At present, the global epidemic situation is anxious. WHO data shows that as of 18:00 on March 28, Central European Time (1:00 on March 29, Beijing time), there were 575,444 confirmed cases of COVID-19 globally and 26,654 deaths. Currently, cases of COVID-19 have appeared in 201 countries and regions around the world, and there are more than 490,000 confirmed cases of COVID-19 outside China.
Today, 60 countries around the world have declared a state of emergency due to the epidemic, and many countries have Adopting extraordinary measures such as closing cities and countries, suspending work and production, restricting business travel, and suspending visa services, almost all countries have adopted entry restrictions. This is an unprecedented dark moment for Chinese foreign trade companies!
The situation of foreign trade export orders is grim, and enterprise production is showing signs of slowing down
Recently, the overseas epidemic has been severe, and the textile and garment industry has been affected. According to the China Cotton Industry Association’s investigation into the production situation of weaving enterprises in cotton textile clusters, as the domestic epidemic situation is stabilized and controlled, the operating rate, personnel arrival rate, and equipment utilization rate of weaving enterprises have gradually increased. However, due to the epidemic, the start of work after the holiday was delayed, and companies were unable to produce and deliver goods normally. Some companies that had sufficient orders before the holiday increased their efforts to recruit workers after resuming work in order to rush to fill orders. As of March 27, the average operating rate of cluster weaving enterprises is about 70%, the average operating rate of enterprises above designated size is about 85%, and the average employee attendance rate is about 70%.
In terms of orders, the export orders of cluster weaving enterprises have decreased significantly, and some clusters have suspended or canceled orders.
If a company’s orders for export to the European and American markets drop by more than 50%; if a company’s orders for exports to Africa, Japan, South Korea and other European and American markets have not yet experienced order cancellations, but follow-up Orders have stalled. Although the majority of the clusters are small and medium-sized enterprises, with enterprises under regulated regulations accounting for more than half on average. Direct export orders are limited, but many orders are entrusted by large enterprises for processing, or products are exported indirectly, so the degree of impact is also greater.
In terms of start-up, in the last week of March, some cluster weaving enterprises began to limit production, and some enterprises under the internal regulations of the cluster suspended production, and the equipment utilization rate declined. As of March 27, the weaving equipment utilization rate of the surveyed cluster enterprises was around 55%, which was a decrease compared with last week.
In terms of funds, on the one hand, companies have been delivering pre-holiday orders one after another, and capital turnover has slightly improved; currently, due to frequent breaches of contracts, order cancellations and other phenomena, companies have directly experienced inventory backlogs; Some companies’ export goods are piled up at the port and unable to leave the port; overall, the amount of capital occupied has increased and the pressure on capital turnover is greater; on the other hand, the recent rapid decline in raw material prices has caused greater losses to companies that purchased raw materials years ago.
In terms of employment, the company had insufficient employment in the early stage and was unable to meet production needs. It has continuously increased its employee on-the-job rate by recruiting a large number of employees. Recently, Orders are decreasing rapidly, companies are facing intermittent production, and labor costs are putting great pressure on them.
In terms of countermeasures, the foreign trade situation may have a greater impact on the later start-up of enterprises. Some enterprises have stated that they will reduce costs, improve order quality and delivery time, shift some to domestic sales, or develop new products. market and other measures to mitigate the impact and strive to maintain continued production. Since there are many uncertain factors affecting the market, industry insiders suggest that companies should act within their capabilities and strictly control risks while maintaining an orderly resumption of work.
China’s foreign trade companies are under pressure during the epidemic. How will the industry reverse the situation in the future?
According to data from the Ministry of Commerce, from January to February, my country’s total foreign trade import and export volume was 4.12 trillion yuan, a decrease of 9.6% compared with the same period last year. Among them, exports were 2.04 trillion yuan, showing a double-digit decline. The spread of overseas epidemics has caused many countries to adopt strict prevention and control measures, and has also put domestic foreign trade companies under tremendous pressure.
The global epidemic has once again impacted China’s foreign trade textile industry, which has just resumed work. Facing the intensification of the global epidemic, many companies are in a dilemma: if they produce goods, they may be rejected, but if they do not produce goods, they still have to pay the cost of workers. In order to “self-help”, many foreign trade companies have switched exports to domestic sales, and have also tried to live-stream “bringing goods” to the online front.
It is feasible to switch from domestic trade to domestic trade in the short term
In the short term, It is not a bad idea to switch from foreign trade to domestic trade. According to a recent data released by the Ministry of Industry and Information Technology, in November 2019, there were 13,760 enterprises above designated size in the garment industry, with a cumulative operating income of 1.0777 billion yuan. Such data is enough to show that there is a huge market for domestic trade that needs to be explored. In addition, as Sino-US trade relations remain at a stalemate, the market conditions in recent years have shown that domestic trade is better than foreign trade, so the domestic trade market does have greater potential.
Foreign trade companies turning to domestic trade have certain advantages in products. Most domestic clothing trends come from abroad, and foreign clothing companies tend to have more fashionable products and cater to trends. Compared with domestic trade companies, the products have certain competitive advantages. At present, many new generation consumers have shifted from a single consumption demand of food and clothing to cover their bodies and avoid the cold, to a personalized demand that takes into account fashion and culture, and this demand is repeated.�So much faster than ever before. Therefore, foreign trade companies may be able to open up a whole new world by switching to domestic trade sales.
But in the long run, switching from foreign trade to domestic trade is only a temporary expedient, not a long-term solution. First of all, the epidemic is temporary. Although we cannot predict when it will end, it will eventually dissipate. When the epidemic is over and spring blossoms, textile foreign trade will also pick up. The textile industry in many foreign countries is in the ascendant. When the world defeats the virus, the reborn textile market will usher in a good opportunity for exports!
Online marketing may become a new way out
Due to the impact of the epidemic, The entire textile industry chain around the world is facing many challenges from production, procurement to sales. Online marketing and promotion have become new models pursued by traditional textile companies. Recently, “Zhongmao Home Textiles” located in Keqiao successfully held an online live broadcast conference. This is also the first time that Global Textile Network and Online Textile City have successfully assisted an enterprise in holding a “cloud release”.
Zhao Junhui, the person in charge of “Zhongmao Home Textiles”, told reporters that the more than 200 new products released this time are all newly developed products this year. In just two and a half hours of live broadcast, , reaching more than 14,000 views and winning multiple orders. The company will continue to develop the B2B model and support brand development in the form of live streaming.
It is reported that “cloud publishing” uses new Internet technology and digital operation services to help textile enterprises transform and upgrade, through online publishing, online interaction, online product display, etc. to further promote the development of “Internet + services” and “Internet + operations” in the textile industry.
Summary: When will the global epidemic reach a turning point? It’s not yet known. Many people in the industry believe that the epidemic is short-lived, but industry development is long-term. They suggested that foreign trade companies should first slow down and recuperate under short-term pressure from the epidemic. Consumer demand suppressed by the epidemic will usher in explosive growth after the epidemic is over. For this reason, companies need to reserve sufficient “ammunition” to cope with the tough battle in the second half of the year! </p
