The textile and clothing industry is a traditional pillar industry in Zhejiang Province. It is a basic consumer goods industry that creates a better life for people and an industry that protects people’s livelihood. It is also a fashion consumption industry. The Linping District Fashion Industry Federation of Hangzhou City recently conducted on-site visits to investigate the impact of the epidemic on more than 40 companies.
01
The impact of the epidemic on the fashion industry
1. Serious impact on production plan
Due to pressure from reduced upstream orders and epidemic prevention and control requirements, many production and processing companies are on half-vacation and half-office status, which has seriously affected corporate production plans. This year’s target performance completion rate continues to decline. The waste of funds caused by factory shutdowns is huge, and the cost pressure on enterprises is increasing every day. Many small, medium and micro enterprises have been unable to bear it and have not escaped the fate of bankruptcy.
2. Significant impact on logistics, transportation and supply chain
Due to the spread of the epidemic in many places across the country, Haining, Keqiao and other wholesale markets for fabrics and accessories are unable to deliver goods due to epidemic control. Overseas imported fabrics are stranded at the Shanghai port, and corporate raw and auxiliary materials are Failure to arrive in time results in insufficient market supply, which affects the production cycle of many clothing companies and further increases the instability of the supply chain. Even after construction starts, it is difficult to respond in time, which brings great uncertainty to business operations. Coupled with the strict control over express delivery in many regions, many express delivery cannot be delivered, which has a huge impact on online sales of clothing and a serious decline in performance.
3. The consumer market is sluggish, and the inventory of spring and summer clothing is serious
It is currently the peak sales season for spring and summer clothing. Affected by the interruption of logistics and transportation and the supply of goods, the sales of spring and summer clothing have almost stopped. New styles that were originally supposed to be spring and summer clothing may have passed the peak sales season and have to become inventory. Backlog. In addition, due to business cessation, shopping mall closures and other reasons, many clothing companies’ offline stores are closed or no one is consuming, and the company’s offline sales performance has declined rapidly, which will further affect the company’s overall operations and management. How to ensure the income of employees and how to stabilize relationships with suppliers and franchisees are all a series of challenges that companies face.
4. Shortage of frontline workers and high-tech talent
Affected by the epidemic, the original talent exchanges with international talents or international companies cannot be carried out as scheduled, and the dispute resolution channels for cross-border e-commerce companies during their operations will be blocked. further affects the credibility of the brand. In accordance with the epidemic prevention and control requirements of relevant departments, personnel movement is restricted, resulting in insufficient labor employment.
5. Technology-based enterprises have certain needs for funds
Affected by the epidemic, the business of the garment industry cannot be carried out normally. Expenses such as paying employee wages, purchasing raw and auxiliary materials, paying rent, and paying suppliers have only increased. Many garment companies are under excessive pressure, so they have suspended operations. The originally planned smart workshop digital transformation project was completed. Software companies that provide advanced standard working hours systems, new generation retail store management tools, transformation and upgrading ofintelligentfactories and other services to downstream garment enterprise customers are facing a shortage of capital chains. , more working capital is needed to provide blood transfusion for the enterprise.
6. Strengthening interaction and communication between enterprises is a common need of enterprises
Due to epidemic control, companies have fewer opportunities to participate in exchange activities such as salons and trainings. Even small-scale inter-company exchanges cannot be carried out normally due to space and other issues. Enterprises are eager to promote cooperation through more exchanges among peers.
02
Countermeasures that have been taken so far
1. Most companies are actively transforming and seeking new directions for industry development
Member companies of the Federation keep up with the new situation and new requirements of the development of the fashion industry and actively explore new ideas for industry development. Naya Clothing closely follows advanced management concepts and experience, independently develops and applies digital management technology, and uses digital technology to empower corporate management and operations; Tianyuan Pets, as a leading company in pet supplies, actively develops and uses new technologies such as Internet of Things technology to make pets GPS, pedometer, etc.; Junshi Fashion and Jacket, etc. focus on product research and development and brand positioning, and use brand building to support highquality transformation and development. It can be seen that in the face of crisis, enterprises themselves actively transform and upgrade and seek breakthroughs.
2. The Federation actively helps enterprises to connect and help enterprises to bail out
As an important starting point for the development of the fashion industry in Linping District, the Federation fully exerts its role as a platform and bridge, actively carries out corporate exchange activities, helps member companies build advantageous resources, enhances interaction and integration between more companies, and promotes corporate information Interoperability and teamwork for development. In 2021 alone, it will organize and co-organize 20 events, integrating upstream and downstream supply chain resources through regular industry salons, organizing industry exhibitions and industry conferences, exchanges and visits, industry forums and other activities to help companies solve pain points and difficulties.
