“The road that is difficult to take is to persist.†Zhang Xinmin said that enterprises must have patience and the accumulation of brand influence requires long-term investment and management. The famous foreign textile and apparel brands are all hundred-year-old. Ding Hai and Zhang Shijun also believe that companies cannot pursue their immediate interests to abandon brand building and lose their competitive seats in the future market.
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“China's textile and apparel exports have officially entered an inflection point and entered the adjustment period.†At the East China Import and Export Trade Summit held on the theme of “Exploration of the textile and apparel supply side under the new pattern†held at the China Fair, the China Textile Import & Export Chamber of Commerce President Zhang Xinmin pointed out that following the 4.9% fall in textile and apparel exports in 2015, it continued to decline in 2016, and the decline was widened to 5.9%. "This is the first time in two decades that China's textile and apparel exports have dropped for the first time in two years, and the decline has been increasing year by year."
He said that while China's textile industry is experiencing overcapacity, along with the rapid rise in costs, in the absence of market demand, companies must increase efforts to open up overseas markets, carry out product upgrades, and build brands and marketing. "This is the direction for the textile industry to carry out structural reforms on the supply side."
Enterprises "going out" should not only look at local preferential policies
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“Spring Plumbing Duck Prophetâ€, companies are most sensitive to changes in the external environment. Zhang Shijun, general manager of Shanghai Textile Group (Latin America) Co., Ltd., believes that the three “changes and changes†of his company reflect the status quo of many foreign trade companies: “The income has grown steadily but the profits have not increased synchronously; With the increase in the number of foreigners, the total number of overseas customers has decreased but the amount of purchases by individual customers has increased.†He stressed that foreign trade companies “have to prepare for years of hardships†while actively seeking to transform their business and ensure that they have good cash flow. It is necessary to strengthen the integration of industry and finance and use capital leverage appropriately for financing.
With the current increase in the cost of labor, land resources and other factors of production, the environmental carrying capacity has been difficult to support the rapid expansion of the scale of enterprises, the traditional advantages of low-cost manufacturing have been significantly weakened, and the pressure on exports of light industry, textiles and clothing products is even more pronounced. At present, many foreign trade companies are attracted by local preferential policies and low labor costs and choose to set up factories in Southeast Asia. Ding Hai, the person in charge of Jiangsu Huihong International Group, has his own ideas. He believes that overseas preferential policies should not be the main consideration for enterprises to “go globalâ€. "Even if the land has benefits, some companies have to face some local environmental protection and taxation policies." Zhang Shijun also cited an example: A Chinese-funded enterprise had delayed the construction period due to the government's request for proper arrangements for animal relocation. In the past two months, this "accidental factor" eventually led companies to increase their capital investment and cost a lot of time.
"The key is to cultivate their own core competitiveness and increase their added value through innovation," said Ding Hai. Since last year, Jiangsu Huihong International Group has expanded its “Internet + Services†business to provide on-site proofing, model display and other services for customers far away in South America through VR technology, and completed orders for US$10 million last year. Shanghai Huashen Import and Export Corporation, which continued to expand its RFID technology project this year, has also transformed into a big data operator. It helps hotel management directly trace product usage and inventory by implanting chips for hotel linen.
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Brand building depends on long-term management
Another important topic at the summit was the brand discourse of Chinese companies. The traditional textile companies are relatively lack of talents and financial strength, lack the ability to create their own brands and overseas marketing channels, and their voice and competitive bargaining power are controlled by foreign parties. Although branding has been proposed for many years, there are not many companies that can try to succeed, and more companies can hardly stick to it.
“The road that is difficult to take is to persist.†Zhang Xinmin said that enterprises must have patience and the accumulation of brand influence requires long-term investment and management. The famous foreign textile and apparel brands are all hundred-year-old. Ding Hai and Zhang Shijun also believe that companies cannot pursue their immediate interests to abandon brand building and lose their competitive seats in the future trade market.
Jiangsu Taiyikai Electrical Appliance Co., Ltd. has spent 50 million yuan annually for brand research, and its self-developed housekeeping robot products have successfully helped the company survive the financial crisis. At present, the products developed by Taiyi Kai occupy more than 90% of domestic “smart cleaning robots†and have established sales networks in many countries.
We must seize the opportunity of the "Belt and Road Initiative"
Last year, China’s textile and apparel exports to major markets all fell. In the EU, China’s textile and apparel industry’s exports to the EU amounted to US$49.5 billion, a decrease of 6.8%, which was the second consecutive year of decline. The United States, China’s largest export market for textiles and apparel, also fell for the first time in 20 years in 2016, with exports valued at US$45.02 billion, a decrease of 5.7%, and textiles and apparel decreased by 2.5% and 6.8% respectively. Exports to ASEAN continued to decline in 2016, with exports at US$33.36 billion, down by 6.9%, of which textile exports increased by 1.9% and apparel declined by 23.9%. Zhang Xinmin pointed out that emerging markets such as Brazil and South Africa also performed poorly due to factors such as economic decline and currency devaluation.
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He believes that in traditional markets and emerging markets, trade protectionism is rising in many countries. Shen Weihua, deputy director of the Municipal Commission of Commerce, also stated that “China is not only one of the countries with the highest number of anti-dumping investigations in the world, but more and more countries are using non-tariff trade barriers such as technical barriers, environmental barriers, and intellectual property rights barriers to export goods to China. Limits."
However, under various adverse conditions, the “One Belt and One Road†is gradually becoming a new hot spot in foreign trade. In 2016, cumulative exports to the countries along the “Belt and Road†route totaled 89.15 billion U.S. dollars, accounting for 33.4% of total exports. Among them, exports to half of the countries achieved growth, mainly in Central and Eastern Europe, West Asia, North Africa, ASEAN, and Ukraine, Belarus and other countries. Exports to Kyrgyzstan soared to 52.3%, of which apparel exports increased by 76.2%, thanks to the improvement of the economic situation in Kyrgyzstan and the geographical advantages adjacent to Xinjiang. "The enterprises that go out should be active in the 'Belt and Road' countries and seize new opportunities for growth in foreign trade." Zhang Xinmin said.
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