difficult to judge how much it will fall this year, 30% or 50%? Maybe more.
In previous years, Xinliantex’s annual import and export trade volume was approximately US$1.3 billion to US$1.5 billion, of which exports exceeded US$1 billion. In export, Xinliantex’s core segment – one-stop service of apparel ODM (original design manufacturer) supply chain, has been a stable supplier to many well-known fashion apparel brands in Europe, Japan and other countries.
Conventional service trade orders are shrinking across the industry. In the ODM field, although several large overseas customers have closed stores and orders have shrunk, with their advantages in R&D, design, and production technology, whether Can new markets be opened up?
“In the face of changes, we can only adjust ourselves and make deterministic changes to deal with uncertain changes.” Chen Zheng said. In the past, relying on several stable orders from big brands, Xinlian Textile was able to “sit back and relax” throughout the entire industry chain from design, proofing, testing to OEM production. However, due to the epidemic, a large number of overseas physical stores of these big brands have closed down. Xinlian Textile suddenly faced the unprecedented risk of “breaking the chain”, especially the downstream OEM companies that may go bankrupt at any time.
Changes and turnarounds start with an unexpected email.
In early April, Jin Peiyi, the export backbone of the Seventh Department, which focuses on developing European and American clothing exports, received an email from a North American customer requesting an order totaling nearly 10 million US dollars. At that time, Jin Peiyi and Li Hualiang had mixed joys and sorrows, and were extremely entangled. Fortunately, it is still trusted by overseas customers during the epidemic, and there is an urgent need for new orders to open up space and get out of the predicament. What is worrying is that at the peak of the global epidemic, foreign clothing brands have closed stores one after another. Although the orders from this “unfamiliar” customer are tempting, will the customer’s sales be affected by the epidemic? Moreover, this is a large order, and the performance risks under the epidemic situation need to be even more considered.
Chen Zheng and the decision-making team quickly made a decision: take the order! Never miss an opportunity for change and development.
Don’t put your eggs in one basket
This is an order from a large and well-known supermarket in North America.
Chen Zheng analyzed to reporters that during the epidemic, the demand for fashion clothing shrank, but the supermarket’s orders were for home sports and leisure clothing, that is, basic clothing. “For supermarkets, the casual clothes sold here are just like the ‘bread and butter’ in supermarkets. They are the urgent needs of the people. The products we export to customers are not actually clothes, but ‘bread that will not expire.'” Moreover, Since the epidemic, this large supermarket has been operating well.
However, rational analysis cannot eliminate real risks after all. Relying on its past experience and good credit, Xinliantex reached an agreement with China Export and Credit Insurance Corporation to “insure” the business in this special period. On the other hand, considering that the other party will pay after the goods arrive, the business will be split into three orders and executed in batches to reduce risks and financial pressure.
“Unexpected” orders gave Xinliantex’s upstream and downstream companies a breath of relief amid the epidemic. This business is not about how much profit you make, the key is to ensure that the ODM supply chain does not stop. “Xinliantex helped us during the most difficult time, giving us hope to continue to survive, and the jobs of hundreds of workers were saved.” said the person in charge of Xinliantex’s downstream foundry in Zhejiang.
This business from a North American supermarket has also opened up new space for change for Xinliantex.
In the past, Xinliantex’s ODM customers were mainly fashion customers, but in fact the structure of the customers was relatively simple. Once faced with a sudden crisis like the epidemic, not only will they face the risk of store closures, but also the demand for fashion apparel will be greatly reduced among price-sensitive consumers, making it difficult for companies to avoid the risk of shrinking orders. On the contrary, the price is relatively cheap at this time, which is the basis of rigid needs.��The demand for clothing will be stronger. Comprehensive hypermarkets such as supermarkets are the most important customers for basic clothing.
“Careful observation will reveal that during the epidemic, there were fewer formal occasions and everyone dressed more casually. In particular, women’s desire to go shopping and ‘buy, buy, buy’ also dropped significantly, but the demand for home leisure items There has been no decline, and some categories have even grown against the trend,” Chen Zheng said. As early as three years ago, Xinliantex started planning to make up for the shortcomings of basic clothing by opening North American supermarket channels, and the epidemic accelerated the process of this transformation.
Fashion clothing seems to have a higher gross profit, but due to strong seasonality and following trends, the scale of each model is also relatively small. In contrast, although customers have more demanding price requirements for basic clothing, their order scale is large and their style requirements are relatively simple. In particular, basic clothing is in urgent demand at all times and has strong resistance to shocks and risks, which can ensure the stability of orders.
This “attempt” during the epidemic has further strengthened Xinliantex’s judgment and pace of change. Chen Zheng said that in the future, we will develop more diversified customers and build markets at different levels. When risks come, we can “the east is not bright and the west is bright” instead of putting eggs in one basket.
The more difficult it is, the more we must hold on to the “fire”
Diversified market development allows Xinlian Textile to slowly adjust and change during the epidemic Rejuvenate.
Today, the company’s overseas ODM orders from stable traditional fashion brands have gradually picked up. The reporter saw in Xinliantex’s sample center that designers and samplers were busy nervously. “Actually, our design and development work has not stopped during the epidemic. Since April, we have designed and prototyped nearly 2,000 garment samples based on the product demands of various brand customers, which actually exceeded the number of samples produced in the same period last year.” Pan, head of the design and sampling platform Huipin said that this is the core competitiveness of an enterprise. The more difficult the situation, the more important it is to hold on to the “fire”. This is also the confidence that companies dare to decisively take “super” orders from North American customers during the epidemic.
In fact, since this year, due to shrinking customer demand, Xinliantex has taken the initiative to promote products. In turn, through market research, it has proactively pushed design samples to customers to inspire them. need. In the past few months, many development samples actively pushed by Xinliantex have been adopted by major fashion brand customers, and many small batch “made out of nothing” orders have been completed.
R&D and design continued during difficult times, fully preparing for the next round of restart.
Based on the trust established through long-term cooperation and the continuous upgrading of R&D and design capabilities, a major ODM fashion apparel customer served by Xinliantex recently expressed its willingness to give high-quality suppliers such as Xinliantex more opportunities. Large service space. Once recognized as a “high-quality empowered supplier”, they will be exempted from inspection for product exports, and the company’s future orders will be more secure.
When it comes to the domestic market, Chen Zheng said that Xinliantex will focus on actively exploring the “internal circulation” market through import business, especially the domestic sales business of imported consumer goods in the context of the China International Import Expo. As soon as the second half of this year, Xinliantex’s imported goods flagship store on Tmall will be launched.
Recently, Xinliantex, together with its brother companies under the group, has actively participated in Oriental International Group’s creation of an imported goods distribution center in the South Hongqiao area of Shanghai that links the Yangtze River Delta and radiates throughout Asia. plan.
</p
