The Second Outbreak Of The Epidemic, India, Southeast Asia Orders Return, Textile People Are Alert: Do Not Blindly Optimistic

Recently, two news events have attracted the attention of textile workers

Event 1: since 2020, the global epidemic of new crown has brought great impact on the clothing industry. In recent months, news of shop closures, layoffs and bankruptcies of European and American clothing brands have been common. However, behind these well-known brands, there are more small enterprises and factories as OEM factories, especially in Cambodia, Bangladesh, India and other countries. Due to unilateral cancellation and postponement in Europe and the United States Orders, refused to pay to overseas suppliers, leading to the survival of these OEM factory crisis!

Event 2: compared with those countries in Southeast Asia, China's textile and garment industry has shown an obvious warming trend recently. In particular, Indian orders have begun to flow back to China. As the "factory of the world", China has great advantages in undertaking textile orders. In the past, with the continuous integrity of Southeast Asian countries' industries and products, as well as the repeated trade relations between China and the United States, China no longer has an absolute advantage in such relatively low-end textile orders. This has also led to the transfer of a large number of low-end textile orders to Southeast Asia and India in the past few years These countries. However, the epidemic situation in these countries has not been well controlled recently, so it is difficult to deliver such large quantities of orders. However, the epidemic situation in China has been basically controlled, so this part of orders has returned to China. From these two incidents, Xiaobian can not help feeling a little.

The profit of low-end textiles is not good, and the development to medium and high-end is the future trend

We know that the profit margin of textile orders in Southeast Asia is below 10%. In order to pursue greater profits, European and American countries transfer orders to Vietnam and Cambodia. However, since the outbreak of the epidemic, these most low-end textile OEM factories have been hit the most. As long as the upstream brand side cancels the order, it can return the whole body without paying the final payment. However, the downstream OEM factory has to bear a series of costs such as overstock of raw materials, overstock of finished products, and wages of employees. However, the economy of these countries is relatively backward, and the cancelled orders can not be consumed in China.

In recent years, China has also begun to realize that the low-end textiles are too saturated and have low discourse power, so they have begun to research and develop in the middle and high-end direction. Conventional imitation memory, Chunya textile and Nisi spinning are no longer "popular", while the new elastic fabrics such as T400 and T800 have been favored by designers. A manufacturer doing imitation memory said: "since the national day, our conventional imitation memory library has been preserved I didn't move it, but I remember that T800 has tens of thousands of meters of goods every day. Now we have 60 looms weaving this cloth, and the order can reach the end of this month. "

Coincidentally, a trader of functional fabrics also said: "we do functional fabrics, and only China can do this kind of fabrics, because China's industrial chain is complete, which ensures that this part of the order will not be" snatched away "by other countries, and the profit is considerable." It can be seen that fabric enterprises should still take the differentiation route and march into the high-end field.

Foreign trade recovered, but the epidemic situation has not been completely controlled, textile enterprises need to take precautions

The epidemic has exposed the so-called "spirit of contract" in European and American countries. During the epidemic period, China's textile and clothing industry, as the "factory of the world", was also deeply affected. However, with the passage of time, the textile and clothing industry began to develop better in June. According to relevant data, from January to September 2020, the cumulative export of textile and clothing was 215.78 billion US dollars, an increase of 9.3%, of which the textile export was 117.95 billion US dollars, an increase of 33.7%, and the clothing export was 97.83 billion US dollars, a decrease of 10.3%.  

Now it's mid to late October. Thanks to the influence of overseas Christmas preparation and the return of orders from India, foreign trade orders began to pick up. During the visit, some bosses said they had received orders from European and American countries. A cloth boss doing foreign trade said: "the order volume in October was a little better than that in the same period last year, and received 100000 meters of cotton cloth and 2 Million meters of regenerated chunyafang, peach skin cashmere orders

However, the more we need to ring the alarm at this time. As can be seen from the news events above, it is necessary to have a long mind to do business with European and American customers. Although the epidemic situation belongs to force majeure, cancellation and delay of orders are also helpless actions, the most important thing in doing business is mutual trust. Now a large number of orders have been transferred back to China. At this time, we must keep an eye on the situation and take precautions. We should add relevant clauses in the contract to prevent the cancellation of orders and non collection of payment due to the second epidemic!

Today's textile market can be said to be very crazy, not only raw materials, grey cloth, dyeing costs to rub up, even textile stocks have soared. In the face of such a situation, textile workers should keep a clear mind on how much the demand for terminal clothing has recovered. At this time, we should not blindly produce and stock up, especially the conventional products with the most serious overcapacity, which may enter an endless cycle in the end