In the field of textile and clothing circulation, Guangzhou Zhongda Textile Industry Business District plays a decisive role. After more than 30 years of development, it has become a globally renowned and domestically leading world-class textile and apparel surface and accessories trading market gathering area. “The country’s fabrics look to Guangdong, and Guangdong’s fabrics look to China and China” is by no means an empty statement.
Zhongda Textile Business District alone has 59 professional markets and nearly 23,000 merchants participating in it, with as many as 74,000 direct employees, operating more than 100,000 types of clothing accessories, and an estimated annual transaction volume of more than 200 billion yuan.
Clothing is one of the categories with the highest penetration rate of e-commerce, but the Internet cannot replace the manufacturing process. Although the clothing market has experienced 20 years of e-commerce, the wholesale market in the Zhongda Textile Business District is still thriving. The reason is that the texture of the fabrics required for making clothes must be determined through actual contact, which is a step that the Internet cannot replace.
At the end of January, all 59 professional wholesale markets in the Zhongda Textile Business District postponed their opening. As of March 9, the Guangzhou Textile Trading Park resumed business, becoming the first in the Zhongda Textile Business District to welcome the Come and resume the market. For more than a month, downstream garment factories have been unable to obtain raw material supplies, which has affected the recovery progress of the garment industry.
Shahe is one of the three major clothing trading centers in Guangzhou. One of its most well-known wholesale markets, Wanjia Clothing Wholesale Market, officially resumed operations on March 17. Many merchants in the market told reporters, Since the factory has not yet fully resumed work, most of the current supply comes from pre-holiday inventory.
In the early stages of the epidemic, many wholesale market merchants prepared new clothing for this spring in advance. However, due to the epidemic, this part of the demand did not have enough time to be released. In addition, the sales cycle in spring is short. , resulting in a backlog in the wholesale market. At the same time, due to insufficient fabric supply for new seasonal summer clothing and unsatisfactory resumption of work at garment factories, merchants are also likely to miss out on the upcoming summer clothing sales.
As for the impact on the downstream industry chain, according to the industry survey results of Guangdong Province’s clothing and apparel industry in early March, there were 71.2 % of the surveyed companies reported that the current upstream and downstream companies in the industry chain are starting operations out of sync, resulting in insufficient supply of raw materials and auxiliary materials and poor sales channels.
“The epidemic has indeed disrupted the rhythm and arrangement of the entire industry chain.” Bu Xiaoqiang said in an interview with reporters that according to the seasonal sales of the clothing industry, March and April each year are the best months for summer clothing. As for the delivery time, June and July will turn into the off-season for sales. The current recovery of passenger flow and logistics is not ideal, which will affect the cash flow of enterprises.
Fabric supplier Yang Dongwei told reporters that the three months after the resumption of work during the Spring Festival in previous years were the most important months for merchants, because the turnover accounted for 35%, and the remaining nine months accounted for only 65%. %, he is already prepared to suffer losses throughout this year.
The current situation of textile and garment factories during the epidemic: Various problems have become a nightmare for the boss!
Nowadays, it is becoming more and more difficult for clothing companies to operate. The reasons are:
1. Orders are getting smaller and smaller
This is easy to understand. Consumers are becoming more and more rational, do not like to wear the same style of clothes, and are becoming more and more customized.
In the past, when many textile and garment factories received an order, each style would often cost tens of thousands to hundreds of thousands. Once the goods were shipped, they would be shipped in at least one cabinet or even several cabinets, but now it is very common. There are very few customers like this. Even if there is one cabinet, it is rarely one style, but many styles, many colors, and even many orders put together. Generally, it is normal to buy hundreds of pieces of each style and color. , so now the requirements for factories are higher. Many factory owners and managers are often troubled by this. Many orders and payments need to be processed constantly, and the procurement requirements are also higher. In the past, one material could be purchased a lot, slightly more I am not afraid at all, and my bargaining power is strong. Nowadays, it is often the case that the minimum order quantity cannot be met, and I have to find it myself in the market. The requirements for the warehouse management capabilities of the clothing factory are even higher.
2. Fierce competition
Due to the large number of garment factories, many small factories lower their prices one by one in order to grab orders. Profits are extremely thin. This kind of mutual harm is digging your own grave.
3. Current situation of foreign orders
Because the epidemic is spreading in foreign countries, and foreign countries have insufficient control over the epidemic! As a result, economic exchanges between countries are interrupted and at a standstill! If the manufacturers here have not yet shipped the goods, they are holding back the goods and the funds! Want to cry but no tears! , the manufacturer who took the order was unable to meet the delivery date and canceled the order! There are also cases where the goods are canceled because even if they can be rushed out, the goods cannot get out of customs and arrive at the shore! Canceling is not the worst outcome! At least it’s not as miserable as holding on to goods!
4. Current situation of domestic sales
Traditional wholesale routes include Shahe, Yimin, Shisanhang Hongmian, Zhanxi, etc. Manufacturers that deal with this type of route, Most of the production in the first half of the year, spring and summer, is cut off at the beginning of the year! Just forget that the ones I made at the end of last year are sold out, and now I’m going to start the fall and winter season!
