Once a textile company is in trouble, sales decline, and development is limited, the most common rescue method that comes to mind is transformation and upgrading, and the most mentioned method of transformation and upgrading is the development of new products. Therefore, innovative new varieties are often given the image of high sales, high profits, and high returns. This is indeed the case. A new product can easily become a “hit” product in the market, and the profit can basically be guaranteed to be more than 30%. It seems that only continuous innovation can keep the company in an invincible position forever, but this year’s textile market environment is obviously not friendly to innovation.
R&D costs 10 million, profit per meter is only 10%
Innovation in fabrics is no longer as easy as simply changing weave specifications. Raw materials, machinery and equipment, etc. have higher requirements. Because of this, R&D and innovation have never been something that small and medium-sized enterprises can play at any time. Those who can really afford the initial investment and obtain high profits from R&D finished products are often powerful manufacturers. Therefore, in the market for many years, large companies have been doing research and development at the front and reaping high profits, while small companies have imitated behind to make a little money.
However, this year’s situation is that high investment has not changed, but high returns have disappeared. According to an autumn and winter fabric manufacturer, their sales of autumn and winter fabrics have been good for many years, but this year there has been a serious decline in orders due to the epidemic. Some customers who could achieve sales of hundreds of millions of yuan in previous years have only achieved sales of several million yuan so far this year.
The decline in sales has also severely affected their confidence in R&D and innovation. They have a new type of autumn and winter jacket fabric. They invested more than 10 million in early research and development. After the launch, customer feedback was relatively good. They thought sales would surge and profits would skyrocket, but in fact the order volume was mediocre. Fabrics that could originally be sold for more than 50 yuan/meter can now only be reduced to more than 30 yuan/meter to ensure some sales, and the profit at this price is only about 10% similar to other conventional fabrics.
The research and development cost of 10 million yuan has blocked the majority of textile companies, but a profit of 10% per meter can be achieved with any fabric on the market. Input and output have become completely unbalanced under the condition of plummeting sales. This imbalance not only causes companies that are already in the process of R&D and innovation to lose their money, but also affects the enthusiasm of subsequent companies.
The inventory of gray fabrics has doubled, but they are unwilling to change production varieties
It is impossible for most textile companies in the market to spend millions or thousands Millions of dollars are spent on research and development, but when the market is poor, it is still very feasible to change the thinking and expand the product categories appropriately to obtain a broader sales space. But in fact, not only the research and development of high-end products has stagnated in the market, but some low-end product manufacturers also lack the courage to adjust their direction and expand their products.
According to a manufacturer of polyester taffeta, pongee and satin fabrics, their inventory of gray fabrics at the beginning of the year was about 2 million meters, but now it has exceeded 4 million meters. As for whether it can be produced this year I no longer have any idea of profit, I just want to reduce losses. In fact, their factory just replaced a batch of looms two years ago, which can weave some high-end fabrics, including popular stretch fabrics and so on. But even though the inventory of conventional low-end fabrics is growing day by day, they just stop at the idea of changing products and do not put it into practice.
If you have the conditions and technology, you can transform but not. On the one hand, it is because of the new fabric varieties It is necessary to re-develop new customers, which is difficult to achieve when customers and orders are in short supply in the market this year; on the other hand, new products often require new raw materials, production processes, and even technical talents, which cannot be achieved in the short term. It can be realized, but once the time is delayed and the air outlet is missed, it may cause new fabric inventory.
In comparison, it seems that only by following the steps and following the rules can we get through the off-season smoothly. The vast majority of small and medium-sized enterprises in the market do have the same idea, so a rather special phenomenon has emerged, that is, these enterprises generally have no shortage of funds and are quite sufficient.
Some powerful manufacturers are seeing high After a large amount of investment but unable to obtain high returns, and even the cost is difficult to recover, the pace of research and development will inevitably slow down, which will also hinder the development of textile fabrics to a certain extent. At the same time, some small and medium-sized enterprises are more “fearful” of transformation and upgrading due to various reasons, and it will be inevitable to accumulate inventory in their areas of expertise. The lack of high-end products and the proliferation of low-end products may be problems that the textile market will inevitably face in the short term. </p
