Who Took The Profits Of Textile And Garment Enterprises?

With the increase of the prices of agricultural products such as vegetables and grain, China's textile and apparel products are becoming more and more popular.

However, even textiles

Textile enterprises: rising production costs and sluice and power restriction

Since 2010, cotton prices have been soaring all over the world.

In the face of soaring cotton prices, the impact is mainly on export oriented fabric enterprises and upstream cotton yarn production enterprises.

Among them, especially small cotton enterprises, which are the main raw materials, suffer the most serious impact and losses.

Rossi is the owner of a small textile enterprise in Fuzhou. He positioned his factory as a professional cotton producer.

For a long time, the products of all kinds of pure cotton fabrics produced by Rossi are mainly exported to India, Iran and other Middle East regions.

In October last year, his factory's business was very hot, the orders were quite sufficient, and the products were shipped away from the whole cabinet.

However, the subsequent rise in cotton prices caused him great losses.

In February 2011, Rossi quoted a customer for a velvet fabric for 22 yuan per metre.

However, from the time of the customer's order to May, the price of the fabric would be 24.5 yuan at the time of the cotton price.

But the customer still pays 22 yuan per meter according to the contract price.

In this way, Rossi's profits were lost.

Such losses can only be borne by the enterprises themselves.

As for raising prices, that is the next business issue that may be involved.

Cotton prices have been very volatile this year, triggering a surge in prices of raw materials.

This makes the price of all kinds of enterprise products on the textile industry chain such as grey cloth and fabric can not be stabilized.

In fact, the turbulence and instability of the market of textile products have seriously squeezed the profit margins that fabric companies did not have.

The situation faced by Rossi factory is only a microcosm of the situation of most small coastal textile enterprises.

It is understood that after the 2010 National Day, many small cotton yarn production enterprises or small fabric enterprises in Jiangsu and Zhejiang provinces have cut down production or even stopped production.

Even some large fabric enterprises or cotton yarn enterprises are more or less in a certain reduction situation.

Because the price of raw materials is so high that they can not afford it, and even if they clench their teeth and make grey cloth, it is difficult to sell them according to their expectations.

In order to cope with the unfavorable situation of cotton price rising, some textile enterprises originally producing pure cotton products began to choose chemical fibre instead of cotton.

However, for this reason, the price of chemical fiber materials has also been increased.

It is understood that polyester fiber, viscose and other fiber raw materials have risen to varying degrees this year.

But relatively speaking, the price rise of chemical fiber raw materials is far below the increase in cotton prices.

In addition, accompanied by the sharp rise in labor wages and the arrival of "labor shortage", it is also one of the reasons for the decline in profits of textile and garment enterprises, which are famous for their labor-intensive and low technology content.

In fact, after the Spring Festival of 2011, Chinese small and medium-sized clothing enterprises encountered an unprecedented recruitment problem.

This problem spread from the Pearl River Delta to the Yangtze River Delta, spreading from Beijing, Tianjin and Tangshan to the central and western regions.

Including a part of the textile and garment enterprises that have already moved westward, the traditional labor force exporting provinces and cities in the Midwest have also encountered the embarrassment of not being able to recruit workers.

The result of the "labor shortage" is that the textile and garment enterprises are going all the way through the eight immortals.

But all of them are directly linked to the economy in the final analysis.

For example, the increase of staff salaries is about 10% on average, and the old employees introduce new employees to 200 to 300 yuan reward.

As for the profits of textile and garment enterprises, the shortage of labor in spring will inevitably affect the harvest of enterprises in autumn.

Relative to the rising price of raw materials, textile and garment enterprises are responsible for the decline in profits.

At the beginning of the year 2010, the sluice restriction in some areas in order to achieve the goal of energy saving and emission reduction is very absurd.

In June 2010, the sudden implementation of the unit GDP electricity consumption for the new standard of energy conservation assessment made many local governments unprepared.

In fact, the original intention of the state to use new indicators is that electricity is controlled by the state.

However, this sudden new assessment method has led some local governments to invent new ways of "energy saving and emission reduction", to restrict power consumption, or even to directly cut off electricity.

To cope with the sluice restriction, textile and garment enterprises have to buy diesel generators in succession to maintain their normal production by themselves.

Li Helin is the boss of a textile factory. His business has been thriving because of his flexibility and honesty.

However, with the increasing frequency of power restriction, factories started to work badly, and once the order was not completed, he was very annoyed.

In desperation, he bought two medium-sized and domestic low-end diesel generators.

