With the gradual control of the epidemic, the pace of resumption of work and production of textile and garment enterprises across the country except Hubei Province is accelerating. However, whether it is raw material prices, product inventory, transportation logistics and export orders, they have encountered unprecedented new problems and New difficulties.
What is the export market like in the post-epidemic period? Will there still be results similar to the export trend after SARS in 2003 and the annual textile and apparel export volume not decreasing but increasing? This article attempts to conduct an analysis to help the majority of textile and garment enterprises recognize market changes and improve their adaptability and adjustment capabilities.
The post-epidemic period in 2020
The textile and clothing export market faces severe challenges
According to the analysis of the China Textile Federation Industrial Economics Research Institute, affected by weakening external demand and rising risks in the trade environment, the export situation of my country’s textile industry is relatively severe. According to China Customs data, my country’s cumulative export value of textiles and clothing in 2019 was US$280.7 billion, a year-on-year decrease of 1.5%. The growth rate was 5.3 percentage points lower than the previous year, but it was 0.8 percentage points higher than the first three quarters of 2019. From the perspective of product structure, the export value of textiles was US$127.25 billion, a year-on-year increase of 1.4%; the export value of clothing was US$153.45 billion, a decrease of 3.7% year-on-year. From the perspective of market structure, exports to emerging markets performed better than traditional markets. In 2019, my country’s exports of textiles and clothing to countries and regions along the “Belt and Road” increased by 3.7% year-on-year, while exports to the United States, Japan and the European Union during the same period were respectively Decreases of 6.6%, 4.6% and 4.4%.
We can compare and summarize the impact of SARS in 2003 and this epidemic on my country’s textile and clothing product exports:
First , the two outbreaks have different time points, epidemic spread speed, and spread scope. The impact of this epidemic is much greater than that of SARS on the economy and society; secondly, the export environment was different when the epidemic broke out. Under the Sino-U.S. trade friction in 2019, the U.S. market is already the third largest export market for China, and Japan is the fourth. However, there is also an epidemic outbreak in Japan; thirdly, the inherent basic conditions for textile and apparel exports are different. Unfavorable factors such as Sino-US trade friction, the relocation of China’s textile and apparel industry overseas, rising production factor costs, and the disappearance of the demographic dividend have emerged. Therefore, we will face the test of a more complex environment in 2020.
In addition, during the epidemic in China, the United States tried to raise the threshold for U.S. market access. This will put China’s textile and apparel exports under pressure, and when competing for the U.S. market, it will face competition from other developing countries that can enjoy government subsidies; the transfer of the textile and apparel industry chain to Southeast Asia, Eastern Europe, and Africa is accelerating. The United States may next target China’s various industrial subsidies and launch targeted trade investigations to further suppress the competitiveness of relevant Chinese products in the U.S. market. As foreign trade is squeezed, domestic demand may face a period of fierce competition. Therefore, supply-side reforms must keep up.
What enlightenment does the epidemic have on product development
in the textile, clothing and chemical fiber industries?
Our country is a major textile manufacturing country and a major chemical fiber manufacturing country, with a complete industrial chain. Although at the beginning of the epidemic, due to our insufficient experience in responding to public health emergencies and insufficient emergency reserves, ” “One mask is hard to find” and “one cloth (PP melt-blown cloth) is hard to find.” However, my country’s current mask production capacity has reached 116 million pieces per day, which is fully capable of meeting public health and epidemic prevention needs, and can also be exported to other epidemic areas. nation. But after the epidemic, we may ask: Why are masks always sold out?
In fact, we should note that small masks are big business, and small masks have high technological content. First, the mask market in China is highly concentrated. From SARS, smog and now to the current epidemic, the mask market has risen with the deepening of public health awareness. Second, masks have high technological content (materials, processes, standards). Masks with strong protective functions have very high requirements in terms of material fit, filtration efficiency, impedance and mold precision. Third, masks have high brand awareness. After brand awareness is established, it is not only costly but also extremely difficult for consumers to change their existing consumption habits and replace them with new products. In other words, it is difficult for consumers to switch to other brands once they have formed a consumer awareness. Therefore, the post-epidemic mask market is bound to be highly competitive.
Another revelation we got is: the business logic of masks, protective clothing and sanitary textiles has changed. Judging from several major epidemic events at home and abroad, first, the market positioning of masks has been high, because masks, protective clothing, etc. have been included in the strategic material reserves of various countries. Second, public consumers’ hygiene habits and awareness of epidemic prevention have improved. Masks, disinfection and hygiene textiles, etc. will gradually transform from protective products into daily necessities. A huge market will be formed, and industrial textiles will have great potential. Third, the marketing model has changed. The SARS outbreak in 2003 led to the rapid rise of platforms such as Taobao and JD.com, and the online consumption model became more popular. The COVID-19 epidemic in 2020 has further led to the emergence of a large number of paid knowledge experts and live broadcast influencers, transforming the original one-way expression of graphics and text into a two-way entertainment expression of video and live broadcast. Therefore, we believe that protective and sanitary textiles are new consumer demands in the context of general health, and this industry is a sunrise for sustainable growth.industry.
