Inflation and tightening shrinking garment enterprises textile companies how to go?

On the way from Xiaoshan to Shaoxing in Hangzhou last month, Li Liyan, deputy general manager of Huafang Co., Ltd., telephoned the company from time to time: “Now the price of Indian yarn has fallen to more than 15,000 yuan/ton. I think we can wait. , to see if it will not fall again. "Compared with the highest point last year, this is considered a "cabbage price", but Yan Liyan is careful not to buy in large quantities to prevent the market from continuing to dive.

Zhang Zhiyong, sales manager of the sales department of Hebei Ningfang Group Co., Ltd. sat sideways with the order: “Now whether it is a foreign trade order or a domestic order, it is not satisfactory.”

Compared with the dismal business in the upstream, the end market is going to be much more prosperous. In the first half of the year, many clothing brands have submitted a good performance report. If the second half of the year continues to be bright, there are many factors that must be considered.

Upstream: Last year, Grandpa, grandson this year Last year, Chen Ling, president of Huafu Color Spinning Co., Ltd. told her marketing staff: “You need to transform your wife’s role into a mother-in-law as soon as possible.” Later, she taught them: “Market Let you upgrade to Grandpa.” Indeed, for most yarn companies last year, it was an unforgettable glory era, and many years of unmarketable varieties were robbed by high prices. However, Cheng Xiaohe, Xiao He also lost, feng shui suddenly changed, this year with Zhang Zhiyong's words: "Many companies made last year's money, this year all lost in more than just."

“At the moment, due to the impact of cotton price fluctuations, the volatility of terminal orders is very large. Many manufacturers obviously place orders and will drag them again, hoping that the cotton price will drop further.” Chen Ling said, “It turns out to be Orders are issued twice a year. Now it becomes 4 times, 6 times, or even 8 times, 12 times a year, resulting in very fine and fragmented orders.” The smart salesperson also quickly adapted to the new role change: “ This year 'grandson'."

For this case, Sun Ruizhe, vice president of the China National Textile and Apparel Industry Association, believes that on the one hand, downstream companies are causing market uncertainty, which is a typical “buy up or not buy down” mentality; on the Other hand, it is also subject to corporate funds. The impact of tension. According to his judgment, this trend may continue for some time, but from a recent survey of the Shaoxing textile market, the situation has improved slightly. The panic state of the previous period is now stable, and the company is on the next round of the market. The demand created a little confidence. The price of upstream products is gradually bottoming out and will be relatively stable in the coming months.

Even facing such a stagnant market environment, some companies are still not willing to be "grandchildren", such as Huafu. In Chen Ling's opinion, "It's not that the market has changed, I've changed from 'grandfather' to 'grandchild', depending on whether or not you have a positive attitude." This year, she warned her employees: "Face In this kind of market, we have to do better to be the way out." How to do better? In addition to doing a good job in product quality, we must also develop from a horizontal position and extend the market in a longitudinal way, in order to achieve “I have no people”.

Downstream: The price of cotton has fallen. Clothing has gone up against the sharp drop in cotton and cotton yarn prices. Many apparel brands have raised product prices this year, and the overall price has risen by 10% to 20%, and some have even gone up by 50%. In response, many brands explained that due to the use of high-priced cotton purchased before the Spring Festival. However, industry experts pointed out that the proportion of raw materials in the brand cost is not large, and the transmission speed of raw material costs is not so fast, according to Sun Ruizhe estimates, the production cycle of clothing is 6 months, the fabric is 12 months, Yarn is 18 months. According to this transmission speed, the raw material price increase effect should be achieved by the end of this year and early next year. It does not rule out the opportunity for clothing brands to increase their prices. If so, the current apparel price level is a high factor.

Consumers complained about the complaints. Many listed companies submitted a good financial statement in the first half of the year: the operating profit growth of Baoxi Bird, Jiumuwang, Meters Bonwe, Dr. Frog and other brands exceeded 40%, seven wolves and semimalves. Lilang, Belle, etc. can achieve a pretax profit growth of more than 30% at a high base. Compared with other sports brands, such as Li Ning and China Sports, there was a year-on-year decline. This was mainly due to the influence of leisure and fashion brands on the substitution of sports brands.

