The Home Textile Industry Is No Longer Brilliant, And Enterprises Should Pay More Attention To Production.

About 10 years ago, the home textile industry did have a glorious period of relatively high profits. But since 2017, the home textile industry has shown a high margin and low net interest rate, and the industry is facing a severe test.


In the home textile market, "price war" is commonly used by enterprises. But the long-term price war is not conducive to the development of enterprises. This year, the market is plummeting, with fewer orders and less profits. Many home textile suppliers even think of "changing careers".


In September, we began to make fabrics for autumn and winter. What we did before was home textiles, mainly bedding products such as feather quilt and four piece sets. But the profit was too thin, so we started thinking about starting the fabric.


But the profit of the fabric is not very high.


Home textiles, in fact, the domestic brands are so few, we have worked together for many years, the price and profit margins have been very transparent. We are now making home textile fabrics, such as wide spring Asia spinning, peach skin and so on, the profit is only 0.3 yuan / meter, compared with the previous year dropped by 50%. As for clothing, profit margins should be more than that. We are still developing customers.


So what is the reason for a cloth boss who has ploughed many years in the home textile industry to open up new fields?


Domestic demand weakened, orders fell 20%-30%

From the relevant data, the domestic textile industry achieved a revenue of 5 billion 720 million yuan in the first half of 2019, an increase of 3.8% over the same period last year, resulting in a net profit of 480 million yuan, down 12.6% from the same period last year.

From the above data, we can see that the overall performance of the home textile market is "unsatisfactory". The profit of the whole home textile industry has declined, which has also had a great impact on the downstream fabric trade.


A bedding enterprise said: "in the first half of this year, the order volume of home textile mill was down by 20%-30% compared with the same period last year. Now the wide range of fabrics is very popular, generally used for sheets, curtain cloth, etc., mainly sold to Shaoxing, Keqiao and other places, this year we began to make velvet, can make window screening, pajamas and so on, the texture is light and thin, feels very smooth and comfortable, this fabric is not wrong in the market. Other performances are general. Coincidentally, an internal trader also revealed: "we mainly do slub cloth, and the varieties are relatively small and special. Although the profit of fabric per meter is not much different from that of last year, the total volume of orders this year has dropped by 20%, which means that the total profit will also drop by 20%."


The reason why the profit of home textiles is not high is that the home textiles belong to the consumer goods, the use cycle is long, and the family can be used for several years after buying the family. Furthermore, the continuous increase of the logistics cost and labor cost of the enterprise has also increased the burden of the home textile business.


Sino US relations affect the export of home textile fabrics


What is the foreign trade market? Our country has always been a major exporter of textile products, and the key export market is mainly dependent on the United States, the European Union and Japan. More importantly, these 3 countries and regions occupy almost 52% of the total export volume of home textiles in China.


This year's Sino US relations are complex and changeable, and also affect the export of home textile fabrics. "The reduction of orders this year is more affected by Sino US trade," said the head of a home textile export company in Wujiang. "In the past, American customers stabilized their orders every month. Now they are turning over the list, but the volume is reduced. The previous one is 10 thousand meters, and now a list is 5 kilometers." The division and integration of Sino US relations is complicated and changeable, which makes it more difficult for enterprises to take orders and quotations. A head of domestic trade enterprises said: "this year's single volume is less than 1/3 in previous years, and another reason is that this year's foreign trade is difficult to do, and many foreign trade firms have turned into internal trade." This also reflects the reduction in the volume of foreign trade this year, which has led foreign traders to seize the business of domestic traders.


Overall, this year, home textile fabric enterprises have seen a decline in orders and profits shrink. Upstream demand is shrinking, but downstream home textile companies are multiplying.


Overcapacity, home textile profits are difficult to turn around.


In recent years, influenced by environmental protection policies and increasing labor costs, textile enterprises "move north" has become a trend. Suzhou, Shaoxing, Haining and other traditional textile towns are also undergoing transformation and upgrading, which has led to the relocation of a large number of textile enterprises, and the central and western regions are the main positions for the transfer of domestic textile enterprises.


Take Shuyang as an example, the county has more than 130 textile enterprises, of which the home textile industry is its characteristic industry. At the beginning of this year, Jiangsu invested 1 billion of its home textiles in Shuyang.


In addition to Shuyang, Suqian's Siyang Economic Development Zone, a total investment of 5 billion of the "textile giant" Heng Tian chemical fiber home textiles also started here. After the project is completed, it will become a modern textile enterprise with a vertical integration workshop of 180 thousand square meters "polyester spinning, weaving, weaving, dyeing and printing" chemical fiber industry, which can achieve annual sales of 45 billion yuan. The home textile market is in a "blowout" state.


In view of this, the cake in the home textile market has been saturated. This will inevitably lead to a supply exceeding demand in the next few years, and the textile boss will inevitably be forced to join the low price competition. Profits are also hard to improve.


afterword


This year's home textile industry is not very satisfactory. The production capacity in the Midwest, the Sino US trade environment, and the weakening of the whole macro environment led to the reduction of orders in the home textile industry and the decline in profits. It is said that 2019 is probably the most difficult year. How to survive next is a question that every cloth boss should think deeply about. Xiao Bian believes that if you stick to it, you may see the rainbow.