Textile Market: The 3 Month Account Period Is Normal. Can Your Profit Exceed The Interest Paid?

Some people say that 2019 will be the coldest winter in the textile industry.

It is said that the textile industry is facing a completely new transformation.

Others say that intelligent upgrading will bring different vitality.

What was the development of textile industry in 2019?

"No loss is win"! The environment of textile and clothing is not easy: enterprises are losing a lot of money and their profits are shrinking.

It is understood that since entering 2019, the number of textile, clothing, apparel industry and enterprises has been hovering between 13637, compared with the average of 14555 in 2018, and the number of textile and apparel enterprises in August 2019 is 13660, almost 4 years low. As expected, 19 years later, the profits of textile, clothing and apparel industry are shrinking.

In 2019, the total profit of textile, clothing and apparel industry was 5-8, -1.3%, -0.8%, -3.5% and -1.1% respectively. Profits are falling, profits are falling, and practitioners are changing or even going bankrupt.

Although the number of textile clothing and apparel industry is decreasing, the proportion of loss making enterprises is rising. The average ratio of deficit enterprises in 16-18 years is 14.9%, 14.1% and 18.2% respectively. The average ratio of loss making enterprises in 2019 was 21.5%. In other words, 21.5 of the 100 textile and apparel industries were losing money. It is understood that the textile and clothing exports are blocked, the domestic market competition pressure is too big, too few, the price war is becoming more and more intense, the profit falls naturally, the loss is not difficult to imagine.

The textile and clothing industry has not only declined in quantity, but also the quality is much worse than before.

After 2019, China's textile and clothing industry has increased, especially after entering April. The number of enterprises in the 4-7 months of losses was 10.2%, 7.2%, 9.2%, 10.1%, respectively, which is even more alarming than that in August. It is not hard to imagine that the growth rate of losses in China's textile and clothing industry is expanding in the past 19 years. The total amount of losses in August increased by 33.3% year-on-year, while the average growth rate in 2019 was 29.8% in 2019.

From the data point of view, this year's textile and clothing market is clear at all. No wonder practitioners say that profits are squeezing and not making money this year, and some even say that "no loss is win."

Back to the black pot, take plate Xia, Domino textile market "loose"!

This year, textile enterprises are the most stressed, because businesses in the upstream are almost always selling on credit, but buying raw materials is a cash payment knot. In this way, weaving enterprises are equal to "the most darkest pot" and "the largest number of dishes". As long as there is a problem in the production chain, weaving enterprises basically do not want to receive money. As for the advance payment, it is almost nonexistent when everyone is short of money. With the closing of the year, the vacation time of enterprises has basically been released. The number of days in the market is relatively limited, with less than one month left. The main tasks of recent enterprises are mainly to recover accounts, and the purpose is only to cash in at the end of the year.

1, weaving Market: arrears 2-3 months into normality

This year's arrears time: this year, the gray fabric market arrears period basically maintained in 2-3 months, more than half a year or more, or even bad debts. In short, this year's grey fabric market is mainly based on arrears, and a small number of manufacturers are paying cash in cash, paying for old customers' flow, and paying a batch of goods with a batch of goods. This situation is very optimistic.

In arrears in previous years: in 2017, due to the shortage of supply, queuing and other hot goods, the amount of arrears was greatly improved, mostly cash loans, and there were very few arrears, even if the arrears were 1 months or so, it would not be too long. In 2018, with the oversupply of demand and the gradual decline of the market, the time for arrears of grey cloth gradually extended to 2-3 months and longer.

Yang Chun, a leading silk weaving manufacturer, said: "this year's arrears are worse than before. Recently, I dare not take the money out of debt. I'm afraid I can't get it back. The customer has been in arrears for 1 months. Now it will be 2 months or even longer. We have been collecting money this year."

2. Textile traders: arrears extend to more than 3 months.

The time of arrears this year: the balance of trade orders is even more serious than that of grey debts, and this has always been the case. Most of the domestic orders are required to pay the deposit, and the remaining payments are in arrears. This year, the amount of arrears has also been extended from the monthly knot to more than 3 months, or even longer. In contrast, the situation of foreign trade arrears will be better than domestic trade, and most of the payments will be made according to the contract.

In 2017, the shortage of gray cloth also made the traders' waist hard, no shortage of orders or even busy, so as to screen customers and eliminate the slow customers, so the repayment situation was improved, mainly in the monthly knot. By 2018, orders were decreasing. Traders had to reestablish the customers whose money was refunded, and the customers who had made quick payments also stretched their arrears, so the arrears were extended to 2-3 months.

A trade company official revealed: "this year's domestic trade debts are relatively large. An old customer had unpaid loans in the past year. Last year, there was no settlement, plus this year, up to now, there are about 1000000 arrears. Every time I go to ask for payment, I often pay 100 thousand for a few months, which is not clear.

Under the situation of excess capacity and shrinking demand, gray cloth traders and trade dealers have to sell cash and dispose of goods in order to expand sales and increase market share. This is also a forced practice, but it also makes accounts receivable increase.

It is called "annual clearance and annual clearance". This year, the textile market environment is not good enough. In the past two years, the situation of money recovery has been improved by the increasingly weakening market. The biggest problem for enterprises in the textile industry chain this year should be "money shortage", which may be the last straw to crush the enterprises in this year's market.