Since March this year, the overseas epidemic has spread rapidly. All companies involved in foreign trade exports across the country have experienced order delays and cancellations to some extent, including our textile industry. There was even a wave of “rushing for export” orders during that period, which mainly meant sending orders away before customers canceled their orders. This also shows the severity of textile foreign trade. Even though it is already late May, there is still a shortage of foreign trade orders because there is no sign of the overseas epidemic being under control.
There are no foreign trade orders, but factories and workers cannot stop easily. In order to maintain normal production operations, many export companies have begun to turn their attention to the domestic trade market. According to statistics, in the past month, Alibaba’s domestic trade platform 1688 has added more than 20,000 foreign trade factories, with an average of nearly 700 foreign trade factories settling in every day. The transaction volume of foreign trade factories on the platform has exceeded 22 billion yuan in one month. In addition, since last year, at least 320,000 domestic export-oriented export companies are seeking to transform into domestic trade.
There are also many situations in our textile industry that shift from foreign trade to domestic trade. We must know that the attractiveness of domestic textile trade has been declining year by year in recent years. On the one hand, it is because of the large volume of foreign trade orders, with hundreds of thousands of meters of one variety or even one color, while domestic trade orders are often small in quantity, scattered, and with many styles. On the other hand, in terms of payment, foreign trade orders are often paid promptly, while domestic trade orders have a higher risk of defaulting on payment.
Although the advantages and disadvantages of domestic and foreign trade are very obvious, in the absence of foreign trade orders, many textile companies have only domestic trade. But it is obviously not a good thing for so many textile companies to rush into the domestic trade market.
Competitive pressure has intensified and profits have continued to shrink
Compared with the foreign trade market, domestic trade space is extremely limited, especially this year, which has become more crowded. Insufficient domestic trade orders are the norm in the textile market this year. Oversupply will inevitably lead to low-price competition. It is not uncommon to sell goods at low prices or even at a loss in the market.
According to the person in charge of a weaving factory, they make satin, polyester taffeta, pongee and other fabrics, and they mainly sell them for the domestic trade market. There are currently more than 2 million meters of inventory in the warehouse, and the pressure this year is very high. But the greater pressure comes from returning to the low-price sales of domestic trade counterparts, so they have to adopt the same approach. Now the profit of the gray fabrics they sell is basically only a few cents. This is still based on the low price of raw materials. Once the price of raw materials increases, they will basically have to make a small loss before shipping.
Not only will foreign trade companies return to domestic trade, which will seriously affect the profits of related companies, but it will also overdraw market orders, causing the domestic trade market, which is in an improving situation, to experience a rapid depletion of orders.
Orders poured in, and the popularity quickly declined
The domestic trade market has gradually recovered after the domestic epidemic was controlled. Especially in the recent stage, polyester taffeta, pongee, imitation silk, nylon, etc. have all had a brilliant period. Performance. However, the vitality of these orders is not as strong as in previous years, and most of them will no longer sell well within a week or two.
A market live dyeing factory was basically at full capacity a while ago. However, the order situation has plummeted in the past week. Only 2 of the 10 shaping machines are in operation. The workers From “two shifts” to “three shifts” again.
A trader explained the relevant situation. There was a lot of market activity in the dyeing factory two weeks ago, and most of them were shipped to Guangdong and other places. I thought that market activity could drive a wave of market activity, but now there are basically no orders for market activity, and the entire market has fallen silent again. The main reason is that there are too many people doing domestic trade now. Whenever there are one or two fabric hot spots, various companies rush in, orders are quickly divided up, and the popularity quickly drops.
Generally speaking, the market is still “too many monks and too few people” and there is an extremely lack of orders, especially when a large number of foreign trade companies are transferred direction, and began to enter domestic trade, which intensified the burden on the market. Any order that appears will be quickly digested by the market, and there is no time for fermentation and growth. Many companies are even overdrafting future autumn and winter fabric orders and advancing production to May.
The domestic trade market is not the “savior” and it is impossible for all textile companies to benefit equally. If the foreign trade market cannot recover in time, the domestic trade market may even be “spoiled”. </p
