The most obvious feeling in this year’s textile market is that there are fewer orders, the order volume is small, and end customers are reluctant to place orders. A textile boss said: “This year’s order volume is about 20% less than last year.” So why is this?
Let’s first look at a set of data released by the Bureau of Statistics. In the first half of the year, per capita consumption expenditure of national residents was 11,756 yuan, a nominal increase of 2.5% over the same period last year. After deducting the impact of price factors, the actual increase was 0.8%. Looking at urban and rural areas, the per capita consumption expenditure of urban residents was 14,677 yuan, an increase of 0.8%, and after deducting price factors, the actual decrease was 0.9%; the per capita consumption expenditure of rural residents was 7,881 yuan, an increase of 5.6%, and after deducting price factors, the actual increase was 4.0%. The per capita clothing consumption expenditure of national residents was 725 yuan, a decrease of 2.3%, accounting for 6.2% of the per capita consumption expenditure. The national per capita consumption expenditure on food, tobacco and alcohol was 3,685 yuan, an increase of 4.2%, accounting for 31.3% of the per capita consumption expenditure.
From this set of data, we can see that the fundamental reason for the lack of orders is that no one buys clothes. Expenditure on clothing dropped by 2.3% compared with last year. People put more financial resources into food and drink. The reduction in clothing consumption capacity directly led to the decline in orders from textile companies.
Supply and demand balance broken
In the entire textile industry chain, the weaving and trading ends are like the meat in the middle of a sandwich. One layer goes up and the other goes down. As the demand side, the upstream doesn’t care about you, just follow the cost. The ups and downs make everyone’s head big. On the supply side, downstream demand is insufficient, but weaving inventory is overwhelming. According to statistics from Silkdu.com, the inventory of gray fabrics in Jiangsu and Zhejiang currently stands at 37.2 days.
As can be seen from this picture, the current inventory in Jiangsu and Zhejiang is much higher than the same period last year. Under such circumstances, weaving companies and fabric merchants are all being squeezed no matter where they are. Therefore, there is an inherent vicious competition. , in addition to external factors such as the epidemic and Sino-US trade friction, this has led to low corporate profits. In order to maintain customers and ensure business, some companies are willing to sell goods at a loss, which also increases the risk of more small and medium-sized manufacturers going bankrupt.
Because of the serious involution of the market, many companies are looking for products that are different from the market. The development of new products has become the best way to add added value to products in the current textile market. How long will the development of new products bring dividends to the company?
New product bonus period is short
“Once a new product becomes popular in the current market, many companies will soon follow the trend and produce it,” said a textile developer. It is very difficult to create fabrics from scratch, but once they become finished products, After being circulated in the market, this piece of fabric has already been analyzed to a great extent in the hands of an old textile master. This results in a very short dividend period for the textile industry after developing new products.
And even if a company applies for a patent for a fabric, it may not be of great use. For example, the raw material used in a new product fabric is SORONA from DuPont. After applying for a patent, other companies cannot use the same raw material for product development, but There are too many options for raw materials of the same nature on the market. Take DuPont’s SORONA as an example. Teijin’s SOLOTEX is also available.
Therefore, it is difficult to guard against patents. But in any case, even if the price of a new product drops after being imitated, the profit is still much higher than that of conventional products. After all, everyone makes conventional products, but there are relatively few manufacturers of new products.
And from another perspective, the benefit of new product involution is that new product updates will become faster. Although higher requirements are put forward for textile companies, this is also a must-experience for industry reshuffle. This step will have a promoting effect on the entire industry, and good money will eventually drive out bad money.
In short, August is coming to an end, and the “Golden Nine and Silver Ten” are getting closer and closer. As the textile peak season, I believe many textile bosses are still looking forward to it. However, according to the current situation, August has not ushered in a turning point. In short, the demand The rebound also needs a buffer. I believe that even if a large number of orders cannot be placed like the peak seasons in previous years, there will still be a wave of market prices during the “Golden Nine and Silver Ten”.
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