Market Dynamics: Clothing Domestic Or Foreign Trade Orders Finally Ushered In The Outbreak

Market dynamics: clothing domestic or foreign trade orders finally ushered in the outbreak

The outbreak of the epidemic makes the clothing industry a disaster area, especially the clothing export demand to the freezing point. In the second half of the year, although the new crown epidemic is still spreading around the world, China's textile and clothing exports have greatly improved.

During the 8-day holiday, I sell about two months

"During the Spring Festival this year, affected by the epidemic situation, many people were unable to go out shopping, and they mostly bought clothes through online shopping. It's too late for people to go out for a long time In a foreign trade clothing store less than 30 square meters in Taidong, the boss sun Xiaozheng is helping customers choose new winter clothes. To her surprise, the clothing sales of this year's 11 long holiday is no less than that of last year.

In the first half of the year, sun Xiao's store business can be described as "bleak", which can only be achieved through online stores. "In July, I felt that the offline purchasing power of consumers was gradually coming back. I had a premonition that the National Day holiday would usher in the shopping season as usual, so I started to enter autumn and winter clothing in advance." Sun Xiao told reporters that since October 1, her shop was full of customers during its business hours. She had already closed the store at 9:00 p.m., extending the business hours by half an hour. "In terms of the sales volume of offline stores, the sales volume of one holiday day is equivalent to the sales volume of a week in August and September. I have roughly estimated that I will sell about two months during the eight days of holiday." Sun Xiao said that as a self-employed merchant, she hopes that after the long holiday, the purchasing power of the public will also be steadily improved compared with previous years.

02. Foreigners are going to celebrate the festival

Deng was relieved in July when he ran a foreign trade clothing factory in Panyu, Guangzhou. "Orders began to come back, and the turnover for two consecutive months was twice that of the same period last year. In August, the production capacity was close to 300000 units, reaching 15% of the annual production capacity of last year." With the gradual stabilization of the epidemic situation in China, Deng's factories not only resumed their previous operations, but also "retaliatory" growth of orders, which even made workers a little busy. On the one hand, the gradual stabilization of China's epidemic situation resulted from the resumption of supply chain operation in many factories after June, which meant that orders could be renewed; On the other hand, it is the demand of overseas market. Although the epidemic situation is serious, the overseas consumer market is still operating. As the traditional peak season of European and American markets in September, the purchase of Thanksgiving and Christmas materials brings a large number of orders, especially the online demand. As a supplier of foreign fast fashion and e-commerce brands, Deng's customers include ASOs, quiz, showpo, missguide, etc., mainly for European and American markets and Australian markets. Its products include dresses and evening dresses. Last year, the sales volume reached 14 million US dollars.

Like most garment factories, Deng also prepared goods at the beginning of the year, but the sudden outbreak disrupted all the rhythm, making the factory almost stagnant during February to May. "Last year's orders were cancelled, and the goods we made were not allowed to go. During that period, the turnover decreased by 95%, and the future direction (how) is unknown." Deng said.

Clearing up the overstocked inventory has become the first step for them to save themselves

To this end, during the outbreak, clearing as much of the backlog as possible has become their first step in self-help.

In order to clear the inventory, most of the exporters will sell the goods at a low price. The cost of a small life style dress is about 60-100 yuan. The factory reduces the price by half and sells at a loss. Out of the "cash crisis", Deng said it was only a matter of money. However, such a practice once led to price war in the industry. However, the domestic market's digestion capacity was relatively limited, and it was not easy to clear the warehouse in a short time. While trying to clear the inventory, they will also use more online channels. Deng's observation found that some of the peers who still used the traditional mode of offline goods were eliminated in this epidemic. However, during the epidemic period, from the response of online channels including Alibaba and other e-commerce platforms, foreign trade procurement demand still existed.

04. Adjust the proportion of offline and online sales

Deng's factory began to adjust the proportion of online and offline sales the previous year. By the end of last year, the online channel had contributed 90% of its revenue. In the past few months, the company has increased its efforts to tap customers online, and increased its investment in online channels, including increasing the promotion costs on Alibaba platform, and invited some professional teams to help optimize the company's website, so as to facilitate orders on the Google search engine connection.

With the help of new live shows, it can be considered effective to obtain customers. (image source: Alibaba) in early September, Deng's factory attended the Alibaba international station procurement Festival, trying to show the original design products to overseas markets through live shows and other means, and also hoped to obtain new customers. Live show has gained a lot of attention. Data from Alibaba international station shows that the number of live viewers during the peak period was as high as 20000, the number of inquiries and click through rate increased by 300%, and about 70% in September. Deng told interface news that the company's inquiries have increased by at least 50% to 200% compared with the previous one. Although no orders have been closed, he believes that it will provide some help for the follow-up development. "Because the epidemic will change the purchasing mode permanently, the offline market may have a long time to recover, and after the epidemic, the share of online procurement and sales will continue to increase." Deng said.

Facing the fragmentation of orders, factories are constantly optimizing their supply chain. (source: Deng richao)

05. Improve the ability of "small single quick response"

However, more "touch the net" also means higher requirements for the supply chain.

In recent years, consumption upgrading has brought about decentralized and personalized market demand, which has gradually changed the "big goods supply" mode of clothing supply chain. Deng revealed that in the post epidemic era, this mode will gradually become history, and orders will become more and more fragmented, which has a huge impact on the supply chain, which is reflected in the smaller order size, lower purchase unit price and faster delivery speed, but the manufacturers have to control the cost. This means that if the factory does not optimize its own supply chain, it can not find a balance in such contradictions.

For ultra fast fashion brands, there are strict requirements for quick response in the supply chain. The process from proofing to production is usually shortened by 7 days, which is 7 days less than Zara's fastest time. The product performance of e-commerce brands is also faster and the cost is lower. As a brand OEM and wholesale enterprises, Deng admitted that the pressure they were facing was not small. In addition, orders would be more fragmented, so they could only constantly find ways to improve the "small order quick response" ability.

On the one hand, the factory needs to predict the market demand trend according to the real-time sales data to help adjust the production strategy quickly; On the other hand, it is also necessary to accurately calculate the "smooth, flat and stagnant" items based on the real-time feedback of the sold out rate. The unsalable items will be cut off quickly, and the best-selling ones will be quickly tracked to ensure the supply. For the popular categories in the current season, the development of the next band can be added to improve the hit rate of the popular products.

In addition, Deng also mentioned that at present, in order to shorten the channel from the supply chain to the consumers, they have strengthened the links between the noodle suppliers, designers and logistics, so as to quickly organize flexible production.