Grey Cloth Inventory Growth Is Too Fast, Clothing Brands Are Still Cutting Orders In Autumn And Winter, Then Enterprises Can Only Win With Low Prices?

In recent years, the textile industry "bankruptcy", "shutdown", "bankruptcy", "arrears of wages", "performance decline", "loss" and other news are common. At present, many enterprises either have no business or rely on low profit volume to survive.

There is a serious imbalance between supply and demand. No matter how low the price is, some people will do it

According to the current situation, the main reason for the low profits of enterprises in China and the United States lies in the following 10% of the internal profits of enterprises engaged in grey cloth trade. In order to maintain customers and ensure that there is business to do, some enterprises do not hesitate to sell goods at a loss, which also increases the risk of more small and medium-sized manufacturers closing down.

"We can see how many fabric mills are full of grey cloth." A cloth boss had no choice but to say that now the supply and demand have been seriously unbalanced. The weaving speed is very fast, but the terminal digestion is very slow. Let's look at a set of data:

In June, the sales of clothing, footwear, knitwear and textile enterprises were 105.9 billion yuan, a year-on-year decline of 0.1%. In the first half of the year, the overall sales fell by 19.6% to 512 billion yuan, which was one of the worst performing categories, including the online channel, which also showed a decline of 2.9% from January to June.

This year, both clothing factories and brand companies are reducing the unit volume. It's not easy to come to the list. The manufacturers hope to eat it. "We really can't do it at your price!" In the face of the hard to come customers, the boss of the weaving factory, Mr. Shen, was helpless. "Recently, the market price was too chaotic. The customer asked us to reduce another 20 cents. We really couldn't do it, but we didn't do what other manufacturers could do. Finally, we bit our teeth and took it down."

Why did the boss still bite his teeth when he knew it was a loss? He revealed: "it's really because the stock of grey cloth is too high. Many of the customers we cooperated with before were foreign trade merchants. When the foreign trade list was gone, they would not place an order. But our machines are constantly weaving, and the warehouse is almost unable to put in cloth. Anyway, let's cash some of them first."

This situation is very common in the current textile market, "what we do is the order quality, the price has no advantage, and we don't want to sell it at a low price. We can see that the prices of other peers are falling, so we are forced to reduce a bit. During this period, the raw materials have dropped a little, and the market price has dropped again. However, we have calculated the prices of raw materials and grey cloth, and if it goes down like this, we will certainly lose money, so there is no such thing The price was reduced, but the old customers came to talk about the list, but they quoted the low price in the market. We wanted to stop doing it, but the boss said that the old customers could not be lost, so they had to bite their teeth and go on. " A factory manager revealed.

The seemingly forced choice is actually disrupting market prices

Many manufacturers sell goods and reduce prices in order to recover funds. However, in the long run, it will only disturb the market price, and the enterprises with insufficient strength may be out of the competition ahead of time. Cloth boss also knows, rely on low prices to win such a business model will not last long.

In the middle of June, the market once spread the behavior of weaving manufacturers to limit production and protect prices, but the effect seems not very obvious. Now the stock of grey fabric in Jiangsu and Zhejiang is still maintained at a high level of about 45 days, and many manufacturers are still making full efforts to produce inventory. "Wait a minute. We want to see if there are 70 looms out of production." Said a cloth owner. From this point of view, if there is no large-scale production restriction in the market, then it is very difficult to protect the price.

On the other hand, the narrower the focus is on the development of customers. How to avoid enterprises falling into the low price competition, the first is to choose high-quality customers, good customers do not fight price war, for example, many textile enterprises can still guarantee about 30% profit, the second is to do their own products well, and constantly develop new products, take the road of differentiation, only your products are sufficiently novel and unique, can be recognized by customers It will not be eliminated by the market.

afterword

At present, the textile off-season has really come, and orders on the market have entered a "semi stagnant" state again. Some clothing brands, such as Nike and Ralph Lauren, are reducing their orders this autumn and winter. Whether the orders can recover in the second half of the year is still in doubt. With fewer orders, customers' requirements for enterprises and products will be higher and higher. At this time, enterprises must constantly develop and meet the market demand Only in the fierce market competition can we win.