No Worker To Order, Textile Foreign Trade Industry In The Second Half Of The Year Will Usher In Recovery?

Under the impact of the epidemic, the textile industry as a fast moving consumer goods industry is frustrated. The shortage of workers, the lack of upstream raw materials, the rise in the price of logistics, and the cancellation of overseas orders are in the face. The first quarter of the textile industry has failed.

Despite all kinds of problems, textile and garment export enterprises are still optimistic about the second half of the year. "The enterprises that can survive will not be too bad. They will have the strength to face the epidemic and have the ability to recover after the outbreak."

Source map / Xinhua News Agency

Foreign trade director Wu Ting (alias) did not even think of it. In 2020, her clothing company started such a difficult year.

Her company mainly produces clothing and hats, and more than 60% of its products are exported. The main export markets are Africa, the Middle East, Australia and Europe.

"In 2019, the whole company performed very well, and the factory workers returned home all the year round." Wu Ting said, "before the company's expectations for 2020, the performance will increase by 1.5 times."

The textile industry belongs to the fast moving products industry. The key period of the industry is in the first half year. But the outbreak of the epidemic, especially the overseas epidemic, made the company's "golden first quarter" fail.

Wu Ting told the twenty-first Century economic report reporters that their enterprises suffered from problems such as lack of workers, lack of upstream raw materials, price increase in logistics, and cancellation of overseas orders.

"Our company has about 4 million of the finished products, but because the cancellation order can not be sent out, it has received 30% deposit, so the pressure is very great." She said.

Now, her Company anticipate that foreign trade will be on the right track in the second half of the year, and will begin to actively build overseas e-commerce channels to prepare for the second half of the year.

No worker to order.

At the outset, the impact of the domestic epidemic made it difficult for Wu Ting's business to return to work after the Spring Festival this year.

She told the twenty-first Century business news reporter that the epidemic broke out during the Spring Festival. During that time, the company took many orders, but it could not be produced because of the holiday. Foreign customers have been looking forward to China returning to normal as soon as possible.

The company resumed work in February 18th, but once again, it encountered problems of shortage of workers and insufficient upstream supply.

"First of all, there are tens of thousands of merchants in the China textile market, which are Hubei people. Many of our workers are out of town, and some of them are from Hubei. Many of them are out of town because of the epidemic situation, and less than 40% workers come back in February, and come back to 90% in March." Wu Ting said.

Source map / Xinhua News Agency

However, after the workers resumed work and the upstream raw materials recovered, the spread of overseas epidemic caused enterprises to encounter the problem of cancellation of orders.

Wu Ting said that since the beginning of March, foreign orders have been cancelled, and all customers have cancelled orders. The order is now only available.

"In particular, during the new year, orders were paid to customers, and we bought the fabric ready for production. Later customers said that the epidemic situation was serious in foreign countries, and even if the deposit was given, the order must be resolutely cancelled." She said.

Wu Ting was impressed by an order.

"A shipment of goods arrived in Africa last month to catch up with the outbreak. The goods arrived at the port of destination for almost a month, and the customers did not go to customs clearance. There are many old customers who will return this time, and there is no movement now. In short, the epidemic has great impact on our textile industry. " Wu Ting said.

According to her introduction, about 4 million of the order goods have been completed, but they can not be issued because of the cancellation of customers.

"Our company usually receives 10%-30% deposit, and the average profit of millions of orders is only 10%.

We have an order of 3 million or so on this side. We only receive 30% deposit, that is 900 thousand, and the profit is about 300 thousand. Now that a few months have passed, the goods haven't come out yet. If the goods do not come out, they will lose 1 million 800 thousand. " She said.

Faced with this situation, Wu Ting, director of foreign trade as a company responsible for international trade and development of foreign customers, said that if there was an order during the epidemic period, it would receive a minimum deposit of 50% to start production.

In addition to the cancellation of orders, logistics prices and delays have also become a problem.

Wu Ting said that before sending foreign express, such as DHL (DHL air cargo company) arrived at the latest 5 days, now need to arrange warehouse, a normal 3 days to express, now half a month to arrive.

Because airports are blocked in many countries, and only DHL, FedeX and UPS can be mailed. At the same time, the cost of sending an airport to Britain was 18 yuan a kilogram, now it is more than 50 yuan, and there are more extra costs.

Optimistic about the second half year

Despite all kinds of problems, Wu Ting is not pessimistic.

First, the company adjusted its business strategy.

On the one hand, due to the large demand of hospitals, the company began to vigorously promote the products of nurses' clothing.

On the other hand, taking advantage of the idle time, the company collate the platform of foreign trade and e-commerce in all aspects, and plan the promotion strategy, laying the foundation for the second half of the year.

"Foreign trade difficulties are only temporary. We need to prepare for the recovery in the second half of the year." Wu Ting said, "foreign trade is impossible to keep going bad. Now domestic orders are stable, and our foreign trade is planning for the second half, or even for the future of the overall development."

Their company estimates that the foreign trade market is expected to resume at the end of August. Therefore, there is no plan for layoffs. According to her introduction, the elimination of workers, the company office about 40 people, and no layoffs, just to shorten the working hours, originally a day of 6 days, now is 4 days a week, wages are also reduced accordingly.

"As far as I know, many of our office workers have continued their vacation. We originally planned to stay away from work, but taking into account the need for economic recovery in the second half of the year, we are now laying the foundation and finishing the platform resources in all aspects." Wu Ting said.

She firmly believed that the economy could not remain stagnant and orders would not remain low for a long time.

"For example, the most basic thing is that the school will continue to start school, and the next semester is a new term, which requires school uniforms. During the epidemic season, our sample demand is still a lot. Customers are working at home. They will have meetings after receiving the samples, and wait for the epidemic situation to stabilize.

Wu Ting believes that many people think that foreign customers will transfer textile orders to Thailand, Vietnam and Turkey. Although this is true, the company is not worried.

"First, labor costs abroad are low, but foreign machinery and equipment are imported from China.

Secondly, customs policies and other factors encourage most customers to prefer to purchase in China, such as the policy of reciprocity.

Last but not least, Chinese manufacturers have a fast delivery time. For example, our factory can produce 1 million garments a day, and a factory can complete delivery within 40 days, but there is no such efficiency in Thailand and Vietnam. " Wu Ting said.

So, although optimism is expected to halve the company's performance than last year, Wu Ting is still very optimistic about the textile and garment export industry.

"The economy will always return to normal, and it is impossible to stagnate forever. The epidemic will also restore stability, and now many small businesses have been eliminated. I think the enterprises that can survive will not be too bad. They will have the strength to face the epidemic and have the ability to recover after the outbreak.