The Growth Rate Of China's Clothing Industry Has Declined, And The Readjusted Adjustment Is Imminent.

China in the first quarter of 2012 Garment industry All Operation index The increase is all in Slide downward Individual indicators even appear negative growth. What does this imply?

It is said that 2012 is even colder than the 2008 financial crisis. When that time, the country took out 4 trillion yuan to rescue the market, and in the very short time, it introduced ten industry adjustment and revitalization plans and matched numerous investment projects. This year, we are afraid to face the difficulties of demand, supply and so on.

　　 It is easy to see from the macro data to the micro level.

Domestic demand is the primary driving force for the growth of the garment industry in the future, and it will shine brightly after the economic downturn. In the next 5 years, the domestic demand dividends will be released, and the more open the domestic demand is, the faster the industry will change.

Behind the export cost advantage depletion and order transfer, there is an opportunity for industrial transformation and upgrading. If we grasp the new positioning of 7.01,0.00,0.00% in the international industrial chain and the division of value chain, the future export will subvert the traditional meaning and become the interest segmentation that participates in and even dominates the international apparel industry chain.

From the increase in output and investment growth, the industry decline is temporary. It is also inevitable or necessary in the process of industrial adjustment. As before the start, it will be the main theme of the industry in the future.

The benefits will fall down in the industrial consolidation period of weak demand and supply adjustment. It seems easy to understand and accept. But when the economy is gradually recovering and the demand is getting warmer, the rebound of efficiency will depend on the internal forces accumulated during this period. After all, we will face more intense competition and stronger competitors. The industry must take care of the future and prepare for the future rather than waiting for the world to turn around.

The economic cycle is not horrible. What's terrible is that it can't move on the occasion. If the height of the industry is compared to the potential energy, then the transformation and upgrading based on technological progress and brand innovation is the kinetic energy. If we take the right direction, we can transform kinetic energy into potential energy and let the industry go to a new height.

Sustainable profitability depends on the intrinsic quality of the industry, rather than a temporary loss and momentum. In the long run, we need to constantly improve the quality of every industry element.

　　 Domestic demand

Core thinking: the growth rate of domestic clothing consumption has dropped significantly. Is the "Optimus Prime" of the future industrial economy strong?

　　 Post market Proverbs: in the next 5 years, the "domestic demand bonus" will be released. Overseas brands have seen this opportunity to accelerate the pace of entering China. If Chinese brands still lie in the present environmental background and the achievements they have made, the change of the rules of the game will inevitably turn the "good cards" into "rotten cards".

Sales losses in the first quarter will increase by 3 months.

According to the statistics of the National Bureau of statistics, in the first quarter of 2012, the total retail sales of consumer goods in the whole country amounted to 49319 billion yuan, up by 14.8% compared with nominal growth (10.9% in real terms after deducting price factors). Among them, the retail sales of Enterprises above Designated Size (unit) amounted to 22921 billion yuan, an increase of 15.6% over the previous year, and the retail sales of clothing commodities increased by 240 billion 900 million yuan, an increase of 14.6% over the same period last year, accounting for 10.51% of the total retail sales of Enterprises above designated size.

Growth of consumer goods and clothing consumption in 2011~2012

The growth rate of clothing retail sales in January and February was once "worrying", which was lower than that of the total retail sales of consumer goods. Although the domestic demand of clothing was constrained by the relatively low domestic demand trend, the decline of clothing consumption in 1~2 could be basically attributed to seasonal factors. First, it was the early spring festival, followed by the cold season before the Spring Festival and the cold spell after the Spring Festival, which inhibited the consumption of two seasons in winter and spring. {page_break}

In March and April, the monthly consumption growth rate exceeded 19%, and the sales volume exceeded the total retail sales of consumer goods by about 5 percentage points in a single month. It can be said that the growth rate of clothing consumption has gradually returned to normal, but the sales volume in the Spring Festival season always accounts for a relatively high proportion of the total annual sales volume. The loss of sales in this quarter may take more than 3 months to make up for it.

According to the sales data of 3000 retail enterprises monitored by the Ministry of Commerce, the consumption of clothing and clothing grew slowly in the first quarter of 2012, and the sales volume of large retail enterprises increased by 8.53% in 1~3 months.

　 The trend of large retail and apparel retail sales is the same.

According to the statistics of the China National Business Information Center, in the first quarter of 2012, the major retail enterprises in the country achieved an increase of 8.53% in clothing retail sales year-on-year, and the growth rate was 16.82 percentage points lower than that in the same period in 2011.

From the perspective of clothing sales in March, sales grew faster than in 1~2, retail sales increased by 14.45%, and retail sales of all kinds of clothing increased by 1.12% over the same period last year. The consumption situation of large retail channels is basically the same as that of clothing retail sales.

