The Whole Chain Shock Butterfly Effect Of Textile Industry Affects Farmers

"They call me every day and ask me if they have any goods delivered to them." In April 3rd, Rao Fei, the director of Yiwu Yanfei Jewelry Co., told the times weekly reporter that because of the epidemic, farmers who processed semi-finished products for the company, involving hundreds of farmers in Jiangsu, Hunan, Anhui and other places, are facing a situation where there is no work to do.

In fact, under the influence of the international epidemic situation, the whole domestic textile and garment industry chain can not be "independent" even in any link, even those companies and individuals who basically do not directly relate to foreign trade business.

"Domestic garment enterprises delayed orders and orders for foreign orders, resulting in the reduction of accessories purchased by them, and also affected us." Rao told the times weekly that Yan Fei's jewelry was mainly engaged in the sales of accessories accessories for garment industry, mainly accepting orders from domestic manufacturers, but its revenue still dropped by more than 50% in March.

In the past, hundreds of thousands of yuan wages paid to handmade farmers have been suspended. The butterfly effect, which is blocked by foreign trade, is spreading to the bottom workers.

Moreover, the entire industrial chain of textile industry is undergoing resonance. 。

      According to the report released by the China Textile Federation industrial and Economic Research Institute from March 25th to April 1st, the report on the resumption of production and production of textile enterprises (hereinafter referred to as the "report") shows that the proportion of the 80% of the 190 start-up enterprises in the week has reached the normal level of 33.7%, and the proportion of orders is not normal. The proportion of 50% of the enterprises is 23.2%, which is basically the same as that of the survey a week ago, but with two Before the week, orders fell sharply.

Against this background, about the current situation of textile and apparel industry in foreign trade, the times weekly reporter April 2nd, Jiaxin silk (002404.SZ) stakeholders said that they would not accept the interview. In April 2nd and 3, the times weekly reporters dial Shenzhou International (02313.HK) Shanghai office and Ningbo headquarters telephone, no answer.

An indisputable fact is that under the influence of "force majeure" of international epidemic situation, China's textile and garment industry is also changing.

Whole industrial chain shock

The report released by the China Textile Federation Industrial Economics Research Institute has mentioned that the pressure of export orders reduction in the middle and lower reaches of the industrial chain, such as garments, home textiles and fabrics, is being carried out along the industrial chain to the upstream, and the export industry chain is facing greater pressure on the whole.

In April 2nd, Cheng Weixiong, general manager of textile and clothing management and Shanghai Liang Qi Brand Management Co., revealed to the times weekly reporter that behind the terminal clothing products and the first line foreign trade enterprises, the long chain of textile and garment industry is hidden.

"Textile and garment industry has a relatively fine division of labor, involving many links and enterprises." Cheng Weixiong said.

According to Rao Fei, he even has many subdivision industrial chains behind his clothing accessories industry. "I have more and more differentiated accessories on the upstream. A button and a zipper are also a category that can support a shop. We need to purchase more detailed categories."

Rao Fei's purchase orders are greatly reduced, which will naturally be transmitted to these unknown industrial chains. As mentioned above, hundreds of farmers.

Rao Fei said that in order to reduce labor costs, more than 90% of the semi finished products of Yan Fei ornaments were handed over to farmers, mostly in areas with lower labor prices, such as Jiangsu, Hunan and Anhui. In order to facilitate management, according to convention, Rao will send goods to ten processing points, and the person in charge of the processing point will distribute the work to the farmers. Each person in charge may have hundreds of farmers who will do manual work.

In the case of farmers, this part of the income was reduced during the epidemic.

In addition, the footsteps of layoffs have also been heard in the industrial chain.

In April 1st, Yang Lu, a foreign trade salesman of a garment foreign trade company in Guangzhou (a pseudonym), told the times weekly that the company's big layoffs had spread to itself. "Before it was only the basic wage, the entire foreign trade department was cut off."

Cheng Weixiong said it is difficult to predict the impact of the epidemic on the entire textile and garment industry chain.

He mentioned that the autumn and winter clothing ordering in recent years will also be affected. "Autumn and winter are routinely new in July and August, so after a year, they will start planning for autumn and winter, and now the rhythm is completely disrupted."

According to Cheng Weixiong, the industrial chain of textile and garment industry is very long. We need to prepare surface accessories, printing and dyeing, and we need to schedule the works and make technology version. The current international epidemic situation has had a certain impact on summer orders, autumn orders and even some winter orders.

"The spread of the global epidemic impact has led to the transmission of our entire industrial chain. This is a relationship of prosperity and prosperity, and all losses and losses." Cheng Weixiong said.

