Why Are Small Businesses Idle And Big Businesses Busy?

Cotton prices rose sharply, triggering market polarization

"We have only been in the class for a week since May, and we still have to work early in the next few days until two or three p.m.

Xiao Hong, a worker at a small knitting mill in Zhangcha, Foshan, said that since April, the work has been inadequate, which is quite different from the days of overtime in the past years.

It is reported that in previous years, 2~5 month is the busiest season for Foshan's textile industry, but this year, many Zhangcha knitting city enterprises have started less than half of them. The rising cotton prices since the second half of last year began to fall after the Spring Festival this year. As of now, they have fallen by more than 30% in 3 months, which has caused many small and medium-sized textile enterprises in Foshan to get into a predicament of "insufficient work".

1 status quo

Small and medium-sized enterprises:

Looking at the ups and downs of cotton prices, Yao Ying, chairman of Sanshui Jia Li Da Textile Co., Ltd., Foshan, sighed a long sigh. "At the meeting, several senior elders mentioned that this summer really encountered the" cold winter "of the textile industry in a hundred years.

From October to May of last year, May is the peak season for export. It is also from March to August every year.

Large enterprises:

Orders increased by 20% in the next quarter.

Reporters learned that, as a leading enterprise in Foshan's knitting clothing industry, Foshan Everbright Clothing Co., Ltd.'s orders for the third quarter of this year increased by 20% over the same period last year.

"This year's orders increased by 20% compared with the same period last year."

Tan Mingkuang, chairman of the board, said the factory is functioning normally and there are still gaps in employment.

Tan Mingkuang said that cotton prices were soaring last year, and some small businesses were afraid of receiving them.

In the first quarter of the year, the orders of the large textile enterprises increased steadily.

Anthony, executive vice president of Foshan knitwear Co., Ltd., said that recently, their enterprises' stocks of cotton (25215, -305.00, -1.20%) and other raw materials were adequate and production was normal, compared with last year, orders for the next quarter increased by 20%.

2 exploration

Customers have a wait-and-see attitude.

"The cold winter of this year's textile industry has come to light in September, when cotton prices continued to rise." scared "many American importers, they were getting goods from Vietnam and India with tax preferences.

When the cotton prices are high, some customers have been expelled. Now it is not easy to get back at a low price. Foshan textile enterprises have been attacked by other countries in the export market.

At the same time, there is a lag reaction in the domestic market.

"The price of clothing seen on the market is still high, which is actually the result of the rising cost of cotton last year.

The public is too expensive to reduce the desire to buy, the consumers do not sell, and the clothing business also reduces the goods.

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Cotton prices will be low and production costs of raw materials will be reduced, but Yao Ying should be happy. But many analysts have a wait-and-see attitude. "They feel that prices will continue to decline in the future. They are not low enough now. They want to sell again when they are low," he said.

Small businesses encounter high costs and low profits

Yao Ying attributed the damage of spinning enterprises to the ups and downs of prices, and the real reason was that speculators pushed the cotton prices up and then sold heavily.

Jiang Lin, a professor at the south of the Five Ridges College of Zhongshan University, said that the price volatility did cause uncertainty to the market. "When prices were high, enterprises started to have a certain amount of cotton stocks, but now cotton prices are going to sell at a high price at that time, which is obviously impossible.

In addition, because of the fall in cotton prices at present, the importers or importers will reduce the price space, which will greatly reduce the profits of enterprises. If manufacturers do not agree to sign the contract at this price, they would rather not make the order, so manufacturers will suffer double injuries of high cost and low profit.

3 Influence

The price of summer wear remains unchanged.

As the temperature continues to rise, this year's new summer wear mainly based on pastoral style and national style has been listed in Foshan.

Although the price of domestic and international cotton has dropped by more than 30% since March of this year, the reporter has learned that the sales price of summer clothing has changed little this year, basically unchanged from last year.

In the face of the rapid cooling of cotton prices, the retail market price has not changed noticeable after the large number of summer clothes.

Several shopkeepers at the popular front in Foshan told reporters that the price of new summer clothing has not declined significantly this year, the price is almost the same as that of last year.

Cotton prices have dropped, but clothing prices have not changed.

How can the insiders explain this situation?

Jiang Lin, a professor at the south of the Five Ridges College of Zhongshan University, said: "in fact, clothing has many links between production and retail. In fact, changes in the prices of raw materials are only a small part of the final market price. The increasing level is the middle circulation, and the retail price is hard to come down if the flow links are not cleaned up.

Now the cotton price fluctuation has given the middleman an excuse to raise the retail price, so what the people saw in the store is still expensive clothes.

In the game of cotton price diving, Jiang Lin thought that the middle and low income people were among the most "injured", the price was too high, and the high income people could go shopping in Hongkong and other places. But the middle and low income people might have to face expensive clothes in the local market. "Brand goods are expensive, they can not afford them. They can only go to second place, buy some non brand clothes, instead of brand goods, in order to reduce the cost as much as possible, or cut corners, reduce the quality and dye, or reduce investment in research and development.

4 forecast

Small and medium-sized textile enterprises

Bankruptcy or bankruptcy

"The recent decline in cotton prices is due to the lack of orders for small businesses and the increase in orders for large enterprises, which is due to differences in the stock and market affordability of enterprises."

Zhao Qichao, deputy director of the Foshan municipal Party school and director of Foshan Institute of social and economic development, analyzed that large enterprises had sufficient funds and large quantity of cotton yarn. Whether cotton prices or prices were reduced, they could ensure that enterprises could make profits.

Small businesses have less capital and less inventory, and are at a disadvantage in competition. In the case of cotton price reduction, large textile and garment enterprises can lower the price of products and attract orders, while small businesses can not easily reduce the price of products to ensure profits, which inevitably leads to the reduction of orders.

According to Zhao Qichao analysis, under the situation of large enterprise orders and small enterprise orders, large enterprises appeared overloaded operation, and even labor gap appeared. On the contrary, small businesses were overemployed, and production equipment and workers were in idle state.

"Continue to continue, SMEs will take the initiative to cooperate with large enterprises in production, form a joint fleet, and then tide over the difficulties, otherwise they will go bankrupt and bankrupt."

On the other hand, large enterprises are also faced with the opportunity to expand production and asset restructuring. "Through the increase of orders, they can cooperate with small businesses and maintain and even expand production and operation."