However, due to the long operation time, the quality of low-end diesel generators is not very stable.

Therefore, these two diesel generators often have some defects and their working conditions are very unsatisfactory.

In order to finish the order on time, Li Helin bought two YAMAHA generators.

In fact, the cost of using diesel generators to complete production is far too expensive.

Take Li Helin factory as an example, he uses diesel generators, and the production cost is 5000 to 6000 yuan per day.

However, the order signed cannot not be produced.

Even if you can't earn money, you have to do it in the long run. If the order is not completed, the next order will be hard to get.

In the mid and late 2010, thousands of officials in our country staged the farce of power restriction beside the meter.

Such simple, crude and ridiculous "sluice limit" directly affects the overall profit level of many industries, including the textile and garment industry.

At the same time, it also led to a sharp rise in prices, the decline in competitiveness of enterprises, the weakening of economic development and other drawbacks.

At present, the relevant departments of the state have explicitly halted the act of "sluice power restriction" because of energy conservation and emission reduction.

However, its "sequela" is still in the balance. It still affects the development of China's textile and garment industry.

Clothing enterprises: high price entry fees, a total of ultra-high logistics fees.

As a downstream garment chain, the impact caused by the rising cost of raw materials is far from expected.

According to the textile industry veteran analysis, brand clothing and textile products are generally listed in the shopping malls, the listing price is relatively high, there is enough profit space to cope with the increase in costs.

The upstream and downstream industry chains of brand enterprises are more extensive, which can offset part of the cost increase and have pricing power, so that the profits of enterprises can be guaranteed.

Therefore, the profit margins of retail terminals and brand manufacturers are basically not affected by the rising price of raw materials.

However, as the saying goes, "every family has a hard nut to crack".

The "hidden rules" of China's garment production enterprises, which are encountering the astronomical price, are even more absurd.

Consumers who have been shopping in foreign markets will most likely send out the same sigh that the price of textile and clothing products made in China is much lower than that in China.

What causes this abnormal phenomenon to happen? {page_break}

In the final analysis, the reason for this phenomenon can be traced back to the mid 90s of last century.

At that time, the retail industry in all parts of our country was basically in the monopoly of department stores.

The mode of operation is also basically the "submission" mode. From the textile and garment industry, the production enterprises give the products to the department stores. After the department stores sell the products with the enterprises, they get the profit return.

As most department stores are still the status of state-owned enterprises at that time, credit, funds and so on are relatively reassuring to the enterprises.

During the period of 1995 and 1996, the international retail giants Carrefour and WAL-MART entered China's market one after another.

They first buyout the goods in the hands of textile and garment enterprises, then turn to sellers and sell them to customers in a small price increase.

In this way, the price of enterprises has been kept down, and the textile and clothing products in foreign supermarkets are becoming cheaper and cheaper.

Low prices soon attracted Chinese people to come in like the tide.

By the end of the 90s, a large number of shopping malls in all parts of the country were losing money, and they had been closed down.

Foreign supermarkets soon occupy the advantage of channel, so China's textile and garment enterprises have lost all their dominance in product prices.

The pformation of the relationship between textile and garment enterprises and retailers has directly led to the emergence of increasingly expensive entry fees over the next few years.

In March 2011, Liu Yunlang, a Xi'an man, was acting after the sale of a well-known brand clothing.

I can't wait to go to a famous department store in Xi'an to negotiate sales.

The merchants of this mall received Liu Yunlang enthusiastically in the reception room. After a few greetings, they talked directly about the core issue of "entry fee".

In fact, the right amount of entry fee is a tacit agreement between the two sides in the process of entering the consumer market from the manufacturing enterprises to the consumer market.

However, Liu Yunlang was told that if he wanted to enter the field, he would have to pay 2000 yuan per square metre for his clothing.

At this point, Liu Yunlang himself estimated that the entry fee under this price is still profitable under the premise of guaranteed sales volume.

But then the other side told him that besides the entry fee, he had to pay some other fees.

First, the rebate of the mall is around 28%; the two is another 1% advertising fee; three is the shop Festival fee collected at a cost of 5000 yuan per year; four is management fees, training fees and so on.

In addition, clothing companies entering the department store also need to take part in activities such as how much they give away, how much they consume, how much they are reduced to one hundred, and two hundred when they are not regularly held by the mall.

In fact, such activities are a dilemma for garment manufacturers.

If you don't participate, you will not sell your clothing products.

If you join in, the profits of your own clothing products are gone.

Faced with such harsh conditions, Liu Yunlang hesitated.

