Clothing industry chain under the epidemic: foreign trade orders decrease

This global epidemic has impacted the domestic textile and apparel industry chain.

Wu Ting (pseudonym) is a foreign trade director of a clothing company. She told the 21st Century Business Herald reporter that she has encountered problems such as lack of workers, lack of upstream raw materials, logistics price increases, and cancellation of overseas orders this year.

"Our company has about 4 million ready-made goods, but because the order was cancelled, it could not be sent out, and only 30% of the deposit was charged, so the pressure was very high." Wu Ting said.

Upstream of the garment factory, manufacturers of fabrics and other raw materials also encountered a "cold current".

An expert in the cotton spinning industry of the agricultural product team of CITIC Construction Investment Futures told the 21st Century Business Herald that in March and early April, the domestic cotton yarn and cotton grey fabric start-up load (ie, capacity utilization rate) was lower than the same period in the past four years. According to the survey, a large part of the reason is the sharp drop in foreign trade orders under the new crown epidemic.

In such a situation, "getting through it" and finding new opportunities becomes the key. Taking Wu Ting's company as an example, it has begun to build overseas e-commerce channels and plan promotion strategies to lay the foundation for the recovery in the second half of the year.

The first quarter lost by the textile and apparel industry

There has always been a saying in the textile industry that "gold, three silver, four red and five months", that is, the market conditions will improve from March to May in the first half of the year, and a large number of orders will emerge.

However, this year this booming scene did not appear. The spread of the overseas epidemic has caused a large number of orders for Wu Ting's company to be cancelled.

Wu Ting said that since the beginning of March, foreign customers have cancelled orders one after another, and now only sample orders are placed. "Especially for the orders received during the Chinese New Year, the customer gave a deposit, and we also bought the fabrics to prepare for production. Later, the customer said that the epidemic situation abroad was serious, and even if the deposit was given, the order was resolutely canceled."

How will the cancellation of the order affect the business? Wu Ting told reporters that the company generally charges a deposit of 10%-30%, and the profit margin of millions of orders is generally only 10%. At present, the company has an order of about 3 million yuan, received a 30% deposit, and the profit is about 300,000 yuan. Now it has not been shipped for several months. If it cannot be delivered smoothly, the company will lose 1.8 million yuan. There is also an order to Africa. The goods have been at the port for nearly a month, and the customer has not yet cleared customs. She is worried that this order will also be cancelled.

In addition, logistics issues cannot be ignored. Wu Ting said that the express parcels sent to foreign countries before, such as DHL (DHL Air Cargo), arrived in 5 days at the latest, and now they need to arrange warehouses. A courier that usually arrives in 3 days will only arrive in half a month. At the same time, the price is also rising sharply. The cost of sending it to an airport in the UK was 18 yuan per kilogram, but now it is more than 50 yuan.

During the epidemic, facing risks, the company will not accept overseas orders unless a 50% deposit is paid.

It is not only clothing manufacturers that have cancelled orders, but also upstream fabric manufacturers, and overseas orders have also been reduced and cancelled.

Li Jun (pseudonym) is the factory manager of a chemical fiber company. He told the 21st Century Business Herald reporter that as a company that mainly exports fabrics, the overseas epidemic has had a great impact on the company, and there are currently few overseas orders.

In the downstream garment factories that originally purchased fabrics from him, a large number of orders from overseas export enterprises have been cancelled by foreign customers, and orders from these garment factories have not been received at present.

"We are basically making low-level products for downstream customers to use online products on Taobao and Pinduoduo, and there are not many orders." Li Jun said.

To this end, the company has significantly reduced production. Originally, many employees took 4 days off per month, but now they take 6-8 days off per month. Li Jun judged that after half a year of oversize, orders can be resumed as the foreign epidemic is brought under control.

Experts in the cotton spinning industry from the agricultural products team of CITIC Construction Investment said that foreign trade orders after the year were greatly lost under the impact of overseas epidemics, and the inventory and resumption rate of the domestic cotton spinning industry showed the severity of the situation facing the industry.