03
Business needs
However, despite the active “self-rescue” of enterprises and the active actions of the federation, based on on-site visits, the Linping District Fashion Industry Federation learned that enterprises still hope that relevant departments can issue a relevant package of support policies.�� to help enterprises overcome difficulties together. Based on the opinions of enterprises, the following suggestions are made:
1. Encourage enterprise product innovation and model innovation
Companies that are the first to embrace new technologies and continue to innovate new products and new models will have a better chance of capturing new opportunities brought by all new changes. It is hoped that relevant departments can formulate specific measures to promote technological innovation of textile and garment enterprises as soon as possible, such as supporting the cooperation between a group of research institutions represented by the China Garment Science and Technology Innovation Research Institute and textile and garment enterprises. Industry-university-research cooperation can be provided in stages from the contract signing stage of technology development or technology transfer to subsequent testing, application, and promotion until the formation of new technologies, new processes, new products, new services, and new standards, until the final transformation and industrialization stages. direct subsidy. Focus on promoting the fashion industry brain project, supporting intellectual property industrialization projects focusing on invention patents, and assisting the digital transformation of enterprises. Promote the innovative development of foreign trade, support the development of new business formats such as cross-border e-commerce, overseas warehouses, and comprehensive foreign trade service enterprises, expand the pilot market procurement trade method, and promote the export of textile and clothing enterprises. Give full play to the role of export credit insurance in risk protection and financing credit enhancement, further expand the coverage of export credit insurance, and provide good services for foreign trade companies to overcome obstacles and achieve stable and long-term development.
2. Encourage enterprises to promote the digital transformation of supply chains
It is hoped that relevant departments will introduce relevant policies to support enterprises in rapidly advancing the construction of supply chain platforms, promote the construction of industrial Internet platforms, optimize supply chain design and operations, strengthen supply chain collaboration among textile and garment enterprises, and alleviate the problem of poor supply chains among enterprises. Support enterprises to enhance supply chain stability, promote flexibility, refinement, and efficiency of enterprise supply chain management, promote the larger scale and wider application of flexible supply chains, and improve the speed and flexibility of production to respond to the market. Enterprises are encouraged to create a networked organizational structure of “small front-end + large platform”, using multiple value creation units within the enterprise as small front-ends to keep in touch with external personalized needs, and provide back-end service management, resource integration and configuration for each unit, and Enterprise organizations are built into a two-way interaction platform between resources and users to improve organizational efficiency.
3. Support enterprises to strengthen docking and exchanges
In view of the urgent need of enterprises to carry out exchange and docking activities, firstly, it is hoped that relevant departments will do more “matchmaking” and carry out learning in the fields of textile and clothing product technology, new media operations, fabric trends, legal finance and other fields through training, symposiums and other forms. activities to promote linkage and cooperation among enterprises. The second is to appropriately relax the management of gathering activities, and on the premise of standardizing the implementation of epidemic prevention and control measures, allow social organizations and other third-party institutions to organize corporate exchange activities such as salons, conferences, trainings, talent exchanges for designers, pattern makers, and anchor operations. . Third, it is hoped that appropriate funding subsidies will be provided for talent exchange and enterprise exchange activities organized by third-party organizations, especially for training activities involving external experts, appropriate labor subsidies will be provided to professional technicians and experts.
4. Ensure that policies to benefit enterprises are implemented in place
Recently, the relevant departments of Hangzhou City have successively launched the “40 Policies to Promote the Restoration and Development of Difficult Industries in the Service Industry”, and Linping District issued the “Linping District Policy Opinions on Promoting the Restoration and Development of Difficult Industries in the Service Industry” to provide greater assistance Difficult industries have overcome difficulties and resumed development. It is hoped that relevant departments can publicize and implement these policies in place, especially the implementation of inclusive relief support measures such as delayed payment of medical insurance premiums for enterprise employees and tax reduction and fee reduction. It is hoped that more business-friendly policy activities such as talent policy interpretation and corporate patent subsidies can be carried out to effectively help small, medium and micro enterprises. It is also hoped that specific measures to promote consumption can be formulated as soon as possible, and various activities such as supporting domestic products and promoting clothing consumption can be actively carried out to stimulate domestic demand and activate the market.
5. Continue to increase tax exemption and support policies
It is hoped that relevant departments will further increase tax reduction and exemption support policies for textile and garment enterprises. For textile and garment enterprises that are general taxpayers, the value-added tax paid will be directly refunded. The value-added tax paid by the enterprise in 2021 will be refunded. All, half or one-third of the amount will be directly returned to the original enterprise and original account, eliminating many audit and management links and directly benefiting all enterprises. Now that the labor costs of enterprises are very high, we hope to reduce the base of social security contributions; enterprises can be exempted from paying the corporate part of the “five insurances and one housing fund” in 2022; and enterprises that do not lay off employees or have few layoffs will continue to implement inclusive unemployment insurance and stable job return policies.
Summary
At present and in the future, my country’s textile and apparel industry is facing both new development opportunities and many challenges. During the “14th Five-Year Plan” period, the Linping District Fashion Industry Federation will focus on the goals and ideas of service companies, service industries, and service industries, gather development forces within and outside the industry, and coordinate with relevant departments to help fashion companies in the district overcome the difficulties and We will overcome the difficulties together, help Linping build a fashion innovation highland in Hangzhou, promote the construction of Zhejiang’s “fashion capital”, and contribute to the new journey of the Chinese clothing industry in a new era.
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