About 10 years ago, the home textile industry did have a glorious period of relatively high profits. , but since 2017, the home textile industry has shown a dilemma of high gross profit and low net profit rate, and the industry is facing severe tests.
In the home textile market, “price war” is a common method used by enterprises. But a long-term price war is not conducive to the development of enterprises. Since the beginning of this year, the market has plummeted, with few orders and thin profits. Many home textile fabric manufacturers have even thought of “changing careers”!
We started making autumn and winter fabrics in September. We had been doing home textiles before, mainly down quilts, four-piece sets and other bedding products. However, the profit was too thin, so we thought about starting to make clothing fabrics. .
However, the profit of clothing fabrics is not very high…
In the home textile sector, there are actually only a few domestic brands. We have been cooperating for many years. Prices and profit margins are already very transparent. The profit of the home textile fabrics we make now, such as wide-width pongee, peach skin, etc., is only 0.3 yuan/meter, which is a 50% decrease compared with previous years. As for clothing fabrics, the profit margin should be more than that, and we are still developing customers.
So, what is the reason that makes a cloth boss who has been involved in the home textile industry for many years explore new fields?
Domestic trade demand has weakened, and orders have dropped by 20%-30% year-on-year
From relevant data, the home textile industry achieved revenue of 57.2 in the first half of 2019 billion, a year-on-year increase of 3.8%, and a net profit of 480 million yuan, a year-on-year decrease of 12.6%.
From the above data, we can see that the overall performance of the home textile market is “unsatisfactory.” The profits of the entire home textile industry have declined, which has also had a great impact on the downstream gray fabric trade.
A company that makes bedding said: “In the first half of this year, the order volume of home textile gray fabric factories fell by 20%-30% compared with the same period last year. Nowadays, wide-width fabrics are more popular and are generally used as bed sheets and curtains. Cloths, etc. are mainly sold to Shaoxing, Keqiao and other places. This year we started to make Tencel velvet, which can be used for window screens, pajamas, etc. It is light and thin and feels very smooth and comfortable. This fabric sells well in the market. Other performance They are all average.” Coincidentally, a domestic trader also revealed: “We mainly make slub fabrics, and the varieties we produce are relatively niche and special. Although the profit per meter of fabric is not much different from last year, this year’s The total order volume has dropped by 20%, which means that the total profit will also drop by 20%.”
The reason why the profits of home textiles are not high is that home textiles are consumer goods and have a long service life. Generally, families can continue to use them for several years after buying them back. Furthermore, the continuous increase in logistics costs and labor costs of enterprises has also increased the burden on home textile merchants. .
Sino-US relations affect the export of home textile fabrics
The domestic market is sluggish, what about the foreign trade market? my country has always been a major textile exporter, and its key export markets mainly rely on the United States, the European Union and Japan. More importantly, these three countries and regions account for almost 52% of my country’s total exports of home textile fabrics.
This year’s Sino-US relations are complex and changeable, which has also affected the export of home textile fabrics. The person in charge of a company that exports home textiles in the Wujiang area said: “The decrease in orders this year is more affected by Sino-US trade. In the past, American customers would steadily repeat orders every month. Now, although they are also repeating orders, the order volume has shrunk. In the past, An order was 10,000 meters, and now an order is 5,000 meters.” The complex and ever-changing Sino-US relations have also made it more difficult for companies to receive orders and quote prices. A person in charge of a domestic trade company said: “This year’s order volume is about 1/3 less than in previous years. Another reason is that foreign trade is difficult to do this year, and many foreign traders have switched to domestic trade!” This also reflects from the side that the order volume of foreign trade this year has decreased, resulting in foreign trade Businessmen came to grab the business of domestic traders.
In general, since this year, home textile fabric companies have experienced a decline in order volume and shrinking profits. Upstream demand is shrinking, but downstream home textile companies are increasing exponentially!
Overcapacity makes it difficult for the profits of home textile fabrics to improve
In recent years, affected by factors such as environmental protection policies and increased labor costs, textile companies have “moved north” has become a trend, and traditional textile towns such as Suzhou, Shaoxing, and Haining are also in the process of transformation and upgrading, which has also led to the relocation of a large number of textile companies. The central and western regions are the main locations for the relocation of domestic textile companies.
Take Shuyang as an example. The county has more than 130 textile enterprises, among which the home textile industry is its characteristic industry. At the beginning of this year, Jiangsu Zhengneng Home Textiles, which invested 1 billion, officially settled in Shuyang.
In addition to Shuyang, in the Siyang Economic Development Zone in Suqian, a generalHengtian Chemical Fiber Home Textiles, a “textile giant” with an investment of 5 billion, also started here. After the project is fully completed, it will become a modern textile enterprise with a vertically integrated workshop of 180,000 square meters of “polyester-spinning-texturing-weaving-printing and dyeing” chemical fiber industry, and can achieve annual sales of 45 billion yuan. The home textile market is in a “blowout” state.
From this point of view, the home textile market has become saturated, which will inevitably lead to the home textile gray fabrics remaining in the In a state of oversupply, textile bosses will inevitably be forced to join low-price competition. Profits are also unlikely to improve.
Editor’s Note
This year’s home textile industry is not satisfactory. The explosion of production capacity in the Midwest, the Sino-US trade environment, and the changes in the overall macro environment The weakening of the domestic textile industry has led to a decrease in orders and a decline in profits for the home textile industry. It is said that 2019 may be the most difficult year. How to survive next is a question that every cloth boss should ponder! The editor believes that as long as you persist, you may be able to see a rainbow! </p
