Although March and April are the traditional peak sales seasons, the foreign trade situation in the fabric industry is still far from optimistic.
“Since last year, the inventory of foreign clothing has remained high, resulting in the company’s overseas orders not being very good.” Ouyang, General Manager of Suzhou Jingzhi Textile Technology Co., Ltd. Hong said, “We mainly do foreign trade business in Europe and the United States. Now the company sends emails to overseas customers, but they basically don’t reply, and there are very few orders completed.”
However, a quick mind Textile foreign trade people never wait for a turn of events. The domestic market has huge potential, and “business at your doorstep” is also worth doing.
In order to curb the spread of the new coronavirus, many countries have further tightened control measures. Recently, department stores and shopping malls in many overseas places have once again suspended operations.
The collective misfire of foreign clothing has affected my country’s foreign trade companies
At present, the overseas epidemic is still severe, and foreign clothing brands have suffered serious losses due to the epidemic. The phenomenon is still continuing.
Data released by McKinsey Consulting in March showed that by the end of 2020, the textile and apparel industry had lost 20% to 25% of its sales, of which the European market lost 25% ~30%, and the US market lost 20%~25%. Currently, the value of unsold ready-made clothes in stores and warehouses is approximately US$168 billion to US$192 billion (equivalent to approximately 140 billion to 160 billion euros), more than twice the amount before the epidemic.
For my country’s foreign trade fabric companies, foreign clothing brands are poorly managed and continue to suffer losses, so the demand for fabrics and gray fabrics will naturally shrink. China’s Keqiao Textile Index shows that recently, international market demand has been weak, and foreign trade marketing prices and volumes have fallen. Data show that at the beginning of the year, the textile export volume of Keqiao District, Shaoxing City declined month-on-month, and exports showed a month-on-month downward trend. Among them, the foreign trade price index of chemical fiber filament fabrics fell by 9.23% month-on-month; the foreign trade price index of daily home textile fabrics fell by 15.83% month-on-month; and the foreign trade price index of knitted and crocheted goods fell by 21.35% month-on-month.
According to the Spanish “El Pais” report, the emergence of the epidemic has greatly impacted the textile and garment industry. The forced suspension of business activities has led to the industry’s sources of income drying up and forced many Well-known European and American brands are protecting their cash flow capabilities by canceling and delaying orders or postponing payments. A head of a Spanish clothing company who did not want to be named said: “During the period of lockdown in Europe, our payment time for all suppliers was extended by 30 days. This has a big impact on them, but this is a matter of concern. It is a matter of our survival.”
In this regard, the relevant person in charge of a fabric company in my country said that many foreign clothing brands now have limited ability to withstand risks, and companies are unwilling to risk orders Cooperate with them to deal with risks such as delays and inventory backlog at any time.
Adjust the strategy from external to internal to tap the potential of the domestic demand market
Due to the timely shift to the domestic market, some countries in our country used to focus on foreign trade. Fabric companies can embrace new opportunities.
Previously, most of the polyester-cotton and 100% cotton fabrics produced by Hubei Jinhengchang Textile Co., Ltd. were exported overseas. In 2020, due to the impact of the epidemic, traditional textile and clothing exports were greatly affected. Although Jin Hengchang has gradually restored production capacity since June 2020, the order situation is not ideal and inventory pressure is increasing day by day. Ma Hang, general manager of the company, said frankly: “Our inventory reached its peak in October last year. At that time, inventory worth more than 30 million yuan was suppressed. The company was under great financial pressure.”
In order to withdraw funds as soon as possible and achieve a virtuous cycle, Jin Hengchang must adjust its sales strategy. “On the one hand, we have improved product quality through technological transformation, and on the other hand, we have increased domestic sales personnel, closely focused on domestic garment factories, printing and dyeing factories, and embroidery factories to develop domestic customers, and tried every means to expand the domestic market. We finally achieved a balance between production and sales by the end of 2020. “Malaysian Airlines said.
The spring of 2020 is the most difficult “gold, three, silver and four” for Foshan Mingzhou Textile Co., Ltd. Liu Qinghai, chairman of the company, received calls from foreign customers for several days in a row and was told that orders were canceled or shipments were delayed. At that time, about 90% of the company’s employees had returned to work, all equipment in the workshop was shut down, and fabrics worth about 60 million yuan were stocked in the warehouse.
