By Bao Yuanyuan
Recently, with the tide of "shutdowns" of China's sportswear brands that has attracted wide attention and the predicament of excessive stock and slipping profit for men's clothing brands, it is now imperative for China's textile clothing enterprises to get rid of their product stock. Besides challenges in the domestic market, the textile clothing industry also faces pressure of decreasing export. According to custom statistics, from January to November, 2012, the export value of China's textile clothing was US$ 230.8 billion, growing merely 2.1 percent year on year, the actual growth being negative if price is not factored. The fluctuation of export demand raises concern for the development of the textile industry.
Industrial statistics show that recovery of China's textile industry is still weak and the foundation is not solid, reflected in the rapid fall of investment growth rate, continuous reduction of new projects, and significant slip in cotton product export. Urgent reform and upgrading is needed for China's textile industry.
Difficult, but with opportunities
Low-end orders are draining away at an increasingly faster pace; although neighboring countries and regions still don't have necessary conditions for undertaking the transition of China's textile clothing industry, deep adjustment of China's textile industry is urgently needed.
Wang Tiankai, chairman of China National Textile and Apparel Council, said that for more than a year, production, sales, and profit of the textile industry had experienced significant challenges, and the textile industry was currently undergoing the pain of reform and upgrading.
Since September 2012, with the steady growth of domestic demand, the adjustment of enterprises' commercial stock and the decrease of the base number of the same period of last year, growth of key economic index of the textile industry have gone up; however, the price difference between that in China and abroad keeps widening, the international market remains anemic, and the foundation for the recovery of the industry is not solid.
"Facing with difficulties, textile clothing enterprises should develop confidence in the domestic market. As people are having higher requirements for consumption, clothing consumption that is shouldered by the textile clothing industry should improve accordingly", said Wang Tiankai.
Judging from the actual development conditions of China's textile industry, competitive large enterprises remain in the minority. For medium- and small-sized enterprises that constitute the main body of the industry, their relatively simple order-based production and processing are facing some difficulties. To extricate from their predicament, they need to make greater efforts to be more focus, and improve their product quality and competitiveness.
"Some time ago, we carried out a survey in neighboring countries and regions and found that these countries and regions still don't have the necessary conditions to undertake the large-scale transition of China's textile industry. There are still opportunities for China's medium and small textile enterprises", said Wang Tiankai.
Be well prepared, and expand the domestic market
To find proper solutions, enterprises should first understand the pulse of the market. For export-oriented textile enterprises, it is absolutely necessary for them to understand the market before they go into the domestic market
As foreign trade remains depressed at present, "treasure hunting" in the domestic market is becoming a new prospect for textile enterprises. Wang Tiankai points out that in recent years, the structural adjustment and reform and upgrading of the textile industry has pressed forwards steadily, and the severity of exterior conditions has somewhat accelerated the adjustment and upgrading process.
According to statistics, from January to October 2012, China's above-quota retail sales of apparel, shoes, hats, and textile products increased by 17.9 percent year on year, 6.2 percentage points lower than the growth rate of the same period of last year, 3.3 percentage points higher than that of the first quarter, and 1.0 percentage point higher than that of the first half of the year. Apart from the price factor, retail of clothing products increased by 14.1 percent, 5.6 percentage points lower than the same period of last year, 3.5 percentage points and 1.0 percentage point higher than that of the first quarter and the first half of the year respectively. In October, clothing sales of the top 100 department stores in China increased by 14.2 percent, 2.1 percentage points higher than that of the same period of last year. At present, the growth of the domestic market of the textile industry has basically remained stable.
"Regarding the problems that export-oriented textile enterprises come across when they are transiting to the domestic market, I think that enterprises should first understand the pulse of the market so as to find proper solutions", said Wang Tiankai. For a long time in the past, most of China's export-oriented textile enterprises had been accustomed to order-based production, without paying much thought to the conditions of the market; as long as they finished the orders in time, business went on. Now, as enterprises are transiting to the domestic market, they really need to get to understand the market first.
Brand support, rich content
Brand building is a dynamic process. On the basis of attaching importance to the cultural content of the brand, the textile industry requires brand managers to make adjustment according to the dynamic process of consumers' varying needs.
Currently, brand building of textile industry has made noticeable achievements in the home textile sector and the apparel sector. According to the results of the 2010-2011 China Apparel and Home Textile Brands Survey, self-owned brands that account for 4 percent of the industry achieved 14.8 percent of the sales value of the clothing market, with an average profit rate of 10.1 percent, markedly higher than the 6.2 percent profit of China's above-scale clothing enterprises. From the perspective of the clothing industry, there are currently more than 2,000 active brands (in major cities in China, excluding specialized markets), 87 Chinese Top Brands, and 262 national well-known brands; in terms of sales revenue, premium brands that account for only 1 percent achieve 31 percent of the sales of above-scale enterprises; in terms of total profit, the 1 percent premium brands achieve 49 percent of above-scale enterprises.
Experts suggest that brand building is a dynamic process. On the basis of attaching importance to the cultural content of the brand, the textile industry requires brand managers to make adjustment according to the dynamic process of consumers' varying needs.
The textile industry has always valued technology innovation highly. In a time of distress, innovation is particularly important. In the 2012 "Textile Vision" Technology Education Awarding Conference held recently, the importance of industrial innovation was demonstrated once again. By now, the event has given rewards to 713 science awards and 372 educational achievement awards. These achievements have made important contributions to the structural adjustment of the textile industry.