Current countermeasures and suggestions
Facing the 2020 epidemic crisis is a watershed for many companies . How can companies save themselves? How to seek new development opportunities in a crisis? What changes have occurred in market consumption? The epidemic has completely changed the external environment in which enterprises operate. Most of the business models and business models that enterprises were familiar with before the epidemic may not be suitable in the face of the epidemic. Enterprise affordability, technology development capabilities, and rapid response capabilities all need to be improved and innovated, and even The industrial chain also needs to be reconstructed, and model innovation is urgent. This epidemic is testing not only everyone’s immunity, but also an enterprise’s immunity and rapid response capabilities. 2020 is the year of full commercialization of 5G, and AI artificial intelligence + big data + 5G + blockchain will bring earth-shaking changes to many industries. Various timely and agile decentralized distributed computing methods will greatly improve the operational efficiency of the entire society. This epidemic will be devastating, causing changes that should have taken 3 to 5 years to be completed in a short period of time. This is a comprehensive physical examination for every company, urging companies to make comprehensive adjustments.
Facing the resumption of work and production and product structure adjustment under the epidemic situation, we put forward the following countermeasures and suggestions for the reference of textile and garment enterprises :
First, at all levels of local government, we must implement prudent monetary policy + proactive fiscal policy + vigorous reform and opening up, and use reform as a breakthrough to help enterprises implement The various policies issued by the country to deal with the epidemic. Now that the central government has policies, the key to the problem is to implement bank credit policies for enterprises. We must sincerely help enterprises and provide precise assistance to them by category. All localities must strengthen docking with financial institutions, strictly implement the requirements for precise resumption of work and production by zoning and grading, and promote the orderly resumption of work and production of textile and garment enterprises by business type and form. It is necessary to optimize the tax reduction and fee reduction methods, and shift from the current tax reduction pattern that mainly focuses on value-added tax to reducing the social security fee rate and corporate income tax rate, so as to enhance the sense of gain of enterprises, truly benefit enterprises, and get out of the predicament. Small and medium-sized enterprises play an integral role in the Chinese economy, especially in terms of labor employment. Local governments at all levels must attach great importance to stabilizing employment, stabilizing the economy, and stabilizing exports, understand and implement various policies of the central government, and truly help small and medium-sized textile and garment enterprises to alleviate poverty.
Second, at the enterprise level, we must seize the opportunity when the globalization of the industrial chain begins to shift to regionalization, make full use of the “Belt and Road” initiative, and layout the enterprise’s production capacity at home and abroad. and order-taking mechanism. China’s textile industry is also constantly arranging international textile production capacity cooperation projects with the “Belt and Road” countries. Israel, Jordan, Pakistan, Vietnam, Indonesia and other countries will all play an important role in the future Asian textile industry chain centered on China. With the outbreak of the epidemic in Japan, South Korea, the Middle East and Italy, China’s textile and apparel exports, as the most active and largest foreign trade, will inevitably bear the brunt, causing the pressure on the textile and apparel market to miss the spring market of domestic trade to continue to increase. Major epidemics will trigger changes in people’s consumption concepts. Textile and apparel companies must grasp the needs of the knitted underwear industry in the post-epidemic period and the demand for sanitary textiles in the non-woven market. It is necessary to further build its own brand, make full use of the current low-interest loans from banks, develop intelligent manufacturing, and connect with the industrial Internet and the Internet of Things. Establish a global rapid response supply chain, industrial chain and value chain for enterprises. In terms of technological innovation, the research and development and promotion of new key fiber materials and intelligent manufacturing-related technologies, and the expansion of new application fields of industrial textiles are still the focus of development. Therefore, enterprises must introduce and cultivate technical talents, product development talents and new model e-commerce marketing talents, and constantly develop new technologies and new functional products.
Thirdly, at present, it will take time for the textile and apparel upstream and downstream markets to substantially improve. In addition, the spread of foreign epidemics may affect global consumption, and the market situation is still uncertain in the short term. It is difficult to support the growth of textile and apparel exports. However, anti-epidemic textiles will have explosive growth around the world. We must seize this favorable window period and increase the global market share of my country’s industrial textiles, driven by the export of masks, protective clothing and other hygiene and disinfection textiles. It is not impossible to make up for the gap in the decline in other textile and apparel exports and strive for the full-year export data to be the same as in 2019. We not only want “the mountains and rivers are in different lands, but the wind and the moon are in the same sky”, we also want to “the green mountains are the same as the clouds and rain, and the bright moon was never the same as the two towns.” Investment is supported by the central bank. China is driven by manufacturing capabilities throughout the industry chain and huge domestic demand. New economic growth points may emerge in the second half of the year. In East Asia, China, Japan and South Korea will form closer ties through the fight against the epidemic. The situation in East Asia may undergo unprecedented changes, and a China-Japan-South Korea free trade area may be established in the second half of the year. </p