Right now, autumn is listed one after another, still "buzzing up" constantly, nevertheless, major brands autumn and winter orders will still full of orders, so many people are optimistic about the performance of clothing in the second half, that will maintain a good growth in the first half.

Of course, some analysts have pointed out that it is some brand enterprises that have really tasted the sweetness. For most SMEs, there are few companies that are planning to increase their labor costs, transportation costs, and store rental costs. Moreover, for the middle and low-end markets, since neither the rural peasants nor rural migrant workers who work outside have increased their incomes this year, consumer confidence in the market will be affected in the second half of the year.

These achievements made by Chinese brands are in the eyes of Li Keluo, an economic research expert in the fashion industry, and are related to the extensive development model. If Lilang, there were 2,492 stores nationwide in 2008, 2,561 stores in 2009, and 2,885 in 2010; Senma had more than 4,000 in 2008, more than 5,000 in 2009, and more than 6,000 in 2010; From 2,800 to 3,600 stores, Belle (not a Belle independent brand) has expanded from more than 9,000 stores to 11967 stores in only three years. However, the average store revenue of these brands did not change much in three years. Lilang’s store revenue in 2008 was RMB 450,000 in 2009, RMB 600,000 in 2009 and RMB 710,000 in 2010. On average, the single-store revenue per month is about 60,000 yuan. This is a far cry from ZARA's one-year revenue of one billion yuan.

Terminal: Behind the scenes of high prices, the future of China's textile and apparel industry is always on the lookout for the huge domestic market. However, it is embarrassing that China consumes a large number of outflows every year. When people analyze this view, they usually point to an imperfect business system.

Sun Ruizhe has a description of the current domestic commercial system: “Our brand now needs to enter the department stores of first- and second-tier cities in China. Not only has it been picked and picked, but it has also been subjected to very harsh conditions, such as deduction points are now generally up to 28%. To 30%, after going in, there must be guaranteed sales at the end of the year. If we fail to meet this standard, we will be cleared out.” So we finally saw a strange phenomenon - as a country of origin, bought in a department store in China. Products may have higher prices than similar products in foreign department stores. According to Sun Ruizhe, this will also push up the price of clothing. This not only does not benefit the consumer, but from another perspective it suppresses their desire to consume, but also adds unnecessary business costs to the company.

Some foreign counterparts obviously follow the laws of commerce. Some department stores not only rent their own stores, they also operate many private brands. Sun Ruizhe said that the general department stores that own private brand in the entire store account for a higher proportion, in the financial crisis hit in the past few years the effectiveness is also the best; on the contrary, the lower the proportion of own brand, the ability to resist risks The weaker. From this point of view, China's department store industry still has a lot of room for improvement.

Fortunately, some new business models are emerging before improvements are made. Sun Ruizhe elaborated: “The wholesale market in the central city has shifted to retail sales, Dahongmen, Guanyuan, and the zoo in Beijing, and its commercial facilities have now been greatly improved. Their wholesale functions are being diluted, and the past 'B to B' Turning to the 'B to C' model, that is, facing a large number of urban consumers. This is a new business model. Will this business model evolve into a professional shopping mall resembling a foreign country in the future? You can wait and see.” Another new business model is online shopping, clothing ranked first in the online shopping sales rankings. Sun Ruizhe believes that these new business models will impact on some unhealthy factors in the original model.

Once the business system has been improved, it will drive the entire consumer demand, and then it will benefit not only the terminal but also the upstream.

In short, 2011 is a special year, with inflation on one side and monetary tightening on the other. For the future road, Sun Ruizhe suggests that companies: "Strive to go upward, with patience to the downstream, there is the courage to cross the border, can not see clearly follow." Deputy Secretary-General of China National Textile and Apparel Association, Yang Shibin then Proposed: "To be efficient and not high-speed, stability is not fast." Then, what model do you fit in? (Author: Chen Honglan)