“If nothing is done, the company will lose money and personnel will be lost, which is very detrimental to future development.” At this time, Liu Qinghai made a bold decision and passed The company has aggressively added domestic production capacity and recovered “disappeared” orders. In April 2020, Mingzhou Textile opened a production line specifically for domestic sales and recruited more than 40 new employees. Hard work pays off. In just six months, this domestic production line has brought an output value of nearly 20 million yuan to Mingzhou Textile.
As a key foreign trade enterprise in Baoji City, Baoji Dadi Textile Co., Ltd.’s products are sold in more than 40 countries including the United States and South Korea. Affected by the epidemic, the company’s foreign trade export orders have declined significantly. In order to achieve stable development, Dadi Textile changed its thinking and business methods and actively explored the domestic market. The company’s general manager Liu Hongbing led the sales staff to non-stop participation in fabric accessories exhibitions across the country. Through frequent communication with local merchants, large sales orders were signed on site, which effectively alleviated the impact of the epidemic on the company’s exports.
“In the past, we 7.�Customers are in foreign countries and 30% are in China. But this year, the proportion has been reversed, with 30% of customers abroad and 70% at home. Chen Qun, corporate culture manager of Huafu Fashion Co., Ltd., told reporters that in recent years, China’s textile market has shown a significant high-end trend. Products originally designed for foreign markets are also selling well in the domestic market, and are highly accepted by downstream companies.
After doing foreign trade business for so many years, companies will inevitably have inertia. In the eyes of many fabric companies, “turning from external to internal” was initially just to relieve the anxiety caused by the stagnation of foreign trade. However, after doing it, I gained confidence, and switching from external to internal became the company’s active choice.
Creating the problem of domestic sales transformation and accelerating the development of a wider market
Nowadays, the huge potential of the domestic consumer market is being rapidly stimulated, which gives a group of fabric companies more confidence to start domestic sales business. However, the market “cake” is shrinking, there are many competitors, and the domestic market The increasingly fierce competition has also caused many textile companies to encounter Waterloo.
In the process of expanding the domestic market, Jinhengchang Textile started a “price war” with its peers. Malaysia Airlines said frankly, Although lowering product prices has stabilized the market, declining profits are like cutting meat for companies. Especially in the highly competitive textile industry, there is little room for price reduction. “Our approach is to extend the industrial chain upwards. Currently, the company’s second-phase factory building is accelerating construction and is expected to achieve trial production in October this year. By then, the company will directly purchase cotton raw materials from the domestic market and produce its own cotton yarn for spinning. After calculation, Malaysia Airlines said, “If we produce and sell it ourselves, the cost of 1 ton of yarn can be reduced by about 600 yuan.” When applied to fabrics, the cost of 1 meter of fabric is 0.1 yuan/meter lower than that of other companies. The competitiveness is still very obvious. ”
In order to win more domestic orders, Mingzhou Textile has carried out two major innovations: First, targeting the domestic market demand, in terms of fiber use, style, The product concept and other aspects have been treated differently from the export product production line; second, through process upgrading, more energy-saving, environmentally friendly, and higher-efficiency production has been achieved. “Take water as an example, the newly built production line has a lower bath ratio, and the dyeing of a vat of cloth Water consumption can be more than doubled compared to traditional production lines. “Liu Qinghai said.
In order to help foreign trade companies smooth their sales channels, supporting policies in various places are also constantly increasing. For example, Zhejiang implements the “Zhejiang Goods Traveling World” action, “going north” and ” Expand the market in multiple directions, including “going south”, “going east” and “expanding west”. Guangdong has introduced a number of measures to support the conversion of exports to domestic sales, including building an online platform for export products to domestic sales, and encouraging Guangdong’s foreign trade companies to expand sales channels.
“The introduction of a series of measures to support exports to domestic sales has been of great help to the company, providing guarantees for enterprises to expand the domestic market, and has strong operability. Liu Hongbing said.
Of course, this does not mean that fabric companies should give up the foreign trade market. Zhao Jinping, director and researcher of the Foreign Economic Research Department of the Development Research Center of the State Council, suggested that while looking for domestic sales opportunities , while expanding domestic sales space, companies can use their own conditions to adjust market targets in the sales market, avoid high-risk areas, and develop markets in low-risk areas such as ASEAN and Central Asia.</p
