Why China's textile and garment industry is difficult to carry on

At the same time as raw material prices are hanging upside down, inventory rates are high, labor costs are rising, and so on. In addition, under the backdrop of continued weakness in the international and domestic apparel market, many disadvantages that have long been accumulated in China's textile and clothing industry have started. One manifestation.

The high cost of production under the rising cost of production in China's textile and garment companies is currently facing two reasons. The first is that the labor costs continue to rise, and the advantages of labor costs in China's textile and garment industry have gradually been lost. The second is the high cost of raw materials, mainly the domestic and foreign cotton price gap as high as 4,000 yuan per ton.

The textile and clothing industry is a labor-intensive industry. In the past, China's textile and garment companies have always relied on manual or semi-automatic generation. Because the labor cost was low at that time, our country's textile and apparel products could quickly occupy the international market with the advantages of inexpensive materials. However, with the continuous rise of labor wages in the textile and garment industry in recent years, the wages of skilled workers in China’s current textile and clothing industry have reached or exceeded the monthly level of 4,000 yuan. It is understood that at present, the wage costs of China's textile and garment companies account for more than 35% of the total cost of the company.

In the mid-to-late 1980s, which is not far away from now, workers want to enter the textile factory to bring in the money, and individuals also have to pay higher training costs. However, nowadays, endless employment shortages and recruitment difficulties have become the most troublesome issue for textile and garment companies each year. In the textile and apparel industry, wages have not been low, and there are still companies that cannot recruit workers. As a result, we have to face an even more worrying problem. Nowadays young people are engaged in textile and garment work. After encountering such objective factors as noise, labor intensity and so on, they are no longer willing to work in this area.

At the same time, with the 2012/2013 6,506,400 tons of cotton being stored in storage, the current cotton prices at home and abroad are as high as around 4,000 yuan per ton, so to a large extent cotton import quotas determine the fate of textile companies. Whether the business is good or bad is not about your technology, management, and cost control, but whether you can get quotas. According to industry sources, the current cotton import quotas are tied up with reserve cotton auctions, that is, one ton of reserve cotton is taken by the textile companies and will receive a corresponding one-third quota of imported cotton. Companies that want to produce but not import cotton quotas naturally only have another way of thinking. That is to find textile companies that have quotas to purchase imported cotton quotas. In fact, the sale of imported cotton quotas has become an open secret in the industry. The current quota transfer price is about 3,300 yuan per ton, which undoubtedly greatly increases the production costs of textile companies.

At the same time, it is worth our attention is that many textile companies reflect the level of reserve cotton put is not high and many are cotton, cotton quality is difficult to meet the needs of production varieties such as high cotton. In addition, some small and medium-sized textile companies also face difficulties in the process of capital turnover. The main reason for this is that current reserve cotton sales are sold in a “bundle” manner. Each bundle weighs about 200 tons, and textile companies need a million dollars to buy a bundle of cotton. It is undeniable that whether or not the cost of production can be effectively reduced will be the most important factor for the survival of any textile and apparel company in the country in the future.

The helpless increase in operating risks has always been an open secret in China's textile and garment industry. It is understood that as of mid-April, 2013, China's textile and apparel industry has announced that there are 50 listed companies in the 2012 annual report, and its total inventory is about 57 billion yuan. The high inventory problem in textile and garment companies not only occupies the company's liquidity, but also consumes manpower and material resources. It also increases the company's management costs and profit-making costs, lengthens the product turnover cycle and reduces the company's overall profit. Undoubtedly, textile and garment companies are profitable if they make profits from inventory products. Basically, they do not make any money, because the most valuable thing in the textile and apparel market is the inventory of end products.

High inventory has become a chronic problem in China's textile and garment industry. High inventory not only hinders the update of textile and apparel products, but also causes a serious decline in the profitability of textile and garment companies, and it is very likely to trigger a crisis in the capital chain of textile and apparel companies. In other words, the high inventory of textile and garment companies is a high-risk hidden danger. At the same time, it has also become a bottleneck restricting the development of a textile and garment company.

However, at present, China's textile and garment enterprises, especially garment companies, still have a single and original approach and method in dealing with inventory issues. It is understood that due to the strong seasonality of apparel products, the short-term consumption cycle and the prevailing fashion are changing rapidly. Therefore, when the seasonal clothing cannot be sold, companies can only rely on a large number of discounted sales and even lost sales. However, what is neglected by our entrepreneurs is that these behaviors are seriously hurting the brand image of apparel companies.

