Foreign Textile And Garment Industry Encountered Cold Spring, The Next Three Months Or The Most Difficult.

Under the outbreak of the new crown virus, the traditional foreign trade industry is also deeply affected. In February, the outbreak of the domestic epidemic, the factory resumed production difficulties, no shipment; in March, the outbreak of overseas outbreaks, a large number of orders were canceled, and goods can not be delivered; in the face of such a situation, Hugo network launched a special report on the foreign trade fission under the epidemic, which will deeply analyze the survival status of traditional foreign trade enterprises under the epidemic situation, and invite industry experts to work together to help them lose their way. The traditional foreign trade enterprises point out the way out.

A new crown pneumonia outbreak has hit the "golden four silver" textile and clothing export season. According to statistics from the General Administration of customs, the export volume of China's textile and clothing in January 2020 -2 was 29 billion 835 million US dollars, down 20% from the same period last year. Among them, exports of textiles (including textile yarns, fabrics and articles) amounted to US $13 billion 773 million, down 19.9% compared with the same period last year, and exports of garments (including garments and accessories) were US $16 billion 62 million, down 20% from the same period last year. From the perspective of foreign trade data, the export situation is not optimistic.

Why are textile and garment exporting enterprises more affected by the epidemic than other industrial enterprises? With the global epidemic in the second half, the textile and garment enterprises are facing the most fatal part of the current order, which is largely cancelled.

Anxiety of textile and garment foreign trade enterprises: overseas demand is suppressed, and golden month is forced to press the pause button.

David has been engaged in the clothing and textile trade for many years. He told Hugo net that textile and garment industry belongs to the long industrial chain. Once the industrial chain is blocked, the timing of starting conditions of the upstream and downstream industries is different. It is not only difficult for enterprises to start, but also the difficulty of supply chain coordination is rising. This makes the garment industry one of the industries with low recovery rate and slow normalization.

"Especially the wholesale clothing has a strong seasonal character. If it goes through the peak season of spring clothes, it will last for several months." According to its introduction, the peak period of foreign trade is usually in December of the first year and the month of January -2 for the second year. European and American consumers need to replenish their goods after Thanksgiving and Christmas. At the same time, in order to avoid the stoppage of the Chinese new year, they will place an order in advance. Then there will be a low season in summer, which has entered the peak season since September. "At present, the spread of the epidemic in Europe and the United States is expected to be eased until August or even after October, and the total loss of orders is expected to exceed half of the total. In fact, at this stage, customers are generally afraid to place big orders. For us, picking up small bills means rising costs, but this is a helpless way to control risks and maintain customer relationship.

The situation of David is almost the projection of most textile and garment foreign trade enterprises. Wu Yong, general manager of Xiamen zona Garments Co., Ltd. also has the same feeling: "since March, all the colleagues around us have not made the order of the year before, but first, in order to maintain customer relationship, two is to catch up with the popular season, so as to prevent orders from being cancelled and goods into stock. This is the specialty of the textile and garment industry. It keeps pace with fashion and has distinct seasons. He admitted that the domestic epidemic affected the supply side unimpeded and the loss could still be expected. However, at this stage, the outbreak of the global epidemic has a direct impact on demand side, and the weakening of consumption led to a sharp reduction in orders.

If orders are cancelled in large quantities, it is only a superficial phenomenon, so the pressure on foreign capital chain is the crux of the matter. Many foreign trade practitioners revealed that although the company's orders were delivered one year ago, the capital turnover was slightly improved. However, due to frequent phenomena such as breach of contract and withdrawal of documents, the inventory of enterprises was overloaded. Some enterprises export goods stacked at ports can not go out, and the pressure of capital and capital turnover is doubled. In addition, due to the recent rapid decline in raw material prices, the enterprises that purchased raw materials a lot ago lost much. For example, the price of PVC resin powder has been severely affected by the global oil price slump.

The epidemic speeds up the reshuffle of the textile and garment export industry, and how to properly handle orders, production and sales?

With the development of epidemic situation, at present, foreign trade enterprises are more concerned about how to handle the order in progress, and how to arrange the production and sale later.

Funlife brand founder Wu Yanping said: "as a factory side, for ongoing orders, on the one hand, we will negotiate with clients for payment in the form of first payment, to prevent the backlog of orders in the later stage, to complete production in advance, and wait for the release and the improvement of the epidemic situation, so that they can be shipped directly. On the other hand, we have been keeping in touch with our customers, sharing information and doing our best to comfort them. At present, the impact of raw materials on us is not great. As early as the beginning of this February, we reached agreement with the manufacturers of raw materials to ensure stable supply of raw materials and a lot of batches.

For the later production and sales problems, she stressed that the production in the late stage is still dominated by platoon, and the core is still "first, the first and the first production", which is relatively fair. And the factory has saved many new employees after the year to cope with the outgoing rush that has been caused by the epidemic. She further pointed out that three steps should be taken for the sales side:

First, policy adjustments. The policy of overdue compensation was introduced to protect the interests of some customers in the air freight + self delivery mode.

The two is personnel arrangement. For example, arrange sales permanent factories, be responsible for order transfer, reduce the docking process, and do the production, packaging and delivery as much as possible at the first time.

The three is logistics warehousing. At present, in addition to the regular Yiwu warehouse, enterprises also set up a factory straight barn, although the freight rate has increased, but the company has subsidized this, all the time is the most important.

"For ongoing orders, we can consider changing production according to customer needs, such as changing winter clothes into spring summer clothing, flexible production based on raw materials, and flexible production. Next, factories will speed up transformation and upgrading according to the situation of market recovery and customer orders, seize market opportunities, and arrange production and sales reasonably. Kang Cui, director of e-commerce operation of Limited by Share Ltd, believes that "in the final analysis, the reason why foreign trade enterprises are caught by the epidemic is unprepared because the business structure of business and sales channels is too single, which is limited to traditional offline channels, single market and order businesses. Failure to advance structural layout leads to easy setbacks in business operations."

"Affected by the epidemic, the industry changes that took place in the past 3-5 years swept across the industry in the short term, accelerating the industry's shuffling time window," Wu said. That is to say, compared with original enterprises with strong R & D and innovation capability and large scale operation, and cash flow more abundant enterprises, some enterprises lacking of capital strength, relatively deficient quality and weak core competitiveness will gradually withdraw from market competition. Especially small and micro businesses with a poor family base may be more difficult. In view of the difficulties faced by foreign trade enterprises, he analyzed two strategies:

On the one hand, customer orders have been halted, be sure to stop in time. If it is a foreign trade enterprise that makes garments, and the product has not been cut off yet, the fabric can be shelved for the time being first, while discussing with the supplier. If the product has been tailored, then consider whether to switch to other brands of clothing or upgrade to cross border sellers.

On the other hand, it is also necessary to stop the production of customer orders in order to avoid further losses. If they can not be handled in a timely and effective manner, they can be considered to be discounted and sold to some stock purchasers, which is also a way to reduce losses.