Last week, when the editor was walking around the market to understand the market, I discovered a very magical phenomenon. When I asked about the market, I couldn’t tell, but when I asked about the machine’s operating rate, the machine was fully turned on.
Some textile companies even said that their order-taking situation was not good, their inventory was high and they were trying to reduce it, and their machines were fully operational. How did such a seemingly contradictory situation arise?
Who is placing the order? Warms the loneliness
The machines are all running, but the inventory is decreasing, which means that people are buying the fabric produced. But with this market situation, who is placing the order? According to a person in charge of a weaving company, after June, there have been very few orders for conventional products on the market. Although their machines are now fully operational, the orders are mostly from traders, and the goods are shipped to them at a loss. There are also some fabrics in stock from the supermarket. The list of this part has never been interrupted.
People’s fabric spot supermarkets also have something to say. There are so many people doing spot quick reaction. How can we not seize such a huge business opportunity? But it’s not easy to be a ready-made supermarket. People come to buy a lot of goods and don’t care about the quality. As long as the variety is right, it depends on whether the color is available here. If not, go to another store to get it. In order to receive more orders, we need to prepare more colors of goods to enrich our inventory, and we need to keep placing orders.
This kind of order has several characteristics. First, the profit is low, and in many cases the principal can only be barely maintained; second, the payment cycle is long. The original payment period of one or two months can now be extended to three or four months, or even longer. .
If this kind of list were placed in the past, weaving companies would not even look at it, they would not make any money, and the billing period would be so long, it would be like working in vain.
But this year’s situation is that regular orders simply cannot fill production capacity. Some factories with a small number of machines are okay, but some factories with a large number of machines simply cannot find that much demand in the market. It’s tasteless and it’s a pity to throw away the “tasteless” order, so I can only accept it.
Volume, you can roll it
In the past, when the weaving center was in the Yangtze River Delta, textile companies only needed to pay attention to the situation of companies in the surrounding areas to understand the entire market. The tacit understanding between companies was relatively strong, and production capacity was not as excessive as it is now.
But now the production capacity has been transferred to the central and western regions. In order to stimulate employment and stimulate industry, the policies in those places are better than the last. Various subsidies have kept costs extremely low. The only requirement is that the start of work cannot be stopped, and that cannot be allowed to happen. The folks nearby have no work to do.
Cloth produced locally is transported thousands of miles to markets along the southeast coast for sale at a cost that is even lower than that produced locally in the market. It is large and cheap, which increases the degree of market involution.
Made a “decision that went against our ancestors”
In fact, not only weaving companies are rolling, printing and dyeing companies, and even the rapidly developing fabric spot supermarkets, as long as they are working in the textile industry, there are not many that are not rolling.
The editor learned that printing and dyeing companies that had been waiting in line before have also begun to quietly reduce prices. Of course, this price reduction is not explicit, but needs to be negotiated slowly with the company. A certain cloth boss said , you can talk about 2-3% discount.
The same is true for the fabric spot supermarket industry, where competition is fierce. Many companies have entered this industry in the past two years, including traders and weaving companies. But no matter what, there is an unspoken rule in this industry, which is to buy goods in cash. You would rather have a cheaper price, but you just can’t have it. Arrears.
But now the competition is too fierce. The editor learned that a small number of fabric spot supermarkets have made a “decision that goes against their ancestors” and pay customers for goods they owe. It can be said that they destroyed the market, but who would be willing to do this unless they were forced to do so?
The current market situation is like this. Most textile companies are forced to do orders that they cannot make money but have to do. The global economy is in a slump and terminal consumption cannot rise. The situation will only continue like this. The next step is to compare who can endure it better.
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