As for why you don’t do spring and summer replenishment, what are the reasons?
1. Spring and summer are relatively short, and the production cycle is long!
The current labor force is insufficient and uncertain, and the return of jobs is abnormal! resulting inThe manufacturer cancels the periodic plan! I’m afraid that I’ll miss the sale date after making it, which will lead to a shortage of goods!
2. Profits are getting lower and lower
Every owner of a clothing factory knows that the profits of clothing used to be very high, with a gross profit margin of 20-50%. It is normal. Except for fashion, leather, underwear, swimsuits, etc., which are now more profitable, the profits are still relatively good (but not as high as before). The profits of other clothing are basically only about 3%. Coupled with a lot of pressure on payment, it should be said that current garment factories are basically raising workers at the risk of losing their fortune.
3. The market changes rapidly
Because the current clothing changes too fast. Generally, factories are required to have tight delivery deadlines. This also caused delays in the middle of production at the factory. So now the factory bosses are worried about not having the goods but the workers to make the goods, and the second time they are worried about the workers but not the goods to make the goods.
4. Deduction of processing fees
Since the current clothing market is not very prosperous, some companies often pick up some problems after delivering the clothes to the processing factory. If you speak out, processing fees will be deducted. This is also a very difficult thing for factory owners.
5. It is becoming more and more difficult to hire workers.
Workers working in garment factories all know that most of the current workers are people over 30 years old. Lord, what are the characteristics of this group of people? People in their 30s and 40s are the breadwinners of the family. They have elders above them and children below them who need to be taken care of. If these people’s wages are low, they will not be able to maintain the family’s livelihood. , Therefore, the wage requirements for these people are generally higher, but they are too high due to factory profits and they cannot afford to hire them. This is a dilemma for garment factories.
The apparel industry has suffered heavy losses, which has seriously dragged down the polyester and weaving markets!
The apparel industry has suffered heavy losses this year due to the impact of the epidemic. As the most downstream of the industrial chain, its market conditions also affect every link upstream. The demand side has shrunk severely, and the market prices are transmitted to each other from top to bottom, linking one link to another, causing each link to be intertwined with each other and put great pressure on each other.
1. In the first quarter, the price of raw materials fell by more than 2,000 yuan, and profits shrank by more than 100%.
Since this year, the price of raw materials has continued to plummet, making weaving manufacturers more It’s because I feel unsure. As of the 26th, the prices of various polyester filament products have dropped to varying degrees from the beginning of the year, and the declines have all been more than 25%. Specifically, the price of polyester filament FDY 150D product is around 5,350 yuan/ton, a decrease of 2,250 yuan/ton from the beginning of the year; the price of polyester filament POY 150D product is around 4,720 yuan/ton, a decrease of 2,380 yuan/ton from the beginning of the year; The price of polyester filament DTY 150D product is around 6,600 yuan/ton, a decrease of 2,250 yuan/ton from the beginning of the year.
Prices plummeted, and profits were not optimistic. As of the 26th, the profit of polyester filament FDY 150D products was around 1 yuan/ton, a decrease of 186 yuan/ton from the beginning of the year, a decrease of nearly 100%; the profit of polyester filament POY 150D products was around -229 yuan/ton, a decrease from the beginning of the year. The profit of polyester filament DTY 150D products was around -49 yuan/ton, a decrease of 186 yuan/ton from the beginning of the year, a decrease of more than 135%.
2. The price of gray fabrics fell seriously in the first quarter, and inventory hit a new high
In 2019, due to the repeated trade between China and the United States, the market continued to be poor. Before the Spring Festival of 2020, the market had not improved significantly. Beginning in January, the COVID-19 epidemic began to spread in the country, resulting in repeated delays in the resumption of work in the textile market after the year, about one month later than in previous years. The epidemic has led to heightened global concerns. Both domestic and foreign trade demand have been severely weakened, and many orders have been canceled and delayed. The insufficient follow-up of new orders by weaving manufacturers has led to the continuous accumulation of gray fabric inventory. According to statistical data, the current gray fabric inventory in Shengze has risen to around 43-44 days, exceeding the highest inventory point last year.
Insufficient demand and high inventory, the most direct result is that the price of gray fabrics continues to be Compression, especially for conventional products, has low production thresholds, large daily output, and serious homogeneous competition. The worse the market is, the more chaotic the prices will be. Take 210 polyester taffeta as an example. Recently, because it can be used as protective clothing, it has become a hot seller in the market and has become an “Internet celebrity” among low-end products. The market demand has increased, driving its price up compared with before. But overall, there is still a certain gap between the prices at the beginning of the year. And if the previously discontinued machines are restarted for production, their prices are still expected to return to low levels.
The epidemic has put the entire industrial chain of the textile and apparel industry in a vicious cycle of severely weak demand and prominent overcapacity. If the market wants to get better, it still depends on the demand of the apparel industry. But the very real problem is that the global epidemic is still spreading, especially in European and American countries. The epidemic is serious, it is difficult to resume work, incomes have shrunk, and it will take a long time for consumption to recover. When it is transferred to the domestic industrial chain, the prospects are also unclear. </p
