Facing The Export Competition Of Southeast Asian Countries, Chinese Enterprises Should Deal With Price War.

The three phase of the 111st Canton Fair will be opened in May 1st with textile and garment export enterprises as the main participants.

Reporters in the three session of the exhibition learned that Europe and the United States textile and garment market demand declined, the cost of domestic production factors increased, leading to the gradual loss of the price advantage of Chinese textile and apparel products, buyers in Europe and the United States are increasingly turning to Southeast Asia supply market.

The analysis shows that compared with other export industries, China's textile and garment enterprises are facing greater pressure on global industrial pfer.

It is rarely competitive. Therefore, we must focus on differential competition, stabilize the market share in Europe and the United States through the medium and high grade orders with fast response, small scale and high quality requirements; enhance the added value of products by strengthening the development of new fabrics and designing their own brands; and accelerate the implementation of the "go out" strategy of enterprises to develop new markets such as South America and Africa.

Reporters in the three phase of the Canton Fair interviewed that they were both labor-intensive products, but labor costs accounted for a higher proportion of light industry products and relatively low raw material and technology costs compared to the two stage exhibitions. The pressure of global industrial pfer faced by Chinese textile and garment enterprises is even greater, and the competitive pressure from neighboring countries such as Southeast Asia has become increasingly prominent. Most enterprises are trying to protect market share in Europe and the United States, and this year they are forced to lower export prices.

Cao Xiaojian, deputy general manager of Jiangsu sainty Limited by Share Ltd, said that since the beginning of this year, our clothing exports to the US have increased slightly, and exports to the EU have been unchanged from last year. The reason is not that the external demand is getting warmer, but that we have taken the initiative to make price measures to cope with the competition from Southeast Asia.

Cao Xiaojian said frankly: "competition from neighboring countries is far beyond our imagination. The price advantage of low labor costs and tariff relief makes the products of Bangladesh, Burma, Kampuchea, Vietnam, Malaysia and other countries have posed a great challenge to our low and medium garment exports."

Compared with the two large export enterprises, there are some small and medium-sized enterprises.

The price pressure faced by enterprises is more prominent.

Shen Xuanyi, assistant manager of Hang Seng import and Export Co., Ltd., Suzhou, said that when demand is not strong, European and American businessmen prefer clothing products with price advantages.

"Compared with Southeast Asia, we have no price advantage, for example, the price of similar products in India is at least 10% less than ours, and customers are slowly turning to those places."

He added: "our branch is mainly in the European market, and orders for this year are expected to drop by 30% to 40%. This is the worst case I have seen in my 14 years."

According to the analysis, because of the lack of terminal sales channels and the lack of pricing power, in the global market downturn and fierce competition, Chinese clothing export enterprises must actively seek price advantage if they want to maintain market share in Europe and America.

Reporters also learned that, due to the weak economy and insufficient purchasing power, the costumes of European and American markets are indeed the trend of the times.

On the one hand, the cost of labor, raw materials, finance and logistics has increased year by year. On the other hand, the increasingly fierce competition in the global industry has led to the shrinking of export prices, and the survival space of China's textile and garment enterprises is decreasing.

The analysis shows that in the long run, it is difficult to continue to develop the strategy of "price war" by reducing absolute cost and enhancing competitiveness. The reason is that with the expansion of China's overall economy, the space of factor cost reduction is becoming smaller and smaller.

Therefore, China's textile and garment enterprises should focus on

Competition, through pformation and innovation, will reduce relative costs, create independent brands and widen the living space.

According to the data provided by the China Textile Import and export chamber, the share of China's textile and garment exports in the three traditional markets, including the European Union, the United States and Japan, decreased by 1.4%, 1% and 2.2% respectively in 2011, but the export to ASEAN increased by 34.1%, exports to Africa increased by 25%, exports to Latin America increased by 38%, and exports to the Middle East increased by 27%, indicating that Chinese textile and garment enterprises are extending their contacts on the basis of preserving the traditional European and American markets.

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The analysis shows that in addition to doing well in internal strength and seeking breakthroughs in fierce competition with Southeast Asian countries, China's textile and garment enterprises still need to be alert to two external risks in consolidating traditional markets and developing new markets.

On the one hand, we need to be vigilant against high technology barriers in developed countries.

On the other hand, we should be vigilant against trade protectionism tendencies in emerging markets such as South America.

Shen Xuanyi pointed out that historically, there are more trade protection activities in South America such as Argentina and Brazil. Therefore, Chinese enterprises need to be cautious in developing local markets. At the same time, enterprises should push forward enterprises' "going global", invest in manpower to understand the market ahead, contact customers, establish receivables channels, enhance their ability to respond in advance, and not just wait for their people to come over at the fair.