Zhongda Textile Business District: The bustle and quiet of the “Fashion Source” resumption
There is a saying in Cantonese called “Snake Cake”, which means that rows of fences are set up to limit the flow of people, allowing pedestrians to queue up and walk around in a very narrow area.
On March 9, more than a month after announcing an indefinite postponement of the opening of the market, Guangzhou Zhongda Textile Business District finally regained some excitement. In some waiting areas where people are queuing up to enter, this kind of snake-shaped device makes the already small flow of people appear even more deserted. However, this is one of the most important procurement and supply places for noodles and accessories for Chinese garment manufacturers. It has 59 professional markets and nearly 23,000 merchants. Under normal circumstances in previous years, there were about 150,000 people coming to Guangzhou, including about 150,000 people from Hubei. There are 52,000 people.
In previous years, March was the peak purchasing season, and merchants gathered in the Zhongda Textile Business District. This year, the closure time here has been extended by a full month. These more than 30 days have broken the production rhythm of raw material manufacturers and buyers in the national clothing industry, and also shaken the transformation path of the “fashion capital” that has just entered the state.
Merchants: Return to normal or wait until June or July
Guangzhou Liansheng Textile Co., Ltd. is one of the first batch of merchants to open in Zhongda Textile Business District. Chen Botao is the person in charge of this company and has been engaged in the textile industry for more than 20 years.
In 2003, when the SARS epidemic broke out in Guangzhou, he served Russian customers. According to Chen Botao’s recollection, the epidemic also severely affected foreign trade business that year, and he resolutely decided to shift his business domestically. In 2004 and 2005, many of his peers also began to enter the domestic market, and the textile and apparel industry also grew rapidly in those two years.
This time, Chen Botao thought that he might have been a little idealistic at first. On March 9, Chen Botao and the first batch of merchants who resumed work opened the market in anticipation, but soon they realized that the market had not fully recovered. The main products of Guangzhou Liansheng Textile Co., Ltd. are raw materials for clothing production, and most of its customers are domestic fast fashion brands. After the outbreak, strict travel controls have greatly affected the downstream retail end. “People can’t go out, shops are closed, and some customers have canceled their orders directly. There are also some orders that should have been paid by the end of February, and we can’t rush them.”
Chen Botao knows very well that this is not his business alone and can only be understood by each other. “The inventory that has been pressed down now is more than one million.” He told reporters that orders for spring and summer are usually completed before the year, and there are some finishing touches after the year. However, the epidemic has extended the resumption of work by a month, which completely disrupted the process. The pace has changed, and the clothing industry updates at an extremely fast pace. Buying goods out of season often means losses.
Chen Botao told reporters that they are currently making some attempts, mainly to reduce some inventory pressure. “For example, it turns out to be white cloth. We use some blending techniques or add some patterns. We hope it can be extended to next year.”
In addition, there is an invisible problem that has not yet been solved when the Zhongda Textile Business District is opened – the warehouses of merchants in the village. Chen Botao said that currently, merchants can enter and exit the market to view goods and discuss business, but it is still difficult for logistics vehicles to enter and exit the village. Judging from the current situation, everything may need to wait until the production of autumn orders in June and July before returning to normality, and the current feedback from the retail market has made them more cautious about the next quarter.
Park: annual loss is between 20% and 30%
Chen Botao’s company is of a certain scale, and it is located in the Guangzhou Textile Trading Park in the Zhongda Textile Business District, which was among the first batch of companies that met the acceptance standards and was allowed to resume trading. This means that he can enjoy the park’s two-month rent reduction policy for settled companies. There are still a large number of individual merchants in the Zhongda Textile Business District who have not entered the park, and many of these merchants are just stall tenants. They need to face the pressure of inventory and rent at the same time.
On March 11, Yang Zhixiong, executive general manager of Guangzhou Textile Trading Park, said in an interview with reporters that as of that day, the resumption rate of merchants in the park had increased from 40% to 80% within two days. As Guangzhou’s No. 13 Bank and Baima Wholesale Market gradually reopened and resumed business, customer purchases are also slowly recovering. But this is just for business. In the past two days, many merchants in the park have opened their warehouses in the village to allow logistics vehicles to enter and exit. The recovery of the entire industrial chain will take longer. It is estimated that the things from the previous year will not be digested until the end of March. Then, after the summer clothes are launched, the entire impact will slowly dissipate.
