Canton Fair: A rebound in overseas apparel orders or labor shortages next year

“First Financial Daily” reporter learned from the Canton Fair and learned that overseas apparel orders have dropped sharply this year, and industry insiders have determined that a wave of orders will rebound after the Spring Festival. When a large number of suspension companies temporarily “restart”, they may cause a wave of labor shortages. False prosperity.

Yesterday was the first day of the opening of the third session of the 110th Canton Fair. Garment companies are a major focus of this issue. Many apparel export companies interviewed by this newspaper have said that this year's garment industry's export orders have shrunk sharply, and many companies have no orders.

Liang Yongsheng, manager of Jiangsu Henghong International Group Nanjing Ouheng Garments Co., Ltd., told the “First Financial Daily” that starting last year, the price of fabrics used to make garments was approaching 40%, which greatly increased the production cost of garments. Due to the impact of the debt crisis in Europe and the United States, the European and American markets have become sluggish. Many European and American buyers have lowered their expectations for the future market, and have compressed their purchases in the presence of stocks.

Jiangsu Xiaotian (600287) Co., Ltd. [Jiangsu Haotian, (600287. SH)] deputy general manager Cao Xiaojian also told reporters that due to the European debt crisis and other factors, so far, the apparel industry's orders have plummeted. “The current situation is very bad, because the buyers are mainly digesting the previous inventory this year. At present, the inventory is digested almost, but because of the cautious and pessimistic economic situation in the next year, the demand is certainly not prosperous.”

In the case of a significant reduction in orders, buyers also abandoned the original development of small and medium-sized suppliers, and concentrated their orders on several powerful companies that could provide them with supply guarantees. "Buyers dare not hand over the list to small and medium suppliers, because once these owners run away, they can't pay the goods. That would be even more troublesome," Cao Xiaojian said.

In this case, the phenomenon of bankruptcy will continue. "At least one-fifth to two-fifths of the garment manufacturers can no longer continue this year." Cao Xiaojian said, now many requests are made every day for orders. The phone or fax, or someone to talk directly.

However, Liang Yongsheng did not completely lose confidence in the future. He said that clothing, as a necessities of life, is subject to seasonal changes in April, May, and December each year according to the European consumer habits. If buyers reduce their purchases this year, they will replenish next year, so they may usher in one. Busy season orders.

Cao Xiaojian, who has been engaged in foreign trade for several decades, believes that demand will definitely not be strong next year. However, due to the fact that the previous orders have been reduced too much to support the most basic sales of European and American customers, there is bound to be a rebound of orders after the Spring Festival.

However, this kind of order season may not be good news for apparel companies. According to Cao Xiaojian, many factories in China are currently under-employed. Once the information is sent to the domestic market, many factories will raise salaries to solicit workers. Many fabric factories, including garment factories, will increase their prices as orders increase, and prices will increase. Damage to the back orders, resulting in a new wave of prosperity and illusion, including labor shortage and so on.

In this regard, Hao Tian's strategy is that at present, as long as there are orders to pick up. Then grab the first wave of compensation after the Spring Festival and give up the second and third waves of compensation. "Because the domestic raw materials must have risen by that time, it is the peak period of traditional clothing production."

While the effective orders are insufficient, the profits of clothing production have also been greatly impacted. According to customs data, from January to September this year, the cumulative export value of clothing and clothing accessories in China was US$115.23 billion, which was an increase of 23.3% over the same period of last year. However, the number of clothing exports has barely increased. From January to August this year, China's actual number of garments exported was 19.622 billion, an increase of only 1.8% year-on-year. Therefore, after deducting the exchange rate appreciation, rising costs of raw materials and labor, etc., the profit margin of apparel export enterprises has become very narrow.

"In 2008, we shouted "The wolf has come," and now "wolf" really came." Liang Yongsheng said.

The Guangzhou Ruigao Garment Co., Ltd., which operates jeanswear, mainly exports to the European market. Its general manager Chen Yudong looks more conservative and pessimistic than the 2008 landscape of the garment export industry this year and even the next 2 to 3 years.

Chen Yudong believes that in the next two to three years, the total foreign trade volume of the garment export industry will be in a downward trend. In order to reduce losses in order to reduce losses in Europe, Chen Yudong began to take the “domestic sales” step. At present, they are already working for Jack Jones and other major brands in China; on the other hand, they also increase their own research and development, according to Chen Yudong’s introduction. Each year, they will invest 4% to 5% of their own sales to conduct research and development of their own brands, in order to get rid of dependence on external customers as soon as possible, and take the initiative.