He can not be sure that the sales profits of his brand clothing can "exceed" such a high "entry threshold".

However, seeing that almost all the well-known clothing brands in the city were included in the mall, Liu Yunlang hesitated again.

He is not sure how these brands can make profits after paying such a high entry fee.

It is understood that a large proportion of the brand clothing products sold in large department stores sell at a loss.

Some of them even sell meat in the blood and have already lost the bottom.

However, no matter how low the profits of garment manufacturers are, or how much money they have lost.

The profit of department stores is guaranteed by drought and flood.

The only way that textile and garment enterprises can take is to increase the price of products.

Insiders revealed that a price of tens of dollars of shirts in department stores are often priced at more than 1000 yuan.

In fact, the Chinese style "business geek" has become a gold absorbing black hole that encroachment the profits of textile and garment production enterprises and the exploitation of consumers' pockets.

In addition, the excessive logistics cost is also unknowingly eroding the original profit margins of textile and garment enterprises.

Geng Shuhai, deputy director of the State Economic and Trade Department of the national development and Reform Commission, pointed out at the 2011 China logistics development conference that the toll standards for expressways in China are too high, and all kinds of crossing fees have reached 1/3 of the cost of pportation enterprises.

In fact, if we add various kinds of fines, the cost of road pportation can account for more than 50% of the cost of the enterprise.

There is no doubt that the sky high entry fee and excess logistics cost of the department stores are another major factor that affects the profits of China's textile and garment enterprises and the rise of the retail prices of textile and garment products.

But what worries us is that the solution of these two problems can not be accomplished in two days in a day, because there are too many interests to be touched.

China's vast textile and garment enterprises also need to have psychological preparations for their long-term struggle.

Network direct selling: both advantages and disadvantages are feared.

In the face of the current situation of textile and clothing products' retail price, "one wave is over one wave", it can effectively evade a series of expenses such as sky price entry fees and so on, and reduce the intermediate links and reduce the selling price.

The vast majority of brand textile and garment production enterprises also set up online flagship stores and other windows, and began to do business directly with retail customers.

Miss Huang is a white-collar worker in a company. In recent years, she has gradually developed the habit of buying relatively cheap brand clothes on the Internet when she sees the price increase and sees no wage increase.

Every weekend, she would invite 32 friends to the brand clothing store.

Pick out the style you like, and try the size yourself.

Miss Huang will go home and turn on the computer to find the online store of the brand clothing.

Order exactly the same clothing products according to the fitting styles and sizes.

It is understood that the purchase of the same clothing products from the online store, including freight, will still be about 20% cheaper than the sale of the exclusive stores.

The advantage of online sales of brand clothing lies in the fact that enterprises have reduced some of the expenses they must pay in traditional retail channels.

And when the profits of enterprises do not decrease, the reduction of this part of the expenditure will benefit the vast number of consumers, and at the same time, it will also increase sales.

It can be said that it is a perfect win-win mode.

However, the complicated network world is also full of too many uncertainties.

Cottage brand textile and clothing products are no longer new. It is said that even now Shanzhai's sales websites of brand clothing enterprises have emerged one after another.

This does make it easy for ordinary consumers to be cheated.

At the same time, for the textile and apparel products sold through the Internet, the supervision of the relevant departments is very difficult, and the hidden danger of quality problems can not be ignored.

A consumer bought a T-shirt at a price of half of the retail price in a clothing store.

After getting the product, he found that the direction of the cuff edge of the T-shirt was reversed.

The cuffs that should have been locked to the inside were accidentally turned out from the inside.

So he asked the manufacturers to return the goods, but they were flatly rejected by the salesmen.

The reason is that the defective products are sold at half price, and they will not be sold back once they are sold.

Later, the consumer was at a very inconspicuous place in the shop, and found hints that the manufacturer marked the defective products.

In fact, such a situation is not a case.

It is understood that in 2010 China's textile and clothing quality complaints 60% from online sales of products.

How to manage the textile and apparel products directly online is still one of the directions that all functional departments should study.

Maintaining a certain profit margin is one of the fundamental safeguards for the healthy development of China's textile and garment industry.

But under the superposition of many subjective, objective, artificial or natural disadvantages.

The profit of China's textile and garment industry has been in a relatively low or even low profit level for a long time.

This situation will inevitably affect the whole industry's R & D and innovation input reduction, resulting in slow development of the industry and declining international competitiveness.

How to solve the puzzle of "missing" in China's textile and garment industry needs to be seriously studied and solved by all parties concerned in the industry.