　 The reverse trend between PPI and CPI will not last long.

According to the National Bureau of statistics, the clothing price index rose to 103.4 in 1~3, and the clothing consumer price index rose to 103.6. In March, clothing prices increased by 3.8% in one month. In March, the producer price of clothing manufacturers increased by 2.6% in the same month. Compared with February's year-on-year rise of 3.1%, it has dropped.

The reverse trend of PPI and CPI can not last for a long time, and we have reason to believe that the possibility of PPI returning to CPI's rising road is very small. We can see that the rise of CPI has been suppressed.

　 The deeper the domestic demand is, the faster the industry will change.

The "domestic demand dividends" that have accumulated for many years will soon be released. First of all, the people have gradually approached the changing order of consumption habits. Secondly, the acceleration of urbanization and the increase of population circulation will bring huge consumption potential. Third, after 80 years or even 90% of the new trend of thought is gradually becoming the dominant consumer market, it is bound to change the consumption pattern and pattern. Fourth, China has become faster than expected, and the opening of the market will inevitably drive the market forward. The fear of "wolf coming" now finds that the advantages of the garment industry are greater than disadvantages. Any highly market-oriented industry will not die faster with the deepening of opening up, but the faster the better the transformation and development.

When the "domestic demand dividend" is released, there will be many brands being overturned by this flood of different past. After all, China's brand development has just started, excluding some "Chinese time-honored brands", and the most senior brand in the clothing industry is probably still in its infancy.

　　 "Inventory vortex" see brand strategy childish

In 2011, the overwhelming majority of brands were plunged into the "inventory vortex". Digging the root of this inventory crisis, we could see the naive nature of China's clothing brand.

The lack of brand development strategy and arbitrarily are the common faults of Chinese clothing brands. The most direct expression is the random price increase in 2011. "Cotton", which is far away from the terminal and accounts for relatively low cost of finished products, will come to the retail terminal price up to 20%. This "short-sighted behavior" is just like suicide for many vulnerable brands in the market.

The lack of market analysis and prediction is the second common problem. Market forecasting is short of means and experience. Of course, experience is often more effective than technical means. Unfortunately, experienced people are really rare, and the dependence of enterprises on "experience" has reached an irreplaceable level.

The lack of market resilience is the third common problem. Resilience comes from the scientific and effective operation mode, the application of technology, the scale, the relationship with suppliers and customers, the quality and efficiency of people, etc. Some enterprises call themselves "fast brands", but they are not fast enough to operate, or the cost of "fast" is very high. {page_break}

　 The probability of consumers buying satisfactory products decreases.

Stimulating domestic demand has little effect, aside from the social security system emphasized by the economic school, and looking at people who have no worries, they have incredible consumer demand, but are blocked by a solid dam and difficult to translate into real demand because they can not get the right goods at the right place at the right place.

The rise of China's supermarket industry has changed the consumption habits of urban residents. When the product, the place of sale and the consumers have formed a virtuous circle, their mutual motivating role has been continuously strengthened. However, the process that clothing products arrive at the sales place and then passed to consumers is full of contradictions and problems. The cost of business is high, the logistics is not smooth, and the prices of commodities are unthinkable. The frequency and probability of consumers getting more and more mature goods do not seem to increase.

　 Export chapter

Core thinking: export decline has become normal for some time. Can the change of international industrial structure create new space?

Post market Proverbs: we still have expectations for the export of "foreign trade dividends" which have basically disappeared. We expect to rebuild the international competitiveness of Chinese clothing based on industrial transformation and upgrading, based on the upgrading of China's apparel industry in the international supply chain and value chain division of labor. Several issues need to be addressed in the short term.

　 Lessons learned after the March rebound

When the industry was still exulting in 2010 to quickly get out of the financial crisis and return to the fast growing road, the situation in 2011 turned steeply. It seems that overnight export orders began to shift to Southeast Asia, and poured cold water on the once heated domestic garment industry. This trend continues in 2012.

　 Monthly increase of garment export volume, amount and price in China

According to customs statistics, in the first quarter of 2012, China completed the export of clothing and accessories 29 billion 802 million US dollars, an increase of 4.71% over the same period, and 5 billion 974 million exports, down 3.64% from the same period last year. Among them, the export of knitted garments was US $13 billion 193 million, an increase of 8.07% over the same period last year, and the export volume was 4 billion 190 million, down 2.14% from the same period last year. The export of woven garments was US $11 billion 281 million, down 1.79% compared to the same period last year, and the export volume was 1 billion 784 million, down 7% from the same period last year. The average price of clothing exports in the first quarter of 2012 was US $4.1 per piece, an increase of 7.33% over the same period in 2011, an increase of 12 percentage points from the same period last year. Clothing exports account for 57.79% of textile exports, up 0.71 percentage points from the same period in 2011.

