Foreign trade demand decreases, textile companies remain the king
When economic parks seek transformation, they can introduce “increments” through investment promotion to adjust the structure. However, for companies that have invested almost all their wealth in traditional industries, they can only make a fuss about the “stock”.
“After this round of crisis, the survivors will be king.” Fang Long, vice president of Huading Group, a large clothing company in Yuhang Development Zone, did not mince words.
In his view, just as prices always fluctuate, investment also has troughs and highs. “Companies cannot be ostriches during low times. They must also invest prudently, strive to get out of the crisis, and at the same time prepare for the next cycle.”
Upgraded version of foreign trade
Huading Group, which integrates textile, printing and dyeing, home textiles, etc., invested US$50 million in Hangzhou Linping Industrial Zone in 2002 to build the Huading Industrial Park covering an area of 530 acres. In the park, only the annual sales of clothing About 1.9 billion yuan.
“In the five years before 2019, we have maintained a growth rate of 30%, but the growth rate in 2019 is almost zero, the same as the previous year.” Dry Cleaning Franchise Network pointed out that the important reason for the zero growth is precisely Foreign trade orders have decreased, and 80% of Huading Group’s sales come from overseas markets.
He lamented that due to changes in consumption expectations, consumer confidence is obviously insufficient. Not only has the volume of customer orders decreased, but the cycle has also become shorter. This vicious cycle also exists at home and abroad, “reflecting the severity of the entire economy. “.
Under the crisis, Huading is also looking for a way to break out: on the one hand, it takes innovative research and development as the leading role, increases the design of fabrics and clothing, and increases added value, so as to stabilize exports.
“Orders for bulk goods are no longer competitive, but fabrics and fashions with design content are more value-added and competitive.” The dry cleaning shop franchise network pointed out that some traditional fabrics, because everyone has the ability to make them, Customers often keep prices very low, “it’s difficult to negotiate even 1 cent”
When expanding overseas markets, we should pay more attention to the layout of emerging overseas markets such as the Middle East and South America, “which are less pressured by the economic crisis.” Information provided by Yuhang District shows that exports from the original Hangzhou area are concentrated in Europe and the United States (accounting for about 2/3 of the total). Europe and the United States were hit hard by the financial crisis.
The temptation of domestic demand
As foreign trade demand continues to shrink, expanding domestic demand seems to be a natural choice. However, Ge Haihua bluntly said, “domestic demand is not that easy to do” and “if it were easy to do it, it would have been done long ago.”
He told reporters that foreign trade orders are large, stable and paid on time, because there are specialized international fabric importers and wholesalers who integrate upstream and downstream resources and are responsible for storing inventory, which is a “simple large-scale production.” However, in the domestic market, orders are small, scattered and unstable. Moreover, the production of small batches and multiple varieties for the domestic market requires frequent adjustments to process parameters and raw materials, which is unbearable for enterprises.
“This is a contradiction between personalized demand and large-scale production.” Ge Haihua said that it can only be solved by increasing the added value of products and selective inventory.
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