Textile enterprises switch to domestic sales to guard against overcapacity
Textile companies, which are deeply affected by the European and American economies, have no choice but to turn their attention to the domestic market.
A large number of textile companies have transferred to the domestic market, which will cause at least 30% overcapacity in my country’s textile industry. This does not include those foreign counterparts that have poured into the Chinese market.
The Chinese market is not a safe haven. It is more difficult and risky to make a living here.
Foreign trade is bleak
“Orders this year have dropped by 20% to 30%. The overall market situation is quite severe.” Gao Yiyong, business manager of Dali Silk (Zhejiang) Co., Ltd., said frankly that the continued economic turmoil has a full impact on the company. In terms of direction, the direct manifestation is that orders have dropped significantly.
Ruan Ying, chairman of Lanzhou Sanmao Textile Group, who has just returned from participating in the European exhibition, said that in the U.S. market, which accounts for 40% of the group’s textile export share, only old customers with long-term cooperation are left.
Experts told reporters that in the first nine months, my country’s textile and clothing exports were US$132.6 billion. The year-on-year growth rate was 6.72%, and the growth rate in the same period last year was nearly 20%. The growth rate has dropped significantly. In fact, growth data has a great relationship with exchange rate changes. If the factor of US dollar depreciation is removed and priced in RMB, textile and clothing exports fell by 2.7% from January to September.
The country is acclimated
Mr. Li is a salesperson for a yarn company. In the past two days, he has been busy eating and drinking with the purchasing staff of the weaving factory, hoping that the other party can place an order for his company. Because its foreign trade volume has shrunk sharply, it is eager to find domestic customers to avoid the closure of its factories.
“The situation is forcing people to go crazy.” Zhu Xugang, the second import and export department of Shandong Daiyin Textile Group Co., Ltd., told reporters that due to the relatively large overall decline in exports, the company decided to transfer 30% of its export volume to domestic sales next year. But they are accustomed to dealing with foreigners and don’t know how to get through domestic downstream buyers.
Due to the uneven quality of domestic purchasing personnel, some people not only accept gifts, but also clearly mark the prices for rebates. “He will blackmail the factory with orders, desperately suppress the factory’s price, and then directly ask for rebates ranging from a few cents to a few yuan per meter.” Wang Zhijun, an import and export company of Huafang Co., Ltd., said.
It is understood that the price of textiles per meter varies from a few yuan to dozens of yuan depending on the quality. And sometimes a buyer can earn tens of thousands of yuan from a single order. This is undoubtedly difficult for small and medium-sized textile enterprises with high costs and meager profits to support.
Wang Zhijun told reporters that his company began to work hard to develop the domestic trade market two or three years ago. But the effect is not great. “Because the domestic trade market is really difficult to develop. In addition to the difficult checkpoints for purchasing personnel, the domestic trade varieties are small in batches, have fast delivery times, and are subject to seasonal restrictions. They are not as easy to operate as foreign trade. The settlement method is also a threshold.”
It is reported that currently, domestic trade The bulk of textile industry purchases are in the south. But buyers in the South are used to paying in arrears rather than settling in cash. Now that the economic situation is becoming more severe, it is very likely that a certain purchaser will suddenly declare bankruptcy, and its debts to upstream manufacturers will be unable to be paid off. “We would rather not do this kind of business than let the company risk the capital chain being broken.” Wang Zhijun said.
Wang Zhijun said that integrity issues make the textile industry suffer more as it moves upstream. Those who sell cotton are not as good as selling yarn, those who sell yarn are not as good as selling cloth, and those who sell cloth are not as good as making clothes. “The best thing to do is start from the upstream.”
The “Corporate Credit Supervision Report” released by Zhejiang Province a few days ago shows that there are only 912 textile companies with good credit, accounting for 1.87% of the total number of companies in the industry, which is significantly lower than the average level.
If you want to find business, you can’t look for unreasonable business. The plight of domestic textile companies can be imagined.
The cost from 700 billion to 1 trillion
Due to the poor foreign trade market, some foreign textile companies have also turned their attention to the Chinese market. The competition will be even more fierce.
Chen Rong’er, President of DuPont’s Asia-Pacific Region, revealed that with the momentum of the surging financial crisis, specific measures to expand the market will be launched next year, and a series of plans to enter China are currently being brewed.
There are many companies like DuPont. We hope to get back the orders lost in the European and American markets from markets such as China.
Ruan Ying said that this problem is very realistic. Although China has a huge consumer group of more than 1.3 billion, the influx of many companies will inevitably lead to fierce competition. In the next few years, China’s textile industry will be difficult to avoid price wars.
“The price war in the domestic market is now very obvious. With the rapid growth of costs in all aspects, clothing prices are falling, indicating that the market is already oversupplied.” Experts pointed out.
At present, the ratio of exports and imports of my country’s textile enterprises is 1:1. Preliminary estimates indicate that the current domestic clothing sales market can reach about 600 billion to 700 billion yuan, and exports are almost 700 to 800 billion yuan. With domestic companies selling domestically and some foreign manufacturers pouring into China, the domestic trade market’s production capacity will reach 1.05 trillion yuan. It is certain that the domestic market cannot absorb the surge in production capacity, and the contradiction between supply and demand will be extremely prominent.
“This means that 30% of the existing production capacity will be eliminated. Such an industrial integration will take three to five years or even longer. By then, my country’s textile industry will mainly rely on domestic demand, and foreign trade will no longer purely pursue quantity. Become the pursuit of quality.” Expert�� means. AAGFHTRYKUYIU7OUP
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