From the monthly export situation, similar to the domestic market situation, the losses caused by the fall in January and February will take several months to make up for the losses. In March, export volume and value rebounded together, and we saw some hope. However, the resilience of March was not satisfactory, and the early warning of the downturn in March 2011 has made us cautious and optimistic about the future.

　 Can domestic demand be compensated for the loss of external demand?

Whether the loss caused by external demand to the industry can be made up by domestic demand may be a paradox in itself. Perhaps we need a slowdown or even a decline of ice to cool down industries that have developed rapidly or even barbarely for 10 years, and calmly consider how the future competitive advantage will be shaped. In the short term, domestic demand is not enough to fill the hole of export decline, but as long as the small size is moderate, it will filter out those enterprises with competitive strength and weak development potential. In the long run, domestic demand will become our focus.

　　 Control international supply and marketing channels in order transfer

The peak of order transfer occurred in the second half of 2011, and now it seems to have entered the normal distribution of easing and declining sectors. After all, the industry of competitive countries is just beginning and unable to undertake too much capacity. At present, the production efficiency of conventional products such as trousers, skirts and shirts in Southeast Asia is only 50% less than that in the coastal areas of China. Although the labor cost is only 25 to 30% of the coastal areas, the cost of procurement, logistics and management has greatly increased the implicit investment. However, the progress rate of conventional products in these countries can not be ignored. It is estimated that in two or three years, the efficiency of conventional products will reach 70% to 80% of the coastal areas in China, which is the same as that of China's inland provinces. The second wave order transfer will also start again at that time, that is, the more complex and conventional products such as suits and jackets will be lifted. {page_break}

Market share of major national clothing in the US in 2011

There is no need to panic. Despite the sharp increase in exports of clothing to the US, imports from the United States still account for more than 35% of the total value of clothing from abroad and 20 percentage points higher than that of Vietnam. Instead of being deprived of its share in panic, it is better to rationally give up the part to be made in transition and get another part that should be obtained. To put it bluntly, we must invest a great deal of cost in the short term to create and control the international supply and marketing channels, and become the buyers and the sellers.

Is it necessary to grab the lost export market?

There is no point in relying on factor cost and price to take back orders from low competition. It is nothing but the use of Chinese resources to make overseas consumers enjoy.

For emerging markets, we must try our best to embark on the branding development path. We can not serve the developed countries with a very low return, and then serve the developing countries. If so, we might as well invest these resources into other industries that can create value.

　　 Output chapter

Core thinking: output remains basically at a low level. How will future growth momentum and growth pattern change?

Post market Proverbs: it is estimated that the annual production will remain stable and low level. In order to eliminate the abnormal factors of the Spring Festival, the garment industry will basically inhibit the growth of "sudden" decline, increase the concentration of production, and it is more common for large enterprises to cooperate with each other.

　　 The central and western provinces and Northeast China have strong growth momentum.

In the first quarter of 2012, the top five provinces of clothing production in China were Guangdong, Jiangsu, Fujian, Zhejiang and Shandong. The total output of five provinces accounted for 73.43% of the total output of the country, down 4.54 percentage points from the same period last year. The two provinces of Shandong and Fujian grew steadily, representing an increase of 20.43% and 18.17% respectively over the same period, and two of Jiangsu and Zhejiang declined slightly, down 0.46% and 2.75% compared with the same period last year. The Guangdong province's production declined significantly, down 11.42% from the same period last year.

　 Output of top 15 provinces and cities in the first quarter of 2012

The eastern region's growth slowed down, up only 4.40% from the same period last year, and the growth momentum of the central and western regions and the three northeastern provinces was strong. The output increased by 21.92%, 40.08% and 31.14% respectively. The proportion of Eastern, central, northeast and western regions accounted for 80.02%, 14.61%, 3.72% and 1.64%, respectively. Among them, the central, northeast and western regions increased by 1.67, 0.66 and 0.38 percentage points year-on-year respectively, while the eastern region decreased by 2.71 percentage points over the same period in 2011. In inland provinces and cities, Hebei and Chongqing showed a good growth rate, up 150.58% and 51.80% respectively.

　　 More than 5% negative growth occurred in 1~2 months.

According to the statistics of National Bureau of statistics, in 2012 1~3, China's Enterprises above Designated Size completed 5 billion 847 million garment production, an increase of 7.93% over the same period last year. Among them, 2 billion 919 million woven garments and 2 billion 927 million knitted garments, respectively, increased by 5.54% and 10.44% over the same period in 2011.

