Industry News: Economic Operation Of Clothing Industry From January To August

Since this year, China's clothing industry is facing a more complex and severe situation. The global epidemic continues to spread, the risk of economic stagflation is rising, domestic epidemic outbreaks, high temperature and extreme weather and other factors beyond expectations have a greater impact on production and consumption. Insufficient market demand, poor supply chain of the industry chain and other production and operation difficulties are more prominent, restricting the stable recovery of the industry's economic operation. In August, under the support of a series of "stable growth" policies and measures, China's domestic clothing market gradually recovered and investment maintained a good growth. However, under the influence of unfavorable factors such as shrinking foreign demand, epidemic disturbance, high cost and increasing geopolitical risks, the production decreased slightly, the export growth rate fell sharply, and the benefit growth continued to be under pressure. Looking forward to the whole year, the current unstable and uncertain factors are increasing obviously, there are still many difficulties and challenges in the production and operation of enterprises, and the stable recovery of the economic operation of the clothing industry is still facing a great test.

　　 Economic operation of clothing industry

　　 Clothing output decreased slightly

In August, affected by factors such as frequent outbreaks of domestic epidemics, insufficient market demand, accelerated outflow of orders, and high temperature power rationing in some provinces and cities, the industrial added value of Enterprises above Designated Size in the garment industry decreased further, the garment output increased negatively for three consecutive months, and the recovery process of garment production slowed down significantly. According to the data of the National Bureau of statistics, in August, the industrial added value of Enterprises above Designated Size in the clothing industry decreased by 1.3% year-on-year, 1.1 percentage points deeper than that in July; From January to August, the industrial added value of Enterprises above Designated Size in the clothing industry increased by 2.9% year-on-year, 0.7% slower than that of January July and 7.0% slower than that of the same period in 2021. Over the same period, the garment output of Enterprises above designated size was 15.259 billion, a year-on-year decrease of 1.42%, a decrease of 0.12 percentage points from January to July and a decrease of 14.27 percentage points compared with the same period in 2021; Among them, the output of woven clothing was 5.736 billion pieces, a year-on-year decrease of 2.07%; The output of knitwear was 9.523 billion pieces, a year-on-year decrease of 1.03%.

Figure 1 production growth of clothing industry from January to August 2022

Source: National Bureau of statistics

　　 Domestic market rebounded steadily

Thanks to the efficient coordination of epidemic prevention and control and economic and social development by governments at all levels, as well as the implementation of consumption promotion policies, the domestic clothing sales market has maintained a good recovery trend, the growth rate of online retail sales has steadily rebounded, and the operation of physical stores has improved. However, due to the frequent occurrence of epidemic in China, the residents' social travel and commercial operation are still limited, so the residents' willingness to choose clothing products needs to be further improved. According to the data of the National Bureau of statistics, the retail sales of clothing goods of units above the quota in August increased by 6.0% year-on-year, 4.7 percentage points faster than that in July; From January to August, the total retail sales of clothing goods of units above the quota in China totaled 581.4 billion yuan, a year-on-year decrease of 5.5%, 1.4 percentage points lower than that of January July. Online clothing retail sales maintained a steady growth. From January to August, online retail sales of wearing goods increased by 4.0% year-on-year, 0.6% faster than that from January to July. According to the statistics of China National Business Information Center, the retail sales of clothing goods of 100 key large-scale retail enterprises increased by 2.1% year-on-year in August, higher than 3.6% in July.

Figure 2 clothing sales in the domestic market from January to August 2022

Source: National Bureau of statistics

　　 Outlet downward pressure increases

From January to August, China's clothing export continued to maintain a rapid growth on the basis of the high base in 2021, showing a strong development toughness. However, affected by the formal entry into force of the "Xinjiang related act" of the United States, the growth rate of clothing export slowed down significantly in August, especially the double-digit decline of cotton clothing export to the United States. According to the data of China Customs, from January to August, China's total exports of clothing and accessories reached 118.034 billion US dollars, an increase of 11.6% year-on-year, and the growth rate was 1.3 percentage points slower than that of January July; In August, the export of clothing and accessories was $18.486 billion, up 5.1% year-on-year, and 13.4% slower than that in July.

