The price of clothing fabrics has remained high since the beginning of this year, especially in the fourth quarter, when the price increased significantly. However, in the face of an increasingly competitive market, most clothing companies dare not increase prices and are unable to transmit the pressure of rising costs to the end sales market, facing the dilemma of being under pressure from both ends.
Fabrics have increased significantly, and clothing companies are under pressure from both ends
Cai Zhenxiong, the person in charge of a clothing fabric factory in Foshan, Guangdong, told reporters that this year has been the most stressful year since he started working in the industry, because since the end of last year, raw materials such as cotton yarn and various chemical fiber products, which account for the largest share of fabric production, have been rising. Like him, Fabric manufacturing companies are generally in a situation where profits have shrunk significantly or even suffered losses.
Cai Zhenxiong, general manager of a textile company in Foshan, Guangdong: At the beginning of this year, the price of cotton increased from 12,000 yuan per ton to 24,000 yuan per ton. The current purchase price remains high, about 22,000 yuan. The price of chemical fiber products has also increased significantly. This year’s chemical fiber products will probably increase by about 30% to 60%. This year, the overall fabric production industry will be more difficult to operate, and everyone may face losses.
The reporter visited a number of clothing companies and learned that clothing fabric prices were very stable in previous years, with few obvious fluctuations. However, since this year, especially from September to November, the various clothing fabrics they purchased have increased significantly. Although the increase has slowed down since December, the prices have remained high. Coupled with the multiple recurrences of the global epidemic this year and the local rebound of the domestic epidemic in many places, the uncertainty of market recovery has increased. In addition, factors such as rising international logistics costs and power rationing have also put great operating pressure on downstream garment manufacturing companies.
Zheng Wei, founder of a clothing company in Shenzhen: The most basic fabrics, such as single-sided fabrics and double-sided fabrics, have increased by 20%-25%. If the original gross profit margin is 40%, the increase in materials may result in a gross profit margin of 30%. about.
It is understood that competition in the clothing consumer market is fierce. In order to reduce inventory and increase capital turnover, clothing companies generally dare not increase prices, making it difficult to pass on the costs of upstream price increases to consumers. As a result, the pressure on the prices of cotton, cotton yarn and various chemical fiber products to rise this year will eventually be shared by upstream and downstream fabric factories, clothing companies and other parties.
Han Zhiqiang, chairman of a clothing company in Shenzhen: Due to industry competition, everyone generally did not raise prices. During the epidemic, inventory pressure was relatively high and everyone was discounting. If prices were to be raised suddenly, it would be difficult for consumers to accept.
Facing the complex market environment, apparel companies improve their supply chain’s rapid response capabilities
In the context of difficulty in raising prices at sales terminals, many clothing companies rely on big data and artificial intelligence technology to enhance the rapid response capabilities of the entire supply chain from production to sales, improve production efficiency, and reduce inventory, thereby resisting the impact of rising production costs. Huge operating pressure.
The person in charge of the logistics department of a clothing company in Shenzhen told reporters that his department can see the sales and inventory data of more than 100 stores across the country in real time through the digital supply chain management system. The logistics department will provide this data to the production department on the same day. The department then conducts flexible production according to market demand. In the past, market sales data mainly relied on manual statistics, and the information lagged behind due to long cycles, which could easily lead to inventory backlogs.
During the visit, the reporter found that some clothing companies have introduced intelligent manufacturing in production to compress the production cycle, improve efficiency, and resist rising production costs. In the production department of another Shenzhen garment company, the reporter saw that the automatic cutting machine immediately cut the fabric after reading the production information on the fabric. The cut fabric was automatically transferred to the work station through the hanging system, and the workers displayed it on the screen. The production process can be produced. It is understood that in the past, workers were required to receive technical training for each style of clothing produced. Now, through screen production technology, workers can easily produce different styles of clothing.
Traditional supply chains have always had pain points of large-scale production, slow response, and high manufacturing costs, which can easily lead to inventory backlogs. The price of raw materials has increased this year, the supply cycle of some fabrics has been extended, and coupled with the impact of the epidemic, the market environment of the apparel industry has become more complex and changeable. some services��Enterprises rely on big data to integrate sales, production, design, warehousing logistics, procurement and other aspects, establish an information sharing system, greatly improve the response speed of the supply chain, realize the transformation from extensive management to refined management, and effectively reduce operating costs.
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