1~2 month production once appeared more than 5% negative growth, caused the industry to be in an uproar, fortunately, and quickly reversed. Of course, this is a seasonal problem. First of all, from the end of 2011 to the beginning of 2012, domestic demand continued to be cold, and foreign orders were dissatisfied. Second, in recent years, workers have resumed work hours after the Spring Festival, especially migrant workers. After the first month of fifteen, they began to leave their hometown. The real peak of reemployment occurred in the "dragon head". Third, after the Spring Festival, a number of small businesses do not start. According to the China Clothing Association survey, although the operation is far away from the full load operation, the start of the large and medium enterprises is basically better than expected. The mobility of the employed is not as great as expected, and the economic downturn has spread to all walks of life, which also makes the job seekers more calm in choosing jobs. {page_break}

　　 Inter firm OEM affects gradient transfer among large enterprises

With the increase of production concentration, large enterprises will have another ripple effect, that is, the gradient transfer which is influenced by big enterprises will be opened.

Many people think that large enterprises located on the southeastern coast may be able to throw away their productive links and concentrate their efforts on brand building. However, although production seems to be big and small, it is still one of the most important components of enterprise competitiveness. Enterprises with light assets will also moderate investment in controlling production processes. For example, many international brands in China are required to build independent workshops in China. It is often the quality of production that leads to continuous orders, and the participation and control of enterprises in products that flow on the market. This is more like an intangible asset.

　　 Benefit growth rate down indicates industry consolidation period

According to the statistics of National Bureau of statistics, in 2012 1~3, the total industrial output value, main business income and total profit of garment enterprises above Designated Size in China increased by 16.83%, 14.66% and 11.05% respectively; the average gross profit margin of the industry was 16.37%, representing a 0.37 percentage point increase over the same period last year; the profit margin was 5.46%, a 0.21 percentage point drop from the same period last year; the contribution rate of total assets was only 0.14 percentage points higher than that of the same period last year;

Total profit and growth rate of garment industry in 2011~2012

According to the National Bureau of statistics, in 2012 1~3, the number of employees above designated size was 41 million 850 thousand, an increase of 0.59% over the same period last year, while the per capita output value, per capita business income and per capita profit increased by 16.14%, 13.99% and 10.40% respectively. Industry labor productivity reached 345 thousand and 500 yuan / person, an increase of 16.15% over the same period last year.

　　 Per capita profit indicators for the first quarter of 2012

The overall decline in industrial efficiency may be related to the change of statistical caliber and the reform of statistical methods, but the general trend is inevitable. Over the past 10 years, the industry has released most of its strength and is now in a "consolidation" period.

　 Investment chapter

Core thinking: what is the most sensitive nerve of investment as revealed by the change of statistical caliber?

Post market Proverbs: the statistical caliber is changing again. Generally speaking, the knitting garment industry is included in the clothing statistics category. At the same time, some of the leather industry is eliminated. Even comparing the two sets of data with different caliber, the increase is still limited. It can be concluded that the investment in the clothing industry is still in a "slow period".

The new construction is about twice as many as the completed project.

According to the statistics of National Bureau of statistics, in 1~3 months, the garment enterprises above Designated Size actually completed investment of 35 billion 910 million yuan, the number of construction projects, the number of new projects and the number of completed projects were 2409, 1026 and 500, respectively. The apparel industry actually completed 30.48% of the total investment in the textile industry. Among them, the new construction is only about twice the number of completed projects, and the number of new projects in the industry can be seen. In the past, it can basically reach 1.75 times, and the textile industry reaches 1.3 times in general.

　 Industry investment in the first quarter of 2012

The proportion of domestic investment increased by 1.7 percentage points.

Statistics from enterprises above Designated Size show that domestic investment in China's garment industry accounted for 90.71% of total investment in 1~3 months in 2012, representing a 1.7 percentage point increase over the same period in 2011. Private sector investment accounted for 49.11% of the total investment in the industry, down 0.59 percentage points from the same period last year. Limited by Share Ltd investment increased by 31.63% over the same period last year, accounting for 7.99% of the total investment in the industry, an increase of 0.99 percentage points over the same period last year. The investment in foreign-funded enterprises accounted for 1.84 percentage points of the total investment in the industry, and the investment in Hong Kong, Macao and Taiwan dropped by 3.09% compared to the same period last year, and foreign investment decreased by 12.13% compared with the same period last year.

Big enterprises are the mainstay of industrial development.

Investment is the most sensitive nerve in the industry. When the industry is in a "good market", investment is bound to be red, and when the industry is in a predicament, it will be possible to see who is or will be the backbone of the industry. Large enterprises implementing the modern enterprise system are undoubtedly the mainstay of industrial development.