Pessimism pervades textile and apparel exports; companies seek development amid adversity

The reporter visited the third phase of the 116th Canton Fair and found that due to the continued sluggish international economic situation, rising production costs and other issues, pessimism in the export market of the textile and garment industry is widespread, and the market outlook is generally not optimistic. Facing the severe situation, textile and garment enterprises have sought breakthrough points to accelerate transformation and upgrading.
Textile and apparel exports are shrouded in pessimism
The Canton Fair has always been regarded as the vane of China’s foreign trade. As the highlight of the third phase of the Canton Fair, the transaction volume of textile and clothing basically reflects the export situation in the next six months.
According to data from the China Chamber of Commerce for Import and Export of Textiles, as of November 1, the first two days of the third phase of the 116th Canton Fair, textile and apparel sales totaled US$850 million, a decrease of 2.4% from the same period of the 115th Canton Fair. Among them, the transaction amounts of cotton knitted garments and other knitted garments with the most active transactions were US$135 million and US$72 million respectively.
The traditional European and American markets are still the main export markets for Chinese textile and apparel companies, but the transaction volume has generally declined compared with the same period of the previous Canton Fair, and the sharp surge in transaction volume in the Japanese market has become a highlight. As of November 1, the European market’s transaction volume accounted for 36.4% of all transactions, which was basically the same as the same period of the 115th session, with a slight increase of 0.04%; the American market accounted for 28.2% of all transactions, a decrease of 10.6% from the 115th session, of which the United States was still the largest. The world’s largest purchasing country of textiles and clothing, the transaction volume reached 118 million US dollars, a decrease of 9.4% compared with the 115th session; Japan’s transaction volume surged sharply, the transaction value increased by 55% compared with the 115th session; the transaction value of Africa increased by 23.2% compared with the 115th session, accounting for The ratio increased from 4.1% in the 115th class to 5.2%.
Judging from the overall situation, affected by the current sluggish international economic situation, developed countries such as Europe and the United States, China’s main export markets for textile and apparel, are still recovering slowly. At the same time, stimulated by the Federal Reserve’s exit policy, capital outflows were severe, currencies depreciated sharply, and emerging market economies remained weak. The growth rate of China’s textile and apparel exports to them slowed down significantly.
Many exhibitors interviewed by the reporter also expressed pessimism about this year’s foreign trade situation.
“Our company is under greater pressure this year, especially the weak demand in the United States. Due to the relatively large inventory last year, the United States is mainly digesting inventory this year.” Wang Changzhao, deputy manager of the International Business Department of Lutai Textile Co., Ltd. said.
Wang Changzhao believes that the overall economic situation is not good, and the fourth quarter is the off-season, exports will be the worst quarter, and the first quarter of next year will continue to be poor, and there will be no signs of recovery until the second quarter.
The person in charge of Jiangsu Sainty Clothing Co., Ltd. said that the foreign trade situation this year is not good, and the overall growth is slow. It was originally expected that the revenue growth this year could reach 10%, but the transaction volume in the European market has dropped significantly, and it currently seems that it can only reach 4.5%. With an increase of -5%, I believe that the European market will not improve much next year.
The person in charge of Zhejiang Shenying Group Co., Ltd. also said that the company’s export situation this year is not good, and the company’s revenue is generally flat, mainly due to the decrease in orders from the European and American markets, especially in the first half of the year, the European market transaction volume decreased by 10%-20% .
Data from the Textile Chamber of Commerce shows that from January to September 2014, China’s textile and apparel exports totaled US$138.8 billion, a year-on-year increase of 6.5%, and the growth rate dropped by 5.8 percentage points from the same period last year.
Enterprises strongly reflect rising costs
​As a traditional labor-intensive industry, China’s textile and apparel industry is extremely sensitive to rising costs. In recent years, labor costs have continued to rise, and production costs have also “rised,” and the price advantage is gradually being replaced by Southeast Asian countries. The reporter learned from interviews that companies have the strongest response to the dilemma of high costs.
“The main problem facing the company at present is high costs, especially labor costs.” said Han Xiaoying, deputy manager of the second international business department of Lutai Textile Co., Ltd.
Jiangsu Sainty, Shanghai Textile and Zhejiang Shenying Group interviewed by the reporter also said that rising costs are the biggest problem facing enterprise development.
In addition, some companies said that issues such as trade barriers and RMB exchange rate fluctuations have caused certain problems for exports.
Wang Changzhao pointed out that the European Union, the United States and other regions and countries have successively issued a series of regulations and standards on textile and apparel, which will inevitably put forward higher requirements for enterprises to export products and become a major trade barrier affecting textile and apparel exports.
Han Xiaoying believes that the impact of exchange rate fluctuations is also direct. As long as the RMB appreciates, it will be a net loss for enterprises.
​Exploring new advantages in adversity
Facing many irreversible difficulties, some companies told reporters, “In fact, difficulties are also opportunities, which can prompt us to change.” “Doing ourselves well is the key, and we must tap our own advantages in the international market.”
Reporters found at the Canton Fair that many textile and garment companies are vigorously developing independent brand strategies, exploring design innovation, process innovation, marketing innovation and service innovation, and their transformation and upgrading paths are gradually getting on the right track.
On the booth of Hangzhou Light Industrial Craft Textiles Import and Export Co., Ltd., the brand logo is very conspicuous. The person in charge said that the company registered the “Andstar” brand as early as 1996 and has sold it in Europe, the United States, and Japan.Trademarks are registered in major international markets such as this.
Wang Changzhao of Lutai Textile said that the company is focusing on creating innovative design concepts, establishing design centers in the United States and Europe, inviting European designers to join the team, and holding design conferences in New York, Milan, and Shanghai in spring, summer, autumn and winter. Wang Changzhao also said that what customers now choose is our design, not the price.
“We will bring products with innovative technology and style to every Canton Fair. This year’s autumn and winter woolen garments mainly promote the two new technologies of “fried color” and “tie-dye”.” Guangzhou Textile Import and Export Group Co., Ltd. Rongtai Mao Li Xuehong, deputy manager of the Weaving Branch, said.
The “Hengli Cloud Service Platform” currently independently developed by Jiangsu Hengli Group has enabled querying product quotations, placing purchase orders, paying for goods, and tracking orders, and has been used by more than 10,000 customers. It is understood that in 2013, Hengli Group saved 300 million yuan in marketing expenses year-on-year, and the work efficiency of marketing personnel increased by more than 200%.
According to the reporter’s understanding, many companies, such as Shanghai Xieda International Trade Co., Ltd. and Lutai Textile, are actively breaking the original service model, strengthening supply chain integration, and working closely with upstream and downstream enterprises in the industrial chain to provide customers with targeted services. , a complete solution with value-added services.