Textile export companies have the right way to “resist the fall”
From January to February this year, my country’s textile and apparel exports totaled US$21.903 billion, a year-on-year decrease of 14.54%. At a time when textile foreign trade companies are generally suffering heavy losses, a group of companies in Zhejiang, a major textile export province, that took the lead in embarking on the road of transformation and upgrading have shown good “resilience.”
Innovative products open up new markets
Zhejiang’s textile industry, with developed countries as its main export market, 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 in Datang Socks Industry in Zhuji City has researched a product that “cannot be thrown away” “Socks have found new markets from shrinking consumer demand.
Shengfeng Knitting Co., Ltd. has recently developed a sock with buttons. Two socks can be buttoned up and will not be lost after washing. You will no longer have to throw away because you can’t find one of the socks. Drop the other sock. 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.
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 be there, it just 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.
Breaking through to the high end of the “smile curve”
Design and R&D, processing and manufacturing, and brand marketing form the famous “smile curve”. The vast majority of my country’s textile export enterprises are in the “lower jaw” of processing and manufacturing, 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. The average price for processing and exporting is 2.5 US dollars per piece, and the profit is slim.
“We are still primary school students in brand creation, product design and marketing.” Chen Sheng, chairman of Xiangshan Yisheng Textile Co., Ltd., said, “This is why all 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. Through the development of marketing channels and the improvement of design capabilities, corporate 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 scheduled.
The importance of overseas marketing outlets is increasingly valued by foreign trade companies. After Zhuji Meibang Textile Co., Ltd., which produces seamless underwear, acquired two similar companies in the United States at the end of last year, it became the largest multinational group in the seamless underwear industry. It suddenly opened up sales channels in the United States. Export orders for this year are already fully booked. , from January to February, it has exported more than 30 large cabinets of underwear and socks to the European and American markets, a year-on-year increase of 50%. During the Spring Festival, employees had to be mobilized to take turns to take holidays to ensure production.
The west is not bright and the east is bright
It is difficult to start the traditional overseas textile consumption market. At the same time, trade barriers are rising, the appreciation of the RMB has compressed profit margins, and land and labor costs have increased in China’s coastal areas. Textile companies are in a situation that can be described as “embarrassed on all sides.” However, 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 set up a tape processing enterprise to produce and process clothing and home textile fabrics. With Botswana as its base, it has expanded its business in South Africa, Namibia, Mozambique, Nigeria, Ghana and other countries. market, 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. Dashiang 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 6 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 the greatest extent. Various trade risks. By taking advantage of the terms signed between European and American countries and African and other countries, products entering European and American countries are not subject to quotas and other trade barriers. In terms of exchange rates, they are not affected by the appreciation of the RMB., and you can also use international financial instruments such as forward exchange settlement to earn interest differentials.
It is understood that Zhuji City alone has more than 100 overseas trade institutions and more than 10 overseas production enterprises, which directly drive 700 million yuan in exports every year.
Zhou Rusheng, director of the China Textile City Management Committee, said that industrial gradient transfer is the development law of the manufacturing industry. my country’s export-oriented enterprises have been OEMs for overseas markets for many years, and can only be regarded as half of “going out”. We must go out thoroughly. It is necessary to allocate resources across the board, avoid risks, and win greater living space for the enterprise.
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