In the past two years, what we have talked about most about the textile market is the problem of overcapacity. In particular, the environmental protection rectification started in 2017 eliminated 100,000 water-jet looms in Jiangsu and Zhejiang regions, but peripheral production capacity exploded by 200,000 units. All of a sudden, the textile industry, which was already oversupplied, was further pushed into severe overcapacity.
However, production capacity does not represent output. In recent years, the output of textile fabrics has been worse than the previous year. It is not clear at all how much the newly added 200,000 looms have in terms of output. Performance. Especially under this year’s epidemic, the textile market has fallen back to more than ten years ago. From February to June this year, the monthly production of cloth products was only a little over 3 billion meters, a year-on-year decline of more than 25%. And the current output is only equivalent to 1/2 of 2017 when looms were significantly reduced.
Of course, changes in output are an intuitive manifestation of the poor textile market. At the same time, it is also a kind of self-protection for enterprises to reduce production capacity and inventory. But can we avoid inventory and survive the off-season by simply conceding production? Obviously impossible!
The monthly production is 4,000 rolls, and the daily sales are only 100 rolls
This year, almost every weaving company has Everyone has experienced production suspensions and holidays, and many companies even take the initiative to take holidays for more than a week during non-holidays. The purpose of doing this is simply to reduce inventory, but is the inventory low? In fact, there is no shortage. As soon as the machine is used, the inventory increases rapidly.
“Our factory recently had a week’s holiday. Although it has started work recently, it is only open for half a day. All employees work at night. However, because the market still has not improved, Only old customers occasionally come to pick up some fabrics, and the maximum order quantity is only 20,000 to 30,000 meters. Our inventory is still very large, exceeding 2.5 million meters, which is equivalent to our production of more than two months.” said a person in charge of a weaving company.
Increased inventory troubles textile people all the time, as shown in the picture above Although the textile company seems to have only 4,000 rolls of cloth in stock, it ships 100 rolls every day and can consume them all in more than a month. But in fact, the inventory is increasing every day, and within a month there will be another 4,000 rolls of cloth waiting to be sold. This time and again, 1,000 rolls of cloth are added to the inventory every month. As long as the textile market does not improve, this process will not end.
The increase in inventory does not seem to have much to do with production capacity, unless production is completely suspended and the inventory is cleared, but no textile company dares to try this. After all, the losses caused by a complete suspension of production may be greater. It seems that in order to solve the inventory problem, it is no longer meaningful to adjust production capacity alone.
Expand sales channels and change sales methods
grey fabric inventory has never played a decisive role The production capacity is high or low, but the sales situation. When things are going well, one day’s sales can exceed a month’s production. Of course, when times are bad, one month’s sales may not be as good as one day’s production at full capacity. From this point of view, it is far better to work on the sales of gray cloth than on the production capacity.
“The market is not good this year, and the competition in gray fabric sales is very fierce. It is basically difficult to maintain daily operations just relying on local and surrounding customers. We have begun to expand to Zhejiang, Guangdong and other regions Customers, strive to sell gray fabrics to other places to reduce competitive pressure. And the results are not bad. Today, 220 rolls of 240T pongee have been sent to Binhai, Shaoxing.” A textile boss said.
Of course there are many textile people with ideas to expand customers and seek orders, but not everyone can really go out and get some orders from all over the country. The vast majority are still Mainly local sales. They are also thinking of ways to stand out in the local market.
The simplest and most common way is to increase publicity, lower the selling price, extend the account period, and give profits to customers in a limited market in order to obtain as many orders as possible. There are also some weaving companies that are paying close attention to the market. Once they discover hot-selling products, they will immediately adjust their production aspects, or change their production products according to seasonal changes.
There are even some textile people who specialize in selling finished products from gray fabric sales. Taking advantage of the historical lows in gray fabric and printing and dyeing fees, they reserve a large amount of finished fabric inventory, lock in price advantages, and expand sales scope. After all, finished fabrics can be sold all over the world, but only a few textile clusters are interested in gray fabrics.
This year’s textile market is destined to struggle with inventory, but more than half a year has made many textile people understand that high production capacity only treats the symptoms of inventory, not the root cause. Without rich and broad downstream channels, inventory will always increase. Expanding new sales channels is the fundamental way to solve the problem. </p
