Recently, a large clothing factory in Dongguan has cooperated with a cross-border e-commerce customer in Guangzhou. The clothing is sold to end consumers in the United States and Japan through Amazon. During the Black Friday and Cyber Monday periods that just passed, customers’ store traffic on Amazon increased significantly, and orders skyrocketed. The director of the garment factory said that Guangzhou’s cross-border e-commerce customers have increased their purchases this year, from a few thousand pieces in the past to hundreds of times now.
Some garment factories in Dongguan have also stated that they will resume taking orders from July, and orders are currently scheduled until the end of the year. Recently, a garment factory in Qiaosi, Hangzhou, has been overwhelmed with orders and production has been scheduled until January next year. Recently, the clothing industry has shown a good situation of receiving orders, which is a hot phenomenon.
However, the cloth bosses in the weaving market are not calm: The business of the garment factory is so good, why is the market for gray fabrics continuing? Decline, factory inventory increased again?
In fact, the market situation of the weaving market has been declining since the end of Double Eleven. Autumn and winter fabrics have been slow to sell, and spring and summer fabrics have not been released smoothly, resulting in slow sales of the entire gray fabric market. The inventory of gray fabrics, which is prone to decline, has begun to rise slowly again. It is understood that most weaving companies have begun to enter a situation where it is difficult to balance production and sales. According to some weaving manufacturers, most of the executable orders currently on hand can be maintained until the end of December, and some can even be maintained for only 10 days. Of course, we cannot exclude some manufacturers that are doing well and have orders scheduled for next year, but they are still relatively few.
From the above situation, we can see that the weaving market is indeed cooling down, but the downstream garment factories are booming, and the two have “derailed”. What is the actual cause? In fact, the derailment of the industrial chain has occurred more than once or twice. Especially in the context of a recession, such contradictions have become more and more prominent.
Overcapacity in the weaving market, uneven production and sales has become the norm
In fact, the “cancer” of the weaving market, overcapacity, has not been eliminated. Since 2019, excessive gray fabric inventory has become the biggest problem in the market. Coupled with the impact of the epidemic in the first half of this year, overcapacity has become increasingly serious. The accumulated inventory cannot be digested by the peak season of more than one month in the second half of the year. Therefore, weaving manufacturers only saw a slight decrease in inventory in October, and production and sales were barely flat. So, once this wave of market conditions drops, it is only natural that the weaving market will return to the normal state of high inventory.
The clothing industry is different, although the clothing inventory is also very large. But for some clothing brands, even if they have inventory, in order to maintain the brand effect, they will still release new products every season instead of selling outdated inventory clothing. And some clothing brands will burn inventory, so there is new demand for fabrics every season. The inventory of gray fabrics is different. It is not outdated. As long as it is stored properly, it can still be sold after being placed in the warehouse for three to five years. In other words, the volume of gray fabrics in the weaving market is very large, and the demand for fabrics in the clothing market is far less than that. Therefore, the current situation is that clothing factories are busy and weaving factories are open.
Domestic sales in the clothing market are picking up, and foreign trade orders are returning
On the other hand, those who receive orders from clothing factories From a perspective, their order-taking situation has indeed improved recently. In fact, since October, the garment factory has received many orders for winter clothing and is working overtime to make them. The two e-commerce festivals of Double Eleven and Double Twelve, coupled with the “cold winter effect”, have boosted the sales of down jackets a lot. Immediately afterwards, orders for spring and summer clothing also began to be placed. Therefore, in the second half of the year, there was an endless supply of clothing orders, which have been scheduled until January next year.
In addition to the good domestic sales of clothing, the form of foreign trade is also good. According to garment factories in Hangzhou, most of them produce garments for domestic sales, but they also received many foreign trade garment orders in the second half of the year. The improvement in foreign trade orders is partly due to the gradual recovery of export orders in the second half of the year, and the return of foreign orders that disappeared in the first half of the year. On the other hand, the epidemic situation in Southeast Asia and other places was severe in the second half of the year. Many garment processing factories were unable to produce normally, and some garment processing orders were returned to China. This resulted in an increase in domestic garment factory orders and booming business in the second half of the year.
In addition to the above reasons, the weaving and clothing industries themselves have lagging behind in production, and the situations reflected by the two at the same time do seem to be inconsistent. The weaving market is booming from October to November, and it takes at least a month of production time from gray cloth to fabric and then to the garment factory. Calculating this, it is reasonable for garment factories to be busy now.
Afterwords
The weaving factory also needs a little time at this time.Don’t be impatient, the market orders have begun to increase recently, and reorders for autumn and winter fabrics and new orders for spring and summer fabrics are being placed. Perhaps the last wave of orders before the year is on the way
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