How can textile export companies survive the financial crisis?
From January to February this year, my country’s textile and clothing exports totaled US$21.903 billion, a year-on-year drop of 14.54%. Textile and clothing exports in February fell by 56.2% compared with January.
While textile foreign trade companies generally suffered heavy losses, in Zhejiang, a major textile export province, a group of companies that took the lead in finding opportunities from the crisis have shown good resilience. After a little analysis of them, it is not difficult to find that the answer to the survival of these enterprises is: even if there is no financial crisis, the foreign trade textile industry is bound to embark on a road of transformation and upgrading.
The back of the “can’t throw away” socks
Zhejiang’s textile industry, which has developed countries as its main export markets, has been hit hard due to the shrinking external demand. Orders for a considerable number of companies have fallen by more than 30%. However, a company from Datang Socks Industry in Zhuji City has developed a type of “indispensable” socks, but it has found a new market from shrinking consumer demand.
Zhou Rusheng, director of the China Textile City Management Committee, said that the per capita annual textile fiber consumption in developed countries in Europe and the United States is 32 kilograms, which is more than double the per capita consumption in our country. Shirts and socks are bought by the dozen and thrown away when finished. After the financial crisis, international demand shrank, and many Europeans and Americans changed their previous “spending” consumption habits.
Shengfeng Knitting Co., Ltd. recently developed a sock with buttons. Two socks can be buttoned up and will not be lost after washing. You no longer have to worry about having to throw away the other sock because you can’t find it. The sock thing happened. Chairman Xuan Hanguang said that this achievement has been applied for a national patent. A German businessman was optimistic about the market prospects of this kind of socks and placed an order of US$5 million in one go.
Xuan Hanguang said that the conventional socks market has long been saturated, but it does not mean that there are no market gaps in the field of socks consumption. Xuan Hanguang’s Shengfeng Socks Industry has more than 160 national patents, and each patent has opened up a new market. Last year, Shengfeng Socks Industry’s sales reached 300 million yuan, and this year’s goal is 500 million yuan.
Zhejiang businessmen with innate market sense are good at this kind of “market discovery”. Furun Import and Export Co., Ltd. is now working with American merchants to develop a new type of fabric that can replace pure silk and reduce the cost of high-end garments by adding cotton or linen. General manager He Haiqing said that consumer demand will always exist and needs to be captured and guided.
Lou Chuang, director of Zhuji Foreign Trade and Economic Cooperation, said that there are no sunset industries, only sunset products. Structural adjustment and industrial upgrading do not necessarily mean spending money on equipment. Developing market-specific and marketable products is also a way of structural adjustment.
Changing the “small profit” status
The vast majority of China’s textile export companies are in the processing and manufacturing sector, so their profits are meager and their ability to resist risks is weak. If Chinese enterprises want to “reborn” in the industrial chain, they must strive to achieve breakthroughs in the two commanding heights of profit in design, R&D and brand marketing.
Jin Yao, chairman of Babei Tie Company, a large tie manufacturer, said that Shengzhou City is a large tie production base. 80% of ties in the United States are produced in Shengzhou, but most of the ties exported are OEM processing. , the average price of one piece for export is US$2.5, and the profit is slim. Why? There are no internationally renowned brands, and there is no strengthening of R&D and design.
Zhou Rusheng, director of the China Textile City Management Committee, said that the textile industry is actually a high value-added industry with unlimited prospects. One meter of Italian women’s clothing fabric sells for 15 euros and costs 5 euros. The key is that the research and development design incorporates high technology and is supported by international brands.
Chen Sheng, chairman of Xiangshan Yisheng Textile Co., Ltd., said: “We are still primary school students in brand creation, product design and marketing, which is why the money has been made by foreigners.”
Not willing to make wedding dresses for others, Yisheng Textile has established its own team of designers to directly provide Japanese merchants with self-designed and own-branded garments, instead of engaging in simple OEM processing. Japan’s largest clothing manufacturer Itochu Corporation has also become Yisheng’s partner from its previous purchaser. General Manager Chen Sheng said that the ex-factory price of the garments we design is definitely higher than that of pure processing. When sold in Japan, we and Itochu will still have to share a share. Through the development of marketing channels and the improvement of design capabilities, the company’s profits have increased from 5% of OEM processing to 25%. This year’s financial crisis has had a huge impact on consumption in the Japanese market, but Yisheng has not been affected, and the full-year production plan has been fully booked .
Jin Yao said that although the popularity of Chinese original brands abroad is still very limited, and the marketing network established by Chinese companies is also very immature, as long as they do not occupy the commanding heights of these two textile industries, it is impossible for Chinese manufacturing to get rid of being a human being. Wedding dress situation. As countries and regions with more cost advantages enter the horizons of international buyers, without “Made in China”, the status of Made in China will fade sooner or later.
”The West is not bright and the East is bright”
The traditional overseas textile consumption market is difficult to start. At the same time, trade barriers are rising, the appreciation of the RMB has compressed profit margins, and China’s…Land and labor costs in the Hainan region have soared, and textile companies are in a situation that can be described as “embattled on all sides.” However, “if the West does not shine, the East shines.” When the European and American markets suffered setbacks, companies that turned to the Middle East and Africa have left behind classic cases of successful breakthroughs.
Zhejiang Daxiang Holding Group Co., Ltd. invested US$2.6 million in Botswana, Africa, to establish a tape processing enterprise to produce and process clothing and home textile fabrics. With Botswana as its base, it has expanded to South Africa, Namibia, Mozambique, Nigeria, Ghana and other countries. , and then use Africa as a re-export trade base to enter the market. From the establishment of a trade window in Botswana in 1998, the sales of Daxiang Group reached 1.2 billion yuan last year. Textile companies are generally facing difficulties this year. Daxiang Group is actively preparing to build a textile industrial park in Botswana with a total investment of US$50 million and covering an area of six square kilometers, driving domestic textile companies to go global as a group and establish an overseas textile industry chain.
Establishing factories overseas not only means that the factors of land and labor can be solved, but also opens up new markets with huge potential, changes the situation of low profit margins in the textile industry, and more importantly, resolves international trade frictions and conflicts to a large extent. Various trade risks. They take advantage of the terms signed between European and American countries and African and other countries. Their products can enter European and American countries without being restricted by quotas and other trade barriers. In terms of exchange rates, they are not only not affected by the appreciation of the RMB, but they can also use international financial instruments such as forward exchange settlement to make profits. Profit spread.
It is understood that Zhuji City alone has more than 100 overseas trade institutions and more than 10 overseas production enterprises, which directly drive exports of 700 million every year.
Zhou Rusheng said that for many years, my country’s export-oriented enterprises have been OEMs for overseas markets, and can only be regarded as half of the “going out”. To completely go out, it is necessary to allocate resources within the full range, avoid risks, and win more for the enterprise. living space.
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