How Can Textile Enterprises Save Themselves When Export Orders Disappear?

The textile foreign trade enterprises that have just returned to work have begun to withstand the impact of the spread of the new crown pneumonia epidemic abroad. With the increasing number of overseas diagnoses, some textile and garment enterprises have indicated that their overseas orders have been decreasing sharply, and some enterprises or even all orders have been cancelled.

The customs and Trade Department released the data from January 2020 to February on textile and clothing foreign trade, which was affected by the superposition of the Spring Festival holiday and the new crown pneumonia epidemic. The export volume of textiles and clothing in China decreased in the first two months, and the rate was larger than the total export volume of goods.

Faced with the above situation, some textile enterprises in the "epidemic" change, advance layout. Some experts suggest that the government departments concerned step up the export rebate rate of textile export enterprises and help enterprises stabilize exports.

Export orders disappear

After Hermes and Gucci, French luxury brand Chanel also decided to suspend production in the short term and will close its factories in France, Switzerland and Italy in the next two weeks.

According to the company's statement, "according to the government's instructions, Chanel has decided to close its production base in France, Italy and Switzerland (watch making industry), as well as the production of high fashion, garments, high quality jewelry and jewelry."

It is understood that under the influence of the new crown pneumonia epidemic, the luxury brand of the French Open Cloud group has closed its 6 production plants in Italy. Hermes also announced that it closed its 42 production base in France until March 30th, and many other brands cancelled 2021 early spring holiday shows.

Affected by foreign markets, many domestic textile foreign trade enterprises began to cancel orders and stagnation in production.

Located in Keqiao District of Shaoxing City, Zhejiang, China is the largest textile distributing center in the country. Although the market has been reopened for half a month, business is far less than expected.

"All our foreign trade orders have been cancelled." In March 24th, relevant staff of Nash Textile Co., Ltd., Keqiao, Shaoxing, told the Shanghai Daily that the products were mainly exported to more than 10 countries and regions such as the United States, Italy and the United Kingdom. Now, with the continuous outbreak of the European epidemic, many orders have been canceled, and related production has to be suspended.

Another local clothing foreign trade enterprise staff said that around March is the peak delivery period in summer. Due to the impact of the epidemic, the commencement date was 20 days late, and the factory had an order delay. "The cost has gone up, and we have to pay the liquidated damages for the order. Now the cash flow is tight, and the order from Korea is cancelled. We are facing the test of life and death."

There are many similar withdrawals. The head of a textile enterprise in Huzhou said that the proportion of foreign trade accounted for 90%, and participating in the exhibition was one of the most important ways to expand the market. However, the more than 20 overseas exhibitions originally participated in the first half of this year were cancelled due to the epidemic situation. At this time in the past year, enterprise orders had been scheduled for June and July, but the order after April of this year has not yet arrived.

On March 19th, the Ministry of Commerce held an online regular press conference to announce the spread of the new crown pneumonia epidemic in the world. In some countries, production, consumption and other fields were impacted, trade activities were reduced, and the downward pressure on the global economy increased. In the next period of time, foreign trade enterprises may encounter problems such as sluggish external demand and reduced orders.

Spinning enterprises to change themselves

Faced with difficulties, some spinning enterprises began to change their thinking and layout ahead of schedule.

In February 3rd, the Guangdong textiles import and export Limited by Share Ltd has fully resumed its production and resumed work. As a textile and garment company that accounts for over 70% of export business, the company has accumulated a large number of well-known brands and retailers from the US, EU and South America. Compared with some small and medium-sized textile enterprises, the company's response is more positive and confident.

Recently, the company's staff said that although there has been no notice of cancellation of orders, foreign orders have been suspended in a small range. "The epidemic will definitely affect the quantity of orders. We will develop more products according to the change of consumption structure, provide unique quality services, meet all kinds of needs, and retain customers."

The head of a textile import and export company in Southeast Asia and Africa, Sichuan, said that the spread of the epidemic in Southeast Asia and other countries was less than that in Europe and the United States. After resuming production, the company continued to stabilize the share of Southeast Asian market and maintain the old and offline customers on line.

"Next we will consider the internal adjustment of the import and export ratio." A cotton textile exporters in Xinxiang, Henan also revealed that the company's orders are expected to shrink by about 30% in the first quarter of this year. In the short term, the company will consider shifting the focus of foreign trade sales to the domestic or lighter areas, and developing new overseas markets.

Bai Ming, deputy director and Research Fellow of the International Market Research Institute of the Ministry of Commerce, believes that in addition to stabilizing the strength of foreign trade in the maintenance and expansion of customer channels, it is necessary to retreat and promote the domestic market in combination with the upgrading of consumption. Through deep ploughing the domestic market, domestic enterprises, especially some light textile enterprises, can leave "green hills" under the worsening external environment.

In the face of international exhibitions postponed or cancelled, Zhejiang, Gansu and other places through the layout of "online exhibition" to help foreign trade enterprises to expand the market.

Recently, the Zhejiang provincial council for Trade Promotion (CCPIT) organized enterprises to participate in a number of international exhibitions on line viewing services provided by the "Intelligent Cloud Exhibition (CALSEE)" system. Exhibitors can communicate with merchants on the spot at any location through the network, get the information of customers' needs, solve the problems of failing to visit famous exhibition companies, and exhibitors affected by epidemic situation and so on.

Relying on the relevant digital foreign trade platform, the Gansu Council of trade promotion (CCPIT) provides the "network exhibition trade (experience version)" service platform for the Gansu foreign trade enterprises, and develops "online exhibition" activities to achieve foreign trade at home, find customers at home, and expand the market at home.

Support policies frequently occur

A number of policies to support foreign trade enterprises are also gradually landing.

In March 19th, the general office of the Ministry of Commerce and the general office of the Ministry of Finance issued the notice on "making good use of special funds for domestic and foreign trade to support steady foreign trade, stabilizing foreign investment and promoting consumption", and put forward to give full play to the effectiveness of the central government's foreign trade funds, fully support the basic market for foreign trade and foreign investment, increase support to promote domestic consumption, and release the great potential and powerful momentum of business development everywhere.

Keqiao District of Shaoxing also issued a series of new policies, extending the scope of exhibition subsidies from key exhibitions to all overseas exhibitions, encouraging enterprises to break through 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 high-risk period, speeding up the policies of foreign trade enterprises, and resolving the cash flow problems encountered by enterprises. 。

"This epidemic situation also changes the social concept and people's life rules, changing the way of life and consumption, and changing the industrial ecology and industry structure." Wang Hua, principal researcher of the textile industry "one belt and one road" international cooperation center of Donghua University, believes that with the improvement of consumers' cognition of life and health, the habit of health protection consumption will become a new fashion. Various kinds of textiles, such as protection, disinfection and hygiene, will emerge in an endless stream to meet consumers' new physiological and psychological needs.

Insiders said that the test brought by the epidemic is the driving force for textile enterprises to become bigger and stronger. Textile enterprises should take this opportunity to occupy a place in the "epidemic war" through technological innovation, transformation and upgrading.