The road to self-rescue for Jiangsu’s textile and garment industry under crisis
April is the season when spring flowers bloom, and it is also the traditional peak season for the textile and garment industry’s “gold, three, and silver” seasons. However, the butterfly effect caused by the epidemic is everywhere. Problems such as shortage of production resources, poor logistics and transportation, and stagnant market demand have plunged Jiangsu’s textile industry into an “unprecedented winter.”
Inventory increases and working capital tightens
The “Golden Month” was forced to press the pause button, and the Nanjing Tao Yumei Clothing Design Industrial Co., Ltd. was slightly deserted. Recalling the scenes of the spring clothing sales season in previous years, Yang Taoran, the deputy general manager of Tao Yumei Company, had a slightly bitter expression on his face. In the past half month, problems such as insufficient employee attendance, failure to restore production capacity and orders, sluggish sales of products already on the market, surge in inventory, and sharp decline in profits have emerged one after another. The original production and sales plan has been disrupted, and everything has been restored. Need to reconsider from scratch…
Anxious Yang Taoran opened the business development plan he had just formulated at the beginning of the year, and revised it while preparing for the next R&D, production and sales of the company. “The textile and apparel industry has strong seasonality. If you miss the peak season of spring clothing, it will affect the stocking of other seasons.” She explained that unlike other manufacturing industries, the research and development and production of textiles need to be marketed 3 to 6 months in advance. . Although it is spring, in order to stock up, textile and clothing companies have entered the peak period of summer clothing production and the research and development period of autumn clothing. However, due to the impact of the epidemic, everything from downstream retail terminals to upstream clothing processing came to a halt. Not only did the sales of spring clothing lag behind before, but the unsalable inventory will also affect the company’s later storage and transportation costs, and will also lead to a continuous tightening of working capital. , hindering the purchase of autumn fabrics, which can affect the whole body.
180 kilometers away from Tao Yumei Clothing Design Industrial Co., Ltd., Suzhou Yilai Clothing Co., Ltd. also suffered the same heavy blow. “From the Spring Festival to late March, offline stores were closed and online logistics were suspended. Both online and offline sales of our spring and summer clothing were affected. I calculate the losses of the day every day, and my heart bleeds. .” Wang Xin, general manager of Yilai Clothing, said frustratedly that after the experience of a large backlog of spring clothing inventory in the past two years, they have appropriately reduced the production of spring clothing this year, but they were still unexpected, and the inventory backlog was even greater. In the warehouse, The inventory of gray cloth has also increased.
In fact, these two textile and garment companies are not the only ones affected by the epidemic. According to Lu Mei, deputy secretary and secretary-general of the Party branch of the Provincial Federation of Industry and Commerce Garment Chamber of Commerce, in late March, the Provincial Federation of Industry and Commerce Garment Chamber of Commerce launched an epidemic prevention and control According to a survey on the industry situation, 80% of the companies in the interviewed list said that the completion rate of target performance this year is about 60% or less, and only 20% said that the completion rate of target performance this year is about 70%.
Logistics is not smooth and foreign trade orders drop sharply
Under the epidemic, domestic trade companies in textile and clothing are suffering, and foreign tradeexport companies are also in trouble. “The thing I was most worried about happened. I just answered the phone and another export order was cancelled. The loss is estimated to be 1 million yuan.” After saying this, tears appeared in the corners of Wang Ping, general manager of Wuxi Lvmeng Garment Co., Ltd. She introduced that Lvmeng Clothing is mainly engaged in the processing of knitted garments. Since March, due to epidemic prevention and control, logistics, transportation and supply chains, and the express delivery industry have been suspended or restricted, Lvmeng Clothing has had three orders canceled. For successfully signed orders, raw and auxiliary materials cannot come in, and finished garments cannot go out, which may even affect the supply chain and franchisee relationships, laying hidden dangers for subsequent operations.
Wang Ping said that in order to repair customer relationships in a timely manner and restore the credibility of Lumeng Clothing, they have changed some foreign trade orders from sea transportation to air transportation. Although transportation costs have increased significantly, severely squeezing profit margins, they can only cancel them. The front teeth go into the stomach. She did some calculations. Taking goods shipped to Vietnam as an example, the shipping cost for a 20-foot container loaded with 11 tons of goods was about 10,000 yuan, but the air freight price was about 165,000 yuan. The guaranteed freight cost alone increased by nearly 16 times.
Not only in Wuxi, Lianyungang Meishi Clothing Co., Ltd. is also complaining about poor logistics and reduced orders. Tao Shiping, general manager of Leilishi Clothing, which has been suspended for more than 20 days, said that due to the epidemic, foreign trade orders have decreased, the company’s employee attendance rate has been insufficient, and the company’s production rhythm has been disrupted. The loss in the first quarter was at least about 1 million yuan, compared with the first quarter of previous years. Profit of at least 1 million yuan.
When analyzing the reasons for the decrease in foreign trade orders, Tao Shiping, who has been engaged in foreign trade for many years, said: “Half of our products are exported overseas, and the fluctuations in the international market have a great impact on us.” In recent years, some mid-to-low-end orders have generally shown The trend of shifting from domestic to foreign countries. After the outbreak of the global epidemic, domestic factories were the first to resume work and production. While many countries were still in a relatively serious epidemic situation, textile and clothing export orders showed a return flow. However, this year, the production capacity of many Southeast Asian countries After recovery, many orders returned.
Responding to market changes with innovation
Despite facing heavy pressure and encountering an unprecedented crisis, many Jiangsu textile companies did not just lie down, but showed a strong “desire to survive.” �The textile and apparel market is huge, and it also provides countless possibilities for companies. Almost all companies are responding to the huge changes in the market through innovation. In Lu Mei’s view: “Opportunities and challenges coexist, and every crisis is an opportunity to change the market structure.”
Nanjing Tao Yumei Clothing Company is one of the representative companies. According to Yang Taoran, before the outbreak, 90% of its product sales originated from offline stores. At present, in order to change the status quo, companies have expanded online sales channels and opened micro-malls and live broadcast platforms. At the same time, Tao Yumei Clothing is also trying to change its business model and gradually transform into a light asset. It will cooperate with qualified processing companies that meet the company’s production needs and entrust them to process the production of non-core products. In response to market demand, the company will focus on developing new Chinese-style clothing and integrating traditional handicrafts that cannot be replaced by machinery.
In the past three years when the epidemic has recurred, Wuxi Lvmeng Garment Co., Ltd., which is engaged in foreign trade processing, increasingly believes that seeking benefits from independent brands is the best way to develop enterprises in the future. Only when enterprises develop their own brands can they no longer be restricted by the international market. Moreover, Jiangsu has a complete textile industry chain, as well as regionalindustrial clusters with obvious professional characteristics and significant aggregation effects. These All congenital conditions will promote the transformation and upgrading of enterprises.
Industry experts expressed support for the transformation actions of many enterprises, but also gave relevant suggestions. They believed that Jiangsu’s textile and garment industry needs to bid farewell to its current state and need to develop as a group to achieve industrial clusters and complete industry chain support, and in the industry While gathering, pay attention to intensification. They took the Shuyang Economic and Technological Development Zone as an example. There are not only smart textile equipment manufacturing companies but also textile manufacturing companies in the park. Currently, a green supply chain has been built, and corporate procurement does not need to go out of the park. At present, the local area is promoting the transformation of the regional textile industry into a high value-added home textile specialty industry through big data, the Internet of Things and intelligent management.
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