In fact, China's textile and clothing companies suffering from high inventory have never stopped looking for solutions. Or seek cooperation with online merchants, or choose sinking channels, etc. It is true that various measures to reduce the inventory of textile and apparel products will certainly play a role. However, without thoroughly solving the cause of the problem of high inventory, all these means and methods are palliative and cannot change the crisis and challenges facing the survival and development of enterprises.

For example, even if a textile and clothing company digests inventory products in a short period of time, a new round of high inventory will be generated immediately, and so on.

China's textile and garment companies must solve the problem of good product inventory, it should be said that there is still a long way to go, but also need to improve their internal skills. The operating risks of textile and garment companies also come from the appreciation of the exchange rate of foreign exchange and the internal devaluation. Especially for textile and garment companies, which mainly rely on foreign trade and exports, the resulting evaporation of profits has already caused them to complain and even be on the verge of dying.

Since textile and apparel products have almost become unprofitable as a result of the rise or decline of foreign currency, the selection of textile and garment companies in China is nothing more than two. The first is to stop the processing trade in foreign production; the other is the transfer of textile and garment enterprises.

The relocation of textile and garment companies is not easy. In the past, under the guidance of the government, many enterprises began to shift to the central and western regions. However, with the continuous rise in labor wages, the current labor costs in the central and western regions are not much different from those along the coast. Moreover, with the increase in the cost of logistics and transportation, most of the textile and garment companies have moved in after the inward movement. Did not achieve the desire to reduce production costs. Therefore, under such circumstances, some textile and apparel companies have to move to Southeast Asia such as Vietnam, Myanmar, and India to reduce the impact of rising ***, labor and raw material costs.

The sad innovation behind textile innovation is a cliché topic. What kind of meeting in the industry, what kind of forum to do, more or less have to say this issue. In fact, the content covered by innovation in the textile and apparel industry is very complicated. These include innovation in textile technology, innovation in marketing models, innovation in business ideas, and innovation in corporate culture. However, what is regrettable is that relevant people in China's textile and garment enterprises, including various experts and scholars, and various types of business owners, are talking about innovation and most of them are leaders. However, there are few innovative ideas that are implemented in action. The smell of "great thunder, little rain".

The result of this phenomenon of "thinking giants, dwarves in action" is, in the final analysis, the implementation of innovations by textile and garment companies. It will inevitably require a large amount of funds to be invested. At the same time, such input cannot guarantee that 100% of the benefits will be realized. Because, no matter what kind of innovation is, it will be "invariable" with failure. Therefore, textile and garment companies always look cautiously in terms of innovation, fearing that one-sided mistakes will end in a "losing everything down."

In addition, the “occupationism” habits that have been formed in the textile and garment industry in China for a long time are also one of the important factors that hinder innovation and development. It is understood that the so-called "innovation" of many textile and garment companies in our country is only a simple imitation. Because of its short time, small investment, low risk, and simple operation, this imitation is said to have been widely adopted by the industry from the early stage of industrial development. Seeking truth from facts, this also provides some help for the development of China's textile and garment industry. However, to this day, China has already become a big country in textile and clothing, and the drawbacks of this kind of imitation and innovation have also been exposed. One is the long-term customary imitation of others, resulting in weak or almost no research and development capabilities. The second reason is that the core technologies that are caused by weak research and development capabilities are subject to people. The third and most important point is that the development of China's textile and garment industry has always been at a low-tech level. Objectively speaking, the lack of substantial innovation has made our country’s dream of transforming from a big textile and garment country into a textile and garment power “over and over”.

In addition, in the aspect of marketing methods, China's textile and garment companies have never innovated a more scientific model for several decades. It is understood that textile and apparel companies, including listed companies, are still selling products in the form of direct-linked stores and franchise stores. In fact, this type of marketing model is relatively backward, and there are potential risks. For example, there is no sufficient number of qualified store managers and marketers; failure to find good reputation, the right facade of the store, and other uncertainties may lead to the failure of the marketing plan.

People always wear clothes and cover, so there will always be only closed businesses and no closed businesses. Ebb Tide, the survival of the fittest, and the elimination of the market laws are only weak ones that are not suited to the development of the times. After this round of baptism, excellent textile and garment companies will surely come to the fore and usher in a broader space for development.