Visiting The International Textile Capital Of Keqiao, How Do Textile Enterprises Deal With Order Crisis?

Under the epidemic situation, "Keqiao city of the international textile capital" is also experiencing a "shock" crisis in Shaoxing.

Last year, Keqiao's foreign trade increased by 15.6%, which was 10.6 percentage points higher than that of the whole country. Many traders and entrepreneurs have predicted that this year Keqiao will still usher in the export of "new year". However, a new crown pneumonia outbreak hit the "golden four silver" textile peak season. Just after the resumption of production and rehabilitation, the outbreak of foreign epidemic has led to the cancellation of global exhibitions, the decline in overseas demand and the reduction of orders. In the first two months, Keqiao's foreign trade exports amounted to 1 billion 518 million US dollars, down 20.63% compared with the same period last year. The export situation is not optimistic.

How is Keqiao in the foreign trade area? Visit the international textile capital of two times in the epidemic.

Order crisis is coming.

In mid March in Keqiao, the resumption of production and recovery was in full swing. In order to recover the time delayed by domestic epidemic, foreign trade companies were busy beating jet lag to dock customers, and many round machine factories and printing and dyeing factories rushed to order day and night.

Some foreign businessmen have ridiculed that the textile fabrics that have always been transported by sea are now enjoying the air freight treatment. Feng Jijiang, head of Shaoxing Yi Wei Textile Company, has just finished sending a single cargo, and the air freight fee has risen to 12.5 yuan from two yuan per kilogram a week ago to 22 yuan. "Originally this is the goods shipped by sea at the end of February, so we can only take the air freight for the delivery, and the freight is almost up to the price of cloth."

Feng Jijiang's situation is almost the projection of Keqiao's foreign trade enterprises. Since March, no one has rushed to make the order before the year, one is to maintain customer relationship, the other is to catch up with the popular season, in order to prevent orders from being cancelled and goods into stock. This is the specialty of the textile industry, closely following fashion and seasons.

　　 The operators of Keqiao Textile City are looking for sample information.

What I can't imagine is that the domestic epidemic is going to be over, and the global epidemic is coming. Many countries and regions of Keqiao's textile exports are also affected by the epidemic.

"At the end of February, when we went to investigate, many enterprises still had many foreign trade orders. But when the outbreak of the global epidemic broke out, they could not sit still. In the face of the rapidly changing global epidemic, Tan Ke, director of Keqiao Commerce Bureau, is studying and modifying the research report these days. "It is not long before the time goes, and the forecast analysis at the beginning of the month is not applicable." He said that with the continuous cancellation of orders in the heavily affected areas and the breakdown of new orders, the foreign trade situation in the coming months is not optimistic.

For Keqiao, the domestic epidemic affected the supply side unobstructed, the loss could still be expected, and the global epidemic directly affected the demand side, resulting in a sharp reduction in orders.

When he saw Luo Haiming, chairman of Shaoxing Kaiming Textile Co., Ltd., he just finished the meeting for his employees. He had to repeatedly inform the customers of the possible risks before receiving the order. From now on, he can no longer take uncertain orders.

Luo Haiming's caution is not unreasonable. Kaiming textile exported about 1 billion 200 million yuan last year. According to the current situation, the export volume is reduced by at least 300 million yuan this year. Italy, Spain and Britain account for about 50% of the company's export market share. Since March 10th, a large number of orders have been cancelled and orders have been cancelled. Luo Haiming said: "now customers are not afraid to place big orders. For us, picking up small bills means rising costs, but this is the helpless choice to control risks and maintain customer relationships. "

For this large foreign trade area, the impact of foreign epidemics seems to be more than domestic epidemic. Last year, more than 4500 foreign buyers were stationed in Keqiao. At present, only 1000 people have returned. Many foreign business buildings have not been heard for a long time. International exhibitions or postponed or cancelled international exhibitions are not yet known. Whether the Shanghai fabric exhibition will be held as scheduled is unknown. For foreign trade enterprises, the chances of obtaining new orders are greatly reduced.