Figure 3 export of China's clothing and accessories from January to August 2022

Source: China Customs

The export volume of woven clothing fell and the price rose, and the pull effect of price growth continued to strengthen. According to the data of China Customs, from January to August, 23.45 billion pieces of clothing were exported, up 3.8% year-on-year. The average export unit price was $4.32, up 13.4% year-on-year. Among them, the export volume and price of knitwear rose simultaneously, the export quantity and export unit price increased by 7.2% and 9.9% respectively; The export volume of woven clothing decreased by 1.4% year on year, and the export unit price increased by 19.4% year on year. From the perspective of sub categories, from January to August, the export of high value-added clothing such as commuting, sports and social networking increased rapidly. The export of cold proof clothing and shirts such as overcoat, down jacket and so on increased by 39.9% and 38.1%, respectively; the export of sweater clothing increased by 24.7%; the export of sportswear and skirt clothing increased by 19.0% and 19.9% respectively; However, the export of underwear, pajamas and other household clothing increased by 10.9% year-on-year, significantly slowing down. Over the same period, China's exports of anti epidemic materials dropped sharply. The exports of gloves made of plastics and vulcanized rubber decreased by 65.7% year-on-year, and the protective clothing made of chemical fiber decreased by 54.5%.

From the perspective of major export markets, in August, China's clothing exports to the United States decreased significantly, the growth rate of clothing exports to the European Union slowed down, while the clothing exports to ASEAN accelerated growth, and the clothing exports to Japan rebounded slightly. According to the data of China Customs, from January to August, China's clothing exports to the United States amounted to 27.84 billion US dollars, an increase of 11.1% year-on-year, 4.6 percentage points slower than that of January July; In August, affected by the entry into force of the "frontier related act" of the United States, China's clothing export to the United States changed from a high-speed growth of more than 20% in the first three months to a year-on-year decrease of 11.0% and a month on month decrease of 18.5%. Among them, China's cotton clothing exports to the United States decreased by 23.6% year-on-year and 20.9% month on month. From January to August, China's clothing exports to the EU amounted to US $24.33 billion, up 19.0% year-on-year, 2.8 percentage points slower than that of January July; In August, due to the high inflation of EU countries and the weakening of consumer demand, China's clothing export to EU only increased by 5.4% year-on-year, 25% slower than that in July, and decreased by 22.8% month on month. Over the same period, China's clothing exports to ASEAN showed a strong growth trend, with a year-on-year growth of 30.1%, 0.8 percentage points faster than that of January July; China's clothing export to Japan increased from decline to increase, with a year-on-year increase of 1.1%, 2.4 percentage points higher than that of January July. From the perspective of export regions, China's clothing exports to countries and regions along the belt and road, Latin America and Oceania continued to maintain a rapid growth, with growth rates of 16.2%, 31.5% and 18.8%, respectively. The total growth rate of China's clothing export was 5.9 percentage points, and the clothing export to Africa decreased by 11.5% year-on-year. In addition, China's clothing exports to Canada and Russia decreased by 8.0% and 23.7% respectively.

The growth rate of major clothing export provinces and cities slowed slightly, while the decline of Guangdong clothing export deepened. From January to August, Zhejiang, Guangdong, Jiangsu, Shandong and Fujian, the top five provinces of China's clothing exports, totaled 84.32 billion US dollars, a year-on-year increase of 9.6%, accounting for 71.4% of China's total clothing exports, down 1.3 percentage points from the same period in 2021. Among them, Zhejiang's clothing export amounted to 24.37 billion US dollars, with a year-on-year increase of 25.4%, 4.8 percentage points slower than that from January to July, and still higher than the average growth rate of national clothing export; Guangdong's clothing export decreased by 6.6% year-on-year, 1.6% more than that of January July; The clothing exports of Jiangsu, Shandong and Fujian Province increased by 11.3%, 17.1% and 1.6% respectively year-on-year, slowing down by 2.6%, 3.1% and 3.4 percentage points respectively compared with January July. In addition, Shanghai's clothing export increased by 11.5% year-on-year, 1.1 percentage points slower than that in January July. Among the central and western provinces, Xinjiang's clothing exports accelerated growth, with an increase of 81.1%, 11.4 percentage points faster than that from January to July. The clothing exports of Jiangxi, Hunan, Liaoning and Sichuan maintained rapid growth, with the growth rates of 49.1%, 62.7%, 22.6% and 61.4% respectively, while that of Hubei, Hebei and Guangxi decreased by 9.7%, 46.4% and 35.8% respectively.

