On August 22,The latest internal speech of Huawei founder and CEO Ren Zhengfei was exposed.
Ren Zhengfei said that the next ten years should be a very painful historical period, and the global economy will continue to decline. Huawei must make survival the most important plan, and change from panic self-rescue in the past to quality self-rescue, and from the pursuit of scale. Turning to the pursuit of profits and cash flow, shrinking and closing marginal businesses across the board, passing the chill to everyone.
Huawei is one of the most successful companies in China, and Ren Zhengfei is also an idol worshiped by many entrepreneurs. This judgment he made, combined with the current reality, shows that the situation is indeed not very good, and textile companies should also feel the same way.
The giant who “spares on food and clothing”
Not only Huawei, many businesses selling textiles are now beginning to cut back on food and clothing.
Large supermarkets such as Wal-Mart and Costa are synonymous with high quality and low price, and have always been the main customers of Chinese textile foreign trade companies. Unlike some clothing brands, large supermarkets respond to the regular needs of ordinary consumers and follow the path of small profits but quick turnover. Therefore, most of the fabrics required are regular products, but the volume is large and sales have always been good.
However,during a conference call with investors announcing second-quarter results, Walmart Chief Financial Officer John Rainey said the company had“cancelled It has placed billions of orders” to cope with the inventory buildup that has accumulated over the past few quarters.
American retail giant Target (Target) has also made similar moves. They recently stated that by canceling the super It reduced its inventory of discretionary goods throughout the second quarter by placing $1.5 billion in orders and lowering merchandise prices.
Although China’s direct exports of textiles to the United States have shrunk after the Sino-US trade friction, exports to Vietnam and other places have increased. Exported fabrics and accessories will still be exported to the United States after being processed in Vietnam. Nowadays, large retail giants are feeling the pressure of inventory and are beginning to reduce orders.
When it comes to weaving and fabrics, the feeling of enterprises will become more and more obvious, and what textile enterprises have to do is to survive in this difficult environment.
It will be difficult to get better in the next 3to5 years
Everyone knows it needs to be done, but they don’t know how long it will take. Ren Zhengfei judged in his speech that the global economy will not improve in the next 3 to5 years, and consumption power will continue to decline. , coupled with the epidemic, it is difficult for there to be bright spots in the world.
The editor doesn’t know whether this statement is correct, but judging from the recent international situation, Japan has been in deficit for 12 consecutive months, and because of the new crown medical system has almost collapsed, South Korea’s won has Collapse, GermanyPPI (Industrial Producer Price Index) and CPI(Consumer Price Index) is upside down by nearly 30% (approximately equivalent to the increase in raw materials exceeding sales prices by 30% span>), Citibank expects UK inflation to reach 18%……
This is still a developed country with a strong foundation, not to mention many developing countries whose governments are on the verge of collapse.
Therefore, the global economic recession expectations from 3 to 5 are not very exaggerated. Textile bosses can use this as a reference. Make a mental construct that may be helpful in making future decisions.
Be prepared for a protracted war
When chatting with cloth bosses in the past, the editor had a deep feeling. There are really not many cloth bosses who have long-term plans. Many times they make a decision not based on what they think.��To do this is because the general environment forces us to do this, and the majority of people follow the trend.
When the market environment is good, you may get a good profit by following the trend, but when the market conditions continue to be poor, the results of taking one step and looking at it may not be so friendly.
Therefore, in the expected future situation, textile companies should make a long-term plan based on their own situation. Past experience may not be so applicable. In particular, they need to pay attention to the health of profits and cash flow. Some of the tasteless orders that were originally thought to be tasteless and a pity to throw away may have to be taken frequently in the future in order to survive.
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