In recent years, the textile industry has experienced “collapse”, “shutdown”, “bankruptcy”, “wage arrears”, “performance decline”, “loss”, etc. News is commonplace. Nowadays, many companies either have no business or rely on low profits and volume to survive.
There is a serious imbalance between supply and demand, and prices No matter how low the price is, there are still people who do it
It is understood that most of them do it now The profit of conventional gray fabric manufacturers is less than 10%. In addition to external factors such as the epidemic and Sino-US trade friction, internal vicious competition is the main reason for low profits of enterprises. 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.
“There is a serious surplus of conventional gray fabrics. Just go to the weaving factory and you will know. “How many manufacturers’ warehouses are full.” A cloth boss said helplessly. Now the supply and demand have been seriously imbalanced. The weaving speed is very fast, but the digestion of the terminal is very slow. Let’s take a look at a set of data:
In June, clothing, shoes, hats, and knitted textiles are limited to Sales of Shanghai enterprises were 105.9 billion yuan, down 0.1% year-on-year. Overall sales in the first half of the year fell 19.6% to 512 billion yuan, one of the worst-performing categories. Online channels also performed sluggishly, recording 2.9 from January to June. % decline.
Both clothing factories and brands are reducing order quantities this year . It took a lot of effort to get the order, and the manufacturers all hope to have it. “We really can’t make it at your price!” Faced with the customers who had finally waited for it, Mr. Shen, the owner of the weaving factory, was also helpless. “The market prices have been too chaotic recently. The customer asked us to reduce it by another 2 cents. We We really couldn’t do it, but we didn’t want to do what other manufacturers could do, so we finally gritted our teeth and took it.”
Why did the boss still bite the bullet and accept it even though he knew it would be a loss? He revealed: “It’s really because the inventory of gray fabrics is too high. Many of the customers we cooperated with before were foreign trade merchants. When the foreign trade orders were gone, they stopped placing orders. However, our machines kept weaving and the warehouse was full.” I can’t put down any more fabric, so let’s cash in some of it first.”
This situation is very common in the current textile market. “We are doing order quality, and we have no advantage in price. We don’t want to sell it at a low price, but we can look at other The prices of our peers are all falling, and we were forced to drop a bit. During this period, the raw materials dropped a bit, and the market prices dropped again. However, we calculated the prices of raw materials and gray fabrics. We will definitely lose money if we continue to drop like this, so we did not lower the price. , but when an old customer came to discuss the order, he quoted the lowest price on the market. We originally wanted to stop doing it, but the boss said we couldn’t lose the old customer, so we had to grit our teeth and continue.” A manufacturer manager revealed.
What seems to be a last resort choice is actually disrupting market prices
Many manufacturers sell goods and reduce prices in order to withdraw funds, but in the long run it will only disrupt market prices and strength. Companies that are insufficient may be eliminated early. Boss Bu also knows that the business model of winning by low prices will not last long.
In mid-June, there were reports on the market that weaving manufacturers were limiting production to protect prices, but the effect did not seem to be very obvious. The inventory of gray fabrics in Jiangsu and Zhejiang is still at a high level of about 45 days, and many manufacturers are still making every effort. Production inventory. “We have 70 looms, which are now fully operational. The main reason is that the surrounding manufacturers have not stopped production on a large scale. We want to wait and see.” A cloth boss said. From this point of view, if there is no large-scale production stoppage in the market, it will be very difficult to protect prices.
From another aspect, if you only rely on low Attracting customers with low prices and focusing on price wars, its development path can only become narrower and narrower. How to prevent enterprises from falling into low-price competition, the first thing is to choose high-quality customers. Good customers do not engage in price wars. For example, many textile companies now can still guarantee a profit of about 30%. The second thing is to make their own products well. And continue to develop new products and take the path of differentiation. Only if your products are novel and unique enough can you be recognized by customers and not be eliminated by the market.
Postscript
At present, the textile off-season has truly arrived, and orders in the market have once again entered a “semi-stagnant” state. Some clothing brands like Nike, Ralph Lauren, etc. are all reducing orders for this autumn and winter. It is still doubtful whether orders can pick up in the second half of the year.�With fewer orders, customers will have higher and higher requirements for enterprises and products. At this time, enterprises must continue to develop products that meet market demand and continue to innovate in order to hope to win in the fierce market competition.
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