Enterprise's ability to resist risks is different.

In April 3rd, the Shanghai staff of an international fast wear brand told the times weekly reporter that many of the international fast wear brands had already stopped shipping. "It is tentatively agreed that the goods produced before May can not be exported, and foreign stores are closed, and goods can't be sold when they arrive."

The decline in global clothing demand has a profound impact on the seasonal textile and garment industry. Insiders say that the pressure of inventory and capital turnover has become the two "mountain" on the back of the domestic textile and garment industry.

The report shows that in the week from March 25th to April 1st, the proportion of industrial clusters with financial difficulties was 50%, an increase of nearly 20 percentage points from a week ago, and more than 10 percentage points higher than that of weekly survey enterprises reflecting capital problems, indicating that the financial pressure of small and micro enterprises is particularly prominent.

It is worth mentioning that in the transaction process of domestic and foreign trade enterprises and international customers, very few domestic foreign trade enterprises will collect deposits, which makes foreign trade enterprises bear greater financial pressure after the cancellation of orders.

"Yiwu does not have the custom of collecting deposits. If we collect the deposit, the customers will go to the place where they do not need to pay the deposit. As time passes, we will not receive the deposit." Rao Fei was helpless.

The cost of labor and site cost also increases the capital turnover pressure of related enterprises.

"At present, our fixed labor cost is about 200 thousand yuan per month, but I am very lucky that the 3 factories are private property and do not have to pay rent." In April 3rd, the head of a clothing trade company in Dongyang, Zhejiang, told the times weekly reporter.

According to him, the current rent in Dongyang is more than 20 yuan and a square meter, so according to the market price, if he needs to pay rent, then his factory's monthly rent is 500 thousand yuan. The previous month's cash income was 2 million yuan, but in March, the company basically had no cash income.

However, compared with small and micro enterprises, vertically integrated enterprises have stronger ability to resist risks.

According to media reports on March 26th, Shen Zhou International chairman Ma Jianrong said in an interview that orders delivery is no problem, and orders have not been reduced.

Shenzhou International is a vertically integrated knitting manufacturer in China. It has the control capability from yarn, fabric, accessories to the full supply chain of garments. At present, the capacity has been fully restored, and the daily garments of Ningbo factory have reached 800 thousand.

Shenzhou International disclosed in March 23rd the results announcement for the year ended December 31, 2019. As the world's leading apparel OEM company, it is China's largest vertically integrated knitted garment manufacturer. Last year, the proportion of sports apparel business revenue increased to 72%, and Nike, Adidas, Uniqlo, and Puma four major foreign brand customers contributed about 83% of revenue.

But such scale enterprises are few in the textile industry. "Textile and apparel industry chain has shown the characteristics of small, scattered and chaotic. In the future, it will be more and more closer to the head enterprises, and to scale, regionalization and vertical integration." Cheng Weixiong said.

Industry upgrading and self rescue

Under the crisis, more and more pure line enterprises began to go online, accelerating the trend of interconnection and interconnection between textile and apparel industry.

Rao Fei plans to start selling live products in April 15th and name himself "Yiwu Fei Fei Ge".

"I had this idea in the early days of the outbreak, and I felt that if I did not improve my competitiveness, I would be eliminated." Rao Fei said that he wanted to do the live broadcast but did not have time. Now it is just empty, so he began to do live training to raise fans, not selling at the very beginning.

Rao Fei did not choose to hire net red as live as many well-known brand enterprises. "As a small and micro enterprise, I do not have enough funds to support a live team. If I do it rashly, I will easily fall down, so I choose to try it myself first."

In addition, this also means that Rao Fei needs to further upgrade the original semi finished product business to the production of finished products, and then need to consider more the preferences of the market and keep pace with the trend.

All these let Rao Fei feel that time and energy are not enough.

"I need to learn a lot of fresh knowledge, also need to shoot the theme, but also take into account the shop on the offline line." Rao said helplessly.

Cheng Weixiong also said that many companies on the line is a thousand armed forces to grab a single timber bridge. "Traffic costs will continue to increase, and may even be more expensive than offline channel costs."

For many of the affected textile and garment enterprises, export to domestic sales is also a consideration. But still faces various problems.

"There is difficulty in the actual operation of domestic sales. Domestic trade has its own suppliers, whether the products are suitable for the domestic market, where the channels for domestic trade are, and the tastes of domestic consumers are all needs to be considered." In March 26th, Zhao Xiaodong, general manager of Shanghai Orient International Import and Export Co., Ltd., told the times weekly reporter.