Adjusting the structure of the textile industry: it varies by “enterprise”

Since the beginning of this year, my country’s textile and apparel exports have been facing a severe situation. Decreasing orders and small market procurement demand have made it difficult for my country’s textile export enterprises to do export business. In response to the export crisis, more and more companies are choosing to adjust their product mix, but how to adjust varies from company to company.
​Export orders have decreased
“Recently, we have clearly felt that the export situation is severe. Since the first three months of this year, our company’s export orders have been very few, and business operations have become increasingly difficult.” The person in charge of a textile import and export company in Ningbo lamented road.
Manager Qian, the head of the small and micro enterprise Changshu Youli Textile Trading Co., Ltd. in Jiangsu Province, also feels that life is not easy. She said: “We mainly sell winter fabrics. Due to the poor global economy, both volume and price have dropped since the end of last year. situation.” “Although the export situation of our company is good from the current point of view and has not declined sharply, we can still deeply understand that the overall export is not prosperous.” Gao Pinya, manager of Jiangsu Hongdou Import and Export Co., Ltd. said, “Recently, one of the factories we work with suffered losses due to a 30% reduction in orders from British buyers.”
Chun, deputy general manager of Ningbo Shanshan Fashion Co., Ltd., said: “At present, the overall feeling is that the global market recovery is not obvious. Our company’s export situation has not changed much recently. The export volume has dropped slightly and the price has increased due to labor cost factors.”
Although the current export situation of my country’s textile and apparel is not good, Shan Pengchun is full of confidence in its future situation. “From the perspective of the whole year, I am more optimistic about China’s textile and apparel export situation. There are three reasons: first, the depreciation of the RMB, second, the increase in the tax rebate rate, and third, the country’s favorable policies for exports. These have brought certain competitive advantages to enterprises, but It does take time for exports to improve,” Shan Pengchun said.
​High inventory, low purchase quantity
The person in charge of many textile and clothing export companies said that the decline in export volume means that market demand is not strong. A salesperson from the Yarn-dyed Co., Ltd. said: “Since the beginning of this year, my country’s textile and apparel exports have not increased due to slow sales and high inventory pressure from global retailers at the end of last year, which led to a decline in purchasing demand. Taking the United States as an example, our buyers are They had a huge backlog of inventory during Christmas last year and they needed time to digest it, so they cut back on purchases.”
In addition, the decline in raw material prices is a major reason for the decline in textile exports. In this regard, the person in charge of Unitextile said: “With the decline in raw material prices, our export prices have been unable to increase. Buyers’ price reduction and high labor costs are all important reasons for the reduction of corporate profits.” Chen Jun said: “The price of raw materials has dropped sharply, and the price of our fabrics has also dropped. Because buyers always have the mentality of buying up and not buying down. Now many foreigners are waiting and watching. The current order volume is 70-80% of the previous one. They are in Wait for prices to continue to fall.” Xiao Jingyao, vice president of Huafang Group Company, also said that the global economic downturn has made international consumers’ purchasing behavior more rational, resulting in both export volume and price falling.
​Adjust product structure to cope with crisis
In response to the textile and apparel export crisis, many companies will choose to adjust their product structure. However, how to adjust varies from company to company.
Gao Pinya, manager of Jiangsu Hongdou Import and Export Co., Ltd., said in an interview with the media: “Currently, we have significantly increased the proportion of mid-range products and reduced high-end products. The reason for this is because we hope to receive more large-volume orders. In the past, we mainly made high-end products, but now we pay more attention to the balance of mid-range and high-end. Currently, mid-range products account for 70% of the company’s total products, and high-end products account for 30%; in the past, high-end products accounted for nearly 70%. The reason for this The decision is first of all because the volume of high-end orders is small, and we need a sales volume of US$1 million every month to cover factory expenses, so we would rather take more orders with larger quantities but lower prices, fewer varieties, Large output can improve labor efficiency, thereby reducing operating costs. Secondly, the global economy is really not good enough, demand is not strong, and the desire to purchase high-end products is even lower.”
On the contrary, China Huafang Group Co., Ltd. is abandoning low-end products and entering the mid-to-high-end market. Xiao Jingyao said: “Now we no longer make cotton yarns below 32s, but specialize in high-count yarns. Although the global economic downturn makes consumers more willing to buy cheaper products, adjusting the variety structure is a choice we have to make. Due to the Competitors—India’s low-cost products are too cheap and more competitive than our products. If we don’t adjust, they will be eliminated by the market.”