The most anxious thing is uncertainty.

In the past two weeks, Luo Haiming has to do two things every morning: turn on the cell phone to see the latest progress of the global epidemic; take turns to ask customers in different time zones to ask their respective countries' epidemic situation. Seeing that the number of confirmed figures has been rising, he thought that the "affordable" market was falling down one after another.

"Two weeks ago, a Bangladesh customer was anxious to add an order of 200 thousand M fabric to us, but today he asked if he could cancel it." This change made Luo Haiming realize that there is still a story behind the crisis: Although the epidemic in Bangladesh is not serious at present, the garment processing factory that imports Keqiao's textile fabrics will eventually export to the European and American countries in the worst hit areas.

It can be seen that the crisis is not limited to the immediate reduction and cancellation of orders. With the spread of the new crown pneumonia epidemic in many countries, it may eventually bring about many risks, such as market shrinkage, cash flow depletion and exchange rate fluctuations, and the anxiety caused by these uncertainties is also passed between foreign businessmen and entrepreneurs.

These hidden risks are even more worrying. For the textile industry, Italy has become a major disaster area. Some experts pointed out that Italy is Europe's textile center, Keqiao's largest export market to the EU, and also an important springboard for textiles entering Europe. In addition to exporting directly to Keqiao, many of the fabrics in Italy have been purchased and sold through other countries, and they have gone to Italy for clothing design and processing, and have been sold to other parts of the world.

　　 Production workshop of Shaoxing cloth Textile Co., Ltd.

The industry pointed out that most of the textile fabrics purchased in Eastern Europe and southern Europe will eventually arrive in Italy, while orders in Mexico, South America and other countries will eventually be in the United States. "The epidemic in these countries is changing every day, and we don't know how to take it." Many foreign trade people lamented that due to the impact of the epidemic, the products could not be delivered smoothly, and the export enterprises in Keqiao would bear heavy losses.

In addition to the epidemic itself, the recent slump in crude oil prices has also exacerbated uncertainty in the foreign trade sector. "It not only affects the price of upstream chemical fiber products, but also causes fluctuations in foreign exchange rates. What foreign trade is most afraid of is exchange rate instability." Zhang Jianfeng, head of Keqiao silk Vera trading company, said that the company was attacking emerging markets such as South America and the Middle East. Orders have been cancelled recently, with almost 20% cancellation.

What he is more worried about is that if the epidemic escalates, the emerging market currencies or large devaluation will further reduce the profits of US dollar settlement and increase the risk of international trade performance and settlement. For enterprises, this is greater uncertainty.

Such worries, Yu Shaobo, general manager of Shaoxing Bao textile dyeing and printing company also had. In 2015, commodity prices plummeted, and US crude oil futures fell below $27 a barrel, making Nigeria's currency devaluate rapidly in oil exporting countries. With the trauma of the Ebola epidemic, the purchasing power of the local market almost returned to zero. At that time, nearly 70% of the market was in Nigeria. At the time of crisis, the enterprise resolutely abandoned the original product, looked at the low demand of the African market, redeveloped high performance price ratio products, and marched into a diversified market. With that lesson, Bao textile has always maintained a low debt ratio to stabilize the "basic market", diversify the market as the starting point, and plough more than 30 African countries to diversify risks. "For the exchange rate risk caused by oil slump, enterprises should prepare early." Yu Bo Bo said.

Control risk and layout in the long run

Under the global new crown pneumonia epidemic situation, Keqiao's foreign trade export enterprise embarked on the anti risk track. Experienced foreign traders understand that at this point, we can't just miss the "flying" order. What's more important is to ensure a safe landing after the outbreak.

If we want to sit firm in this round of epidemic shock, we must first control the risk belt. Kahashi Ru, general manager of the import and export company, announced that the rent and labor cost of office buildings were 40 thousand yuan per day, which means that orders for two small containers could be offset every day. Her desk is full of books and reports that record orders, customers, and she can blurt out all kinds of data.