“The biggest impact is that the loss of spring stockings, whether it is fabrics or clothing stockings, will be huge.” Yang Zhixiong said that because this year is April, generally the stockings for spring and summer will be larger than in previous years. If there are more, the pressure on this turnover will be greater. Judging from the current preliminary forecast, about 20% of the leading merchants have relatively large losses, which may be around 10 million yuan. The annual sales of such merchants are generally between 100 million yuan and 500 million yuan, and about 50% Customer losses are in the millions, and annual sales are about 20 million yuan. But overall, more than 60% of merchants’ losses should be less than one million, and the annual loss is about 20%-30%.
Yang Zhixiong said that many merchants are currently using the e-commerce channel processing libraryAt the same time, re-arranging some arrangements with the original wholesale channel merchants will have more advantages in terms of cost performance, but for merchants, it will restore some costs so that the development of the next season can continue normally. “We will definitely lose money this year, but a loss of 50% or a loss of 40% or 30% depends on the speed of processing and the recovery speed of the entire economy.”
At the source of the market, the power of the Internet and offline entities are still running into each other. Yang Zhixiong said that from the sales side, the Internet has gradually recovered, but this part only accounts for about 30% of all sales. 70% of physical store sales are still greatly affected, and peripheral buyers have to enter China. , it is still difficult to enter Guangzhou and the park. “Because the entity has been operating for decades, which customers need what and how to buy and sell are already very mature, but there are still things that cannot be covered at the e-commerce level.”
Market: A transformation cycle that may be interrupted
The Zhongda Textile Business District is well-known throughout the country. It is also the focus of Guangzhou’s old renovation. The upgrade keywords of customization, high-end, and intelligent need to match Guangzhou’s ” “Fashion Capital” positioning.
It is no accident that Guangzhou Textile Trading Park was on the first list of openings. It is a key demonstration project of Guangzhou’s “three old” transformation and the result of more than four years of exploration by Guangzhou United Trading Park Management and Investment Co., Ltd. The park has introduced the Guangzhou Exchange Group, the largest equity exchange in South China, and built a bulk commodity spot electronic trading platform. This trading platform uses an online trading system, adopts electronic trading methods, and combines multiple trading modes such as spot, medium and long-term spot, bidding and selling, to create a new third-party trading platform for domestic and foreign companies. At the same time, the culture of the park is to encourage design and innovation, and two-thirds of it is the design headquarters of designer studios and clothing brands.
“The original clothing production capacity and design capacity are both surplus, and they have been adjusted in the past two years.” Yang Zhixiong said that since last year, everyone has slowly been finding new directions for transformation, such as different sales models and sales channels. Slowly started to figure it out. Generally speaking, we used to go to the traditional wholesale market, large wholesalers in Guangzhou, and regional buyers. Since the beginning of last year, many customers have been processing and cooperating with large wholesalers online. “If there are no changes, the proportion of online and physical customers among top customers this year should be able to complete the transformation of 50-50.”
On the other hand, Chen Botao, the person in charge of the above-mentioned textile company, also believes that the environmental protection policies in the past two years have forced companies and industries to quickly make standardized adjustments, but in fact last year It just started to slow down a bit, and now I feel like I have to go through a new adjustment.
“Things that took two or three years to explore may need to be adapted again.” Yang Zhixiong believes that the epidemic has changed the rhythm of the entire chain. Online channels may be promoted faster, and now we have to compete for these resources. The cost becomes higher, and it is not easy to find the right balance again. For everyone, the inventory should be reduced now, directional design and services should be strengthened, and rent and tax costs should be further controlled, but it will still be affected. Overall, everyone is not very optimistic about this year’s sales situation.
According to the survey data of 101 key textile and apparel professional markets across the country by the Circulation Branch of China Textile Federation on March 10, the opening rate of the single market is about 86.1%; the number of shops that have been opened is 72,000, accounting for 10% of the total number of stores under normal circumstances. The proportion of the total number of shops in the market is 50.8%. Weekly report data from March 4 to March 11 showed that 30.3% of corporate orders reached more than 80% of normal levels, 40.3% of corporate orders reached 50% to 80% of normal levels, and 29.4% of corporate orders were still less than normal. 50% of the situation is basically the same as last week’s survey results, indicating that the improvement of corporate orders is not obvious.
The report recommends that under the current situation, terminal product manufacturers should fully tap the online sales market space, and various companies can also widely use professional market online service platforms to effectively integrate upstream and downstream resources in the industry chain. Although the COVID-19 epidemic is currently spreading globally, due to the long duration of the epidemic in my country, there are still some supply gaps in the international textile supply chain. Export companies should fully tap demand opportunities .
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