In the past two years, due to the rise of fast fashion, the market has seen an increasing number and scale of ready-made supermarkets. They have also replaced brands and traders in a certain sense, becoming Become the main force in receiving gray cloth and fabrics.
The pros and cons of fabric spot supermarkets
The fabric spot supermarket refers to the downstream that can buy finished fabrics directly like a supermarket. There is no need to place orders and wait for delivery as before, and it follows the path of “quick sales” and “small profits but quick turnover”. On the one hand, due to the scale effect, spot supermarkets produce large quantities and can negotiate prices with dyeing and weaving factories. Relatively speaking, the cost is lower than normal production and the quality is relatively stable; on the other hand, “fast fashion” in order to produce goods The goods are fast, and being able to follow hot spots ensures sales. Prices will not be so strict, and profits will be further increased. In addition, most of the spot sales of fabrics require clearing of money and goods, which has an advantage over conventional transactions in terms of payment collection.
Of course, fabric spot supermarkets are not without their shortcomings. In order to maintain fast shipments, the spot supermarket model requires companies to have a complete stock of various mainstream specifications and major colors, which requires a lot of money. In terms of inventory, this will require relatively high funds.
The inventory is too high, and the fabric supermarket has become a “reservoir”
The year before last, the editor also interviewed the persons in charge of several newly opened fabric spot supermarkets. At that time, a person in charge said quite bluntly that because the business in 2019 was not good, a large amount of gray fabric inventory was accumulated. These inventories were difficult to deal with by normal means, and it was impossible to sell them cheaply. Reluctantly, there happened to be an increasing number of fabric spot supermarkets on the market, which became a trend, so they simply put these stocked gray fabrics to use, and after some research, they also opened a fabric spot supermarket. After opening a spot supermarket, the own inventory of gray fabrics was no longer enough, and it was necessary to place orders from outside weaving manufacturers to replenish supplies. As a result, not only did the inventory not be disposed of, but millions were spent on stocking up.
In addition, there are also some who were originally traders. They also have a lot of inventory and have shipping channels. They also use the form of fabric spot supermarkets.
Therefore, the fabric spot supermarkets that have sprung up on the market have actually digested a large amount of gray fabric inventory, which can be understood as a “reservoir” for fabric inventory in disguise. Of course, such a “reservoir” also absorbs a large part of regular fabric orders.
The “reservoir” is filling up?
As mentioned above, although fabric spot supermarkets have various advantages, they require a large amount of funds to operate normally. When the market is good, these advantages will be amplified and it will occupy an absolute advantage in the market competition. However, when the future is bearish, the shortcomings will become very fatal.
Last week, the editor investigated a fabric spot supermarket that just started testing the water last year. The person in charge of the company told the editor that because the current profit is too low and he is not optimistic about the future market, he originally planned to stock up200 fabrics in different colors. Now we are only preparing to stock the mainstream ones. We can make them at our own factory.
Due to some reasons, international brands are more interested in Southeast Asian countries such as Vietnam than my country. Orders that can be made abroad should be avoided in China. This has exceeded the scope of “demographic dividend” and has become more of a political considerations. Coupled with inflation and residents cutting back on food and clothing, which has led to a reduction in global demand, domestic textile companies generally report that the number of orders this year is smaller than in previous years. Under such circumstances, textile people are also relatively pessimistic about the future market. Naturally, fabric spot supermarkets cannot stock up as much stock as they did when the market was good.
As a result, the “water storage” function of fabric spot supermarkets will be greatly compressed. If the market continues to weaken, downstream companies will not be willing to place large orders. If the huge capital chain is difficult to turn over for a while, some companies will “reserve water”. It may even turn into “disposal” and choose to dispose of some inventory to circulate funds, thus causing certain market turmoil.
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