Clothing Enterprises: No Worries About Orders, Worries And Profits

In 2011, the price of all kinds of clothing increased with the increase of raw materials and labor costs. And the price increase is close to 20% and 30%. For a while, clothing prices have become a concern.

At the beginning of the year, the promotion price of listed brand clothing was between 10% and 15%, driven by various factors such as raw materials and manpower cost. Sports clothing has clearly disclosed the price range. In the third quarter of 2011, XTEP and PEAK indicated that the price of clothing products increased by 10% and 5% to 10% respectively this year in the 2011 quarter of the year. In 2011, the order clothing will increase by about 8%.

Is there any effect? How big is the impact?

According to a survey released recently by the China Textile Industry Association, 29 garment enterprises surveyed indicated that orders were full, and orders for individual enterprises had been in the 6~7 month. For the pressure of raw materials and manpower rising, 35% of the respondents said they had a greater impact, but they could bear it. 64% of the enterprises showed little effect.

Lack of profit for processing enterprises

Clothing factory prices rose little and retail prices rose. At the 2011 China (Ji'nan) International Textile and Garment Fair, the head of a clothing company called it wrongly: "the ex factory price of our products is actually less than 10%, and there are too many problems in circulation." Yang Jun, Deputy Secretary General of China Textile Industry Association, said that China has already become the first choice for textile and apparel transnational procurement, but at present, domestic enterprises only occupy the process of manufacturing in the industrial chain.

Insiders analyze why this happens. Mainly because: last year, cotton purchase price soared, reaching 33 thousand yuan per ton. In the second half of this year, the purchase price has dropped, and the highest has fallen by four or five. However, many textile enterprises are mostly high priced cotton bought in the first half of last year or the first half of this year. Inventory digestion and price reduction need a period of time, plus labor costs and raw material prices have greatly improved, and the cost of intermediate circulation links has increased.

Clothing enterprises: no worries about orders, worries and profits

The price of raw materials is high and the appreciation of RMB is constantly increasing, so that the garment companies are having a hard time. The price hike of products is far less than the increase of costs. The profits of enterprises have not improved, but have become increasingly thin. Without worrying about the profits from orders, China's labor intensive clothing export enterprises are facing the painful process of Phoenix's nirvana.

The report said that in 2010, China's labor costs increased and prices rose. China's factories shifted their focus to the domestic market and expanded domestic demand. China is no longer a paradise for subcontracting. As a supplement to China's orders, textile and garment buyers have shifted some European orders to Bangladesh, Pakistan, Laos and Indonesia. But the production capacity and quality of these countries can not be the same as that of China, and their role can not take the place of China. Moreover, some countries do not have raw materials, such as Bangladesh, there is no cotton. The five countries of Maghreb, closer to Europe (Libya, Algeria, Mauritania, Morocco and Tunisia), despite their short delivery dates, quality assurance, quick response and fashion, are politically unstable and unable or rarely able to undertake the upstream production of the textile industry. The transformation of Arabia countries has made the employer turn to Turkey. The textile industry of this country is complete, which is the market where the employer has entered the market, but there is a danger of market saturation. The areas currently available for promotion are Eastern European countries, which can recover orders from some Mediterranean and other countries.

Even though the price of branded clothing is rising, the days of downstream garment processing enterprises are still very sad, because the price increase can not completely digest the cost of raw materials and labor force rising, because their processing enterprises raise the price of brand processing is negligible.