Zhejiang: Reduction Of Orders For Silk Enterprises And Reduction Of Gross Margin

Hangzhou is famous for its silk world. Hangzhou Tourists like to buy some silk products, and high-quality and soft silk attracts customers from all over the world to come and buy. But recently, when our reporter visited the silk city of Hangzhou, we found that the bustle of the past was no longer in existence, and the whole market was cold and cheerless.

Reporters in Hangzhou's China silk city turned around and found that the popularity of the city was somewhat deserted. There were only one or two guests in some shops. Some of them simply did not have a single guest. Kim boss has been here for many years. He told reporters that the business of the whole market is much poorer than that of last year. In order to save costs, he did not even ask the salesmen to do everything.

Mr. Jin, a merchant of China Silk City in Hangzhou, said: (now) business is really hard to do. Orders are good. Orders are retail. (very tired) (orders) are not many, down 1/3 from last year.

It is understood that the entire silk market has nearly six hundred merchants, mainly engaged in silk scarves, clothing And fabric wholesale and retail. Sales decline has become a common phenomenon here.

Hangzhou China Silk City merchants said: (Sales) large or small retail sales or wholesale wholesale, we wholesale, this year wholesale compared with previous years, the difference is about 1/3.

Hangzhou China Silk City merchants told reporters: the whole market business is not (very good) than the previous year is always a little worse.

In the interview, the reporter met Halim, a merchant in Pakistan who was shopping. He said he made silk business in Dubai. Due to the decline of local consumption demand, he also had a lot of purchases at present.

Halim, a merchant in Pakistan, said: "two years ago, business was good. I sold more goods. The $200 thousand a month was not very good. It was about 100 thousand dollars a month.

A freight forwarding company in the silk market said that the volume of freight traffic is not as good as before.

The freight forwarding Department of the silk market said, "freight volume is relatively less than before, and it should be less than half.

Zhejiang: silk Reduce orders for enterprises and reduce gross margin

Hangzhou is not only the economic center of Zhejiang, but also a famous tourist city. Therefore, it has always been the main battlefield for the sale of silk. Now the main battlefield is so cold and cheerless that other places can imagine it. What kind of influence will this cold and cheerless bring to Zhejiang's silk production enterprises?

At present, the sluggish consumption of silk not only makes it difficult for small and medium-sized enterprises to do business, but also makes some large silk producers feel pressure.

Chu Yongxing, general manager of the one hundred thousand home silk company in Nanxun, Huzhou, said: "the previous orders need not worry all the year round. Now we have to go to the market and explore the market to find customers.

The silk road is a large silk enterprise in Huzhou. Although the scale of production, the integrity and innovation ability of the industry chain are among the best in the local industry, the production and sales volume of enterprises has also declined sharply in recent months.

Ling Lanfang, chairman of the silk road holding group company, told reporters: "since the late May, there is hardly any big list. The reduction in the production of orders this year should be a decrease of 10% or even about 20% in the same period last year.

Not only is the order reduced, but also the gross profit margin and net profit of the silk enterprises are greatly affected. Jiaxin silk is the only silk clothing enterprise listed on A shares. Data show that although the net profit of Jiaxin silk has increased every year for three years, its growth rate has decreased year by year, from 18.75% in 2010 to 5.04% last year. In the first half of this year, the net profit of the company was even negative. In addition, the gross profit margin of silk, silk, clothing and other products also declined compared with the same period last year. This is not a case. The statistics of 90 silk enterprises in Zhejiang province showed that 33 enterprises were losing money in 1-7 months this year, with a deficit of 36.67%. {page_break}

　　 Low demand for raw materials and pressure on Zhejiang silk enterprises

In the cost of silk production, the proportion of raw materials silkworm cocoons occupies a relatively large proportion. Therefore, the price fluctuation of cocoons has a great impact on the profits of the production enterprises. At present, the whole industry is facing a squeeze of the rising cost of raw materials while the sales volume is declining.

Insiders told reporters that the price of cocoon purchasing in Zhejiang is generally higher than in previous years, and the price of Huzhou has reached a record high. The price of ordinary silkworm cocoons is 22 yuan per Jin, and 24 yuan per catty of good quality, which is 50% higher than that of the same period last year. This has greatly increased the cost of silk production enterprises.

Yu Yongda, deputy general manager of Zhejiang rice silk company, told reporters: "the cost of our product (raw material) is always about 80%. This cost reflects that the end product has a more obvious impact on our efficiency.

Despite the surge in raw material prices, silk producers are almost afraid to raise the terminal price due to sluggish demand, resulting in almost two heads of pressure.

Chu Yongxing, general manager of the one hundred thousand home silk company in Nanxun, Huzhou, said: for example, our cost rose by 10% (to our customers) and 5% people were unwilling.

Yu Yongda, deputy general manager of Zhejiang Mi Sai silk Co., Ltd., said: this year, the whole (bad), especially the gift 40%-50%, is the end product. According to the current situation, all enterprises are afraid to raise prices more than they can.

Faced with the current market downturn, many silk enterprises have actively responded, and have been moving technology innovation and basic industry transfer to improve the market competitiveness of enterprises. A reporter from a silk enterprise in Huzhou saw that in order to get rid of the impact of raw material price fluctuations on the production of enterprises, the enterprise and research institutes developed a colored cocoon together to stabilize the profits of enterprises through differential competition and increasing the added value of products.

Chu Yongxing, general manager of the one hundred thousand home silk company in Nanxun, Huzhou, told reporters: (color cocoon) the profit is relatively high because it is a new product, its customers are interested in it, its terminal products are made, some products profit can reach 80% or double.

In addition to technological innovation, some silk enterprises also reduce costs by extending the industrial chain and transferring. At present, some of the stronger silk enterprises in Zhejiang have begun to shift the sericultural base and some basic raw material processing procedures to the western region, and use the resource advantages and cost advantages to enhance the competitiveness of enterprises.

Ling Lanfang, chairman of the Silk Road Holdings Group Limited, said: (silk industry) the main direction of transformation and upgrading is to increase the added value and move the production process of the Silk Road to the western region. The process of adding value to the brand and making money can be put back to us. (Eastern) a combination of the two sides is the way out for the transformation and upgrading of the silk industry.