Recently, a chat record has gone viral on WeChat Moments. As the COVID-19 epidemic intensifies overseas, the economies of many countries are on the verge of collapse, and textile companies have also experienced the largest number of order withdrawals and abandonment of goods in history.
The cloth has been put on the machine, but it has been cancelled. It needs to be exported in the near future. cautious!
An integrated industry and trade company that makes extra-wide home textile fabrics said: “Recent orders have been canceled because of the large order volume. Our recent general orders are all from this customer, which has caused us to The financial pressure is very high.”
A designated supplier of a certain fast fashion brand also said helplessly: “Recently, many brand clothing stores have closed, and our orders have not been spared. We just received a new order some time ago, and the cloth The knitting is almost finished, but it has been canceled in the past few days.”
“Currently, domestic factories have basically resumed production. , after the order from two years ago was put on hold for more than two months, they were working overtime to produce and busy shipping. Suddenly receiving the news that the customer canceled the order, the loss was really not small, because the company generally only charges 30% of the customer’s deposit, and the cost It’s out of reach,” said a foreign trader.
“Demand in the global textile and apparel market is declining now, and it is not just a problem in the United States. The situation of overcapacity and reduced orders may be more serious than last year.” The trader looked sad.
Recently, there is news that Futian Industrial, one of the world’s largest manufacturers of circular knitted fabrics, canceled 4,500 tons of orders in one day!
In addition to canceling orders, many companies also revealed that as many corporate institutions in the United States and Europe began to enter remote working and semi-stop work status, which has a great impact on the operation of logistics. “Now we have to confirm with customers whether they can receive the goods, and say hello in advance to avoid the situation of losing money and goods. Previously, the goods were abandoned at the port when they arrived in Italy, and the goods were detained by the shipping company.” A foreign trade company express.
This series of order withdrawals and abandonment of goods has also worried the textile boss, and he asked his soul: “Will the textile business still end this year?”
Appropriately adjust the proportion of domestic and foreign trade
With the outbreak of foreign epidemics, the textile and garment industry European and American countries have basically come to a standstill, and textile foreign trade people have been severely affected. After interviews, many cloth bosses said that they will appropriately adjust the proportion of domestic and foreign trade to slow down the impact of the epidemic.
The person in charge of a company that mainly deals with orders from Italy and South Korea said: “Although we have not received a notice of order cancellation this year, the volume in the first quarter has shrunk a lot compared to last year. Next, we will develop domestic trade. Now that the domestic epidemic is basically under control, everything is waiting to be done, which may be a good opportunity.” Similarly, a boss who exports nylon fabrics also revealed: “The order volume has been reduced by 20% compared with last year, and the current order can be made By the end of April, we will consider a higher proportion of domestic trade. However, domestic trade also has disadvantages. It takes longer for customers to receive payment than foreign trade. Most of them take 3 months or more. Therefore, domestic trade is not easy to do. This year The situation is really difficult.”
It is true that when the foreign epidemic has not been effectively controlled, it is a good strategy to shift the focus of business to China, but Boss Bu also needs to understand that the domestic sales market is now overcrowded, and the industry The competition is very fierce. At times like this, Boss Bu must pay more attention to the quality of his products so that he can have enough strength to win in the competition.
Reduced production hours and changed from two shifts to three shifts to ensure sufficient cash flow
It is said that cash flow is the “life and death” of an enterprise. Line”, when new orders are unsustainable, many cloth bosses believe that for the company, no orders means no revenue, but the labor and rent costs are difficult to offload. If there is a loan, it will still have to be paid every month. Repay the loan and interest. Therefore, it is extremely necessary to reduce expenditures in the future.
“Next we may appropriately reduce production to ease the pressure on funds and inventory.” A factory director who makes imitation memories said helplessly. “Raw materials have fallen sharply now, and we have not received new orders. We can only produce some conventional varieties, but we use the raw materials we stocked up when prices were high, so we…We chose to stop half of the machines next month. If we produce too much inventory, we cannot sell it. Instead, it takes up our working capital (raw materials are all traded in cash). ”
The person in charge of another dyeing factory also revealed that the working hours of employees may be appropriately adjusted from two shifts to three shifts. Workers’ hours will be shortened and wages will be reduced, which can reduce labor costs.
Judging from the current market situation, the operating rates of various factories are slowly recovering, but destocking is slow and new orders are not being placed smoothly. Next, the market will be in a situation of excess production capacity, and low-price competition is about to break out. Therefore, , when the market is uncertain, it is wise to choose strategies such as appropriately reducing production or adjusting workers’ working hours to reduce expenses.
Proactively share profits, retain customers, and withdraw funds
After visiting the market, many companies said that customers have frequently lowered prices recently, often arguing over 1 cent. But now that domestic and foreign trade demand is shrinking, they can give in to old customers on price, sometimes even at a loss. , but in order to keep customers and long-term cooperation in the future, we have no choice but to eat Huanglian.
“Recently, our gray cloth prices have dropped by 2 cents, and profits have dropped significantly. Because we have a lot of inventory, we can only The price reduction hopes to bring back some funds, but even so, the effect is not obvious, and few goods are received. “The factory director said helplessly.
“Since the opening of the business, I have sent a lot of samples, especially to foreign countries. In some countries, the express delivery fee is thousands, but no actual orders have been accepted. Yes, we can only bear the cost of sending samples by ourselves. “A foreign trader said helplessly.
At present, the cake in the market is getting smaller and smaller. When the quality is the same, customers will definitely give priority to those factories with cheaper prices. At this time, Boss Bu will eat a little bit. A small loss. When the epidemic passes and the market picks up, we will not only gain the trust of customers but also lay the foundation for future cooperation.
Editor’s Note
In 2020, both foreign trade exports and domestic sales will face many difficulties. Among them, the new crown epidemic has a global impact. Contagion is considered the biggest “black swan”. “In 2020, we don’t seek profits, we just seek to survive. Sometimes there is an opportunity in a crisis, and it depends on whether the company can seize this opportunity.” “A cloth boss who has been involved in textiles for more than ten years said. Next, textile people must always pay attention to the epidemic situation, especially exports, confirm in advance whether customers can receive goods in time, and make in-depth preparations for the off-season.</p
