Pearl River Delta: Small And Medium Enterprises, Clearing Inventory And Increasing Cash Flow

The Pearl River Delta is the "weathervane" of China's garment manufacturing industry.

Recently, some major clothing distribution and sales in Guangzhou.

1 yuan a piece of cotton shorts, suspenders vest, 3 yuan a short sleeved T-shirt, 5 yuan a set of loose "breast sweater", long and short style is optional.

In Liwan District, Guangzhou, up and down the nine pedestrian street, the promotion of super low clothing sale can be seen everywhere.

"We are not selling clothes, but selling cloth."

Zhang Fuping, a famous clothing store owner, said.

Ms. Wu, a Guangzhou resident, told reporters that the old Guangzhou people like to wash clothes in small shops with 91 belts in Liwan District, because they often sell some hoarding goods in the clothing factories, and goods that are slightly defective in exports to the domestic market. The quality is good and the prices are very cheap.

In this regard, Qin Yingfu, Deputy Secretary General of Humen clothing association of Guangdong, thinks that the cost of raw materials and labor has risen sharply this year. Some smaller clothing enterprises have to take back the funds and take a big sale strategy as soon as possible in order to relieve the pressure.

"Only when money flows, can profits be generated, and at the time of season changing, the style of summer wear changes very fast. If the old clothes are not sold, they will backlog, and they can only sell at a loss."

Qin Yingfu said.

This view has been approved by some small and medium-sized enterprises.

Guangzhou Haizhuqu District Kang Le Village area is surrounded by many family workshop style clothing enterprises, the products produced here are exported to Southeast Asia, Africa and other areas, and some products flow into the local market.

Chen Bo, owner of Tengfei garment factory, told reporters that his factory was facing "dilemma" situation.

On the one hand, affected by the fluctuation of the RMB exchange rate, the factories did not dare to receive the larger amount of orders. In the first half of the year, only 5000 orders of clothing were processed, and at least 20 thousand more in the past. On the other hand, the price of raw materials increased by 20%, and labor costs, water and electricity prices were also rising, which constantly squeezed profit margins.

"Making clothes pays attention to small profits but quick turnover, but now they dare not pick up large bills. They will wait for a period of time and clean up their stock and increase some cash flow."

Chen Bo said.

Liu Hui, the head of Jiamei clothing factory, told reporters that because of the cruelty of the competition, the small clothing factories in the disadvantaged position generally lack the bargaining power and can only digest the pressure of rising costs themselves.

"Although the price of raw materials such as cloth and dyestuff is up to 20%, I only dare to raise 10% to customers. Even so, customers still complain and intend to pfer their orders to Vietnam in the second half of the year."

Chen Bo, the owner of Tengfei garment factory, told reporters that he was planning to pfer the factory production workshop from Guangzhou to Hunan. It is estimated that the factory rent can be saved by 30%, and the labor cost will also drop. After that, Guangzhou will only design and sell.

Wang Zhuo, Secretary General of China Garment Association, said that the future Chinese garment industry will present a new pattern, namely, the developed areas of the coastal areas concentrate their headquarters, design, development, brand and logistics departments, while the mainland will concentrate on the processing sector.

"This is the result of a regional optimization. It may take three to five years."

Wang Zhuo said.