Under the rule of market competition, profits are always associated with risks. But for foreign trade enterprises in Keqiao, risk control is much more important than profit. One side is the risk control of income. Every time the customer comes to do a detailed calculation, he will not pick up the bill. He must not ask for a small bill. Before he organizes the production, he will ask the customer whether he will cancel it or not. The other is the risk control of the enterprise cost, the debt ratio, the cash flow and the raw material price. In order to survive this difficulty, more enterprises have stepped up the pace of reducing leverage and enriching cash flow: some have also lost part of their loans, and some have been looking for banks to negotiate more favorable lending rates.

　　 Keqiao Textile City operators are sorting out fabric samples.

The loss is inevitable. Many entrepreneurs are looking for the long term to start the competition in the post epidemic era. Since returning to work, Luo Haiming has gone to the market to see fabrics every weekend. 1 months later, his office was covered with high grade autumn and winter fabrics from the market. "These are the hottest styles of the year. We should pay close attention to design research and send samples to our customers." Luo Haiming marked his "spoils" with different stars and corresponding markets, and made a brand new sample book, which is his "secret trick" to deal with the crisis. In recent years, he has been actively selecting customers, and high quality customers have become the confidence to overcome the crisis.

Whoever wins the long run is the winner. At this juncture, governments, banks and enterprises need to work together to deal with the worst possibility with the most positive actions. In Keqiao, in addition to the large production oriented foreign trade enterprises, there are more than 70% of the circulation foreign trade enterprises, and thousands of small and medium-sized foreign trade enterprises are distributed in the major textile cities. A number of small and medium-sized owners said that when the new business revenue is close to a pause, they are faced with many difficulties such as tight funds and cost pressures. They expect the government to help alleviate the pressure, continue to introduce policies to reduce costs, and expect banks to increase their efforts to provide financing support for enterprises.

In order to solve the new pain point of enterprises, Tan Ke is also very busy these days. The logistics can be broken and the employees can not get enough. The international exhibition has stopped. Can you do the exhibition in another way? In March 20th, with the help of online platform, the 2020 global textile cloud exhibition was formally opened, attracting more than 40 enterprises in one day. Exhibitors and merchants can display their products to customers through live broadcast of two-way interaction, and businessmen can receive timely feedback through barrage chat to facilitate the development of more salable products.

In order to enhance the feasibility of cloud exhibition, a few days ago, Tan Ke also went to a research institute in Shanghai. "Fabric is a special commodity, customers must have intuitive experience to dare to list. We want to see if we can cooperate with the testing organizations, what products the customers are looking for online, and let the third party inspection organizations report the excellent fastness and so on, helping customers to place orders boldly."

The more we face difficulties, the more we need to see clearly. In view of the plight of foreign trade enterprises, Keqiao has promulgated a series of new policies: extending the scope of subsidies for exhibitors from key exhibitions to all overseas exhibitions, encouraging enterprises to make breakthroughs in the light market of the epidemic situation; implementing the government's joint insurance policy of export credit insurance, eliminating the worries of enterprises in the high-risk period, vigorously promoting the development of cross-border electricity providers, and encouraging enterprises to create overseas businesses. We should increase online sales and participate in online exhibitions to expand the market, speed up the policies of foreign trade enterprises and resolve the cash flow problems encountered by enterprises.

Dealing with uncertainty with certainty is the bottom line for governments and enterprises to cope with. The certainty lies in the fact that many of them are sensitive to market information, and a strong foreign trade subject to crisis response. Keqiao, the "international textile capital", is formed in the international competition. There are strong industrial chains with relatively complete and complete products. Feng Jijiang, for example, India customer orders for next 300 thousand meters, Keqiao can complete the whole process from raw material purchase to printing and dyeing in 15 days, 30 days shipping to the port, and in India, the order of volume at the same time will take 50 to 60 days. "Low price and fast speed, Keqiao has the best cargo organizer and well-trained chain in the world." Feng Jijiang said.

Every game and every competition means the opening of a new journey.