“I just finished an order two days ago. It’s not a lot of tens of thousands of meters of Shumei silk, but now the fabrics are all rolled up and ready to be shipped. The customer said to take it slow and not rush to ship, so the fabrics are piled up. It’s in the warehouse.” This is a real thing that happened to a friend of the editor recently. Cloth cannot be sent out after it is finished, and payment has become a big problem. The biggest pressure on textile companies this year comes from funds. Failure to pay for orders is a blow to the chest for textile workers.
But there is an inherent logic behind this seemingly unreasonable thing – the terminal market is insufficiently motivated! Several issues that textile companies have to face at the moment:
The epidemic not only affects demand but also affects customer sentiment
First of all, under the influence of the epidemic, the terminal clothing industry has always been in a state of exhaustion. The epidemic in the first half of this year caused the clothing industry to miss a wave of spring clothing market. Therefore, many clothing companies themselves have a lot of inventory. Since the fabrics used for clothes in spring and autumn are not much different, many clothing companies directly use spring fabrics to make autumn clothes and maintain a wait-and-see mentality when placing autumn orders.
The coldness of the terminal market has directly affected the mood of the upstream. Now that the first half of August is about to pass, the weaving start-up rate in the industry has been unable to increase. Currently, according to the data monitoring of Silk City.com, the weaving start-up rate in Jiangsu and Zhejiang is at 61 About %, which is the same as last week. According to the rules of previous years, although August is still in the off-season, but unlike July, August will usher in the Golden Nine peak season. Therefore, textile companies generally take precautions and start up the machines in advance at this time. Far below previous years’ levels.
Secondly, the impact of the epidemic is not only on the market. Due to the epidemic, the contact between textile companies and customers can only be converted to online communication. However, online communication will be somewhat troublesome. Many things involving product details are definitely not available. Offline meetings provide a direct and real experience, and some customers have lost their affection for the company due to the isolation problem, and the customer affection that has been cultivated for a long time has been worn away.
The textile market falls into a vicious cycle
Due to weak terminal demand in Jiangsu and Zhejiang, the inventory of gray fabrics in many weaving companies is getting higher and higher. Currently, according to data monitoring from Silkdu.com, the inventory of gray fabrics in Jiangsu and Zhejiang is 37 days old. For the market, all pricing is inseparable from the relationship between supply and demand. Therefore, the biggest obstacle for the textile industry to break the status quo is actually high inventory.
The more cloth in stock on the market, the lower the price of gray cloth. If the weaving manufacturer wants to sell goods, it will have to use a lower price, and the greater the loss will be. The greater the losses, the tighter the cash flow of the weaving company. When the cash flow is close to drying up, it is impossible not to shut down the factory. According to the above profits, the company will fall into greater losses by then, even if the market improves. , it became difficult to turn over again. Now that the peak season is about to come, high inventory will bring about a big problem – the delay in market recovery.
Now the textile industry seems to have entered an endless cycle. Insufficient terminal demand – lack of corporate orders – high inventory of gray fabrics – delayed market recovery – insufficient terminal demand. The phenomenon of “the more you sell, the more you lose, the more you lose, the more you sell”. In this situation What is constantly being tested in the current environment is the ability of textile people to withstand financial pressure. Therefore, taking advantage of the hot weather, many textile people simply take a vacation. They cannot just watch the inventory pile up higher and higher and do nothing.
Generally speaking, the current breakthrough point is how to make your products stand out from the crowd of fabrics and add added value to your products.
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