　　 Enterprise benefits continue to bear pressure

Since this year, affected by multiple factors such as epidemic disturbance, shortage of orders, high cost and other factors, the growth of China's clothing industry's main benefit indicators has continued to slow down, and the economic operation has been under severe pressure. According to the data of the National Bureau of statistics, from January to August, there were 13117 Enterprises above Designated Size (annual main business income of 20 million yuan and above) in China's clothing industry, with an operating revenue of 950.401 billion yuan, a year-on-year increase of 3.71%, a growth rate of 0.2 percentage points slower than that of January July and a slowdown of 5.87 percentage points compared with the same period in 2021; The total profit was 43.57 billion yuan, with a year-on-year increase of 3.37%. The growth rate was 0.59 percentage points slower than that of January July and 6.16 percentage points lower than that of the same period in 2021. The decline of industry operation efficiency and high cost make it difficult for enterprises to improve their profits. From January to August, the turnover rate of finished products of Enterprises above Designated Size in the clothing industry was 11.91 times / year, a year-on-year decrease of 3.34%; The operating cost increased by 4.43% year-on-year, which was 0.72 percentage points higher than the growth rate of operating revenue. The operating cost per 100 yuan of operating income included the cost of 86.08 yuan, an increase of 0.59 yuan over the same period in 2021; The profit margin of operating revenue was 4.58%, 0.02 percentage points lower than that of the same period in 2021.

Figure 4 the main benefit indicators of clothing industry from January to August 2022

Source: National Bureau of statistics

　　 Investment maintained rapid growth

In August, the growth rate of fixed assets investment in China's clothing industry dropped slightly, but it still maintained a rapid growth. It shows that with the support of governments at all levels to strengthen the industrial chain, enterprises' confidence in the high-quality development of the industry has gradually increased, and they have increased investment in the fields of automation, digital and intelligent technology transformation and upgrading, brand building and regional layout adjustment, Industrial transformation and upgrading were advanced in depth. According to the data of the National Bureau of statistics, from January to August, the completed fixed assets investment of China's clothing industry increased by 30.9% year-on-year, 26.1 percentage points higher than that of the same period in 2021, and 23.3 and 20.9 percentage points higher than the overall level of textile and manufacturing industries.

Figure 5 growth rate of fixed assets investment in clothing industry from January to August 2022

Source: National Bureau of statistics

　　 Characteristics of clothing listed enterprises in the first half of 2022

According to the statistics of 71 clothing and apparel listed enterprises in the first half of 2022, 36 of them achieved a year-on-year increase in business income and 28 enterprises achieved a year-on-year increase in net profit. Under the influence of Xinguan epidemic situation and other factors, on the one hand, the clothing industry in the period of industry adjustment is "carrying forward with heavy load"; On the other hand, the speed of industry centralization is accelerated, and backbone enterprises actively "seek change" and open up new opportunities.

　　 Strengthen the superior products of enterprises and strengthen brand cognition

Brands with certain category advantages have "backtrack" the brand growth genes, explore or create their own traditional superior single products. By focusing on the product innovation and upgrading of single products, focusing on the image building of single products in brand promotion, strengthening the characteristics of exclusive categories, striving to realize the customer impression of "brand = category" and deepen customers' cognition of "category" of the brand. Focusing on men's trousers, jiumuwang has continued to strengthen the research and development of products and fabrics, promote the younger style of products, optimize and integrate the pants types, and research and improve some technologies, so as to further enhance the comfort of pants. At the same time, jiumuwang has also continuously improved the professionalism and popularity of its brand. In January and June this year, it successively launched a new series of pants shows at Paris fashion week and Milan fashion week, demonstrating the achievements of the brand's transformation to internationalization and fashion. It is also to strengthen the single product. Through online and offline integrated marketing, biyinlefen creates a super single product, small collar T, and further consolidates the industry position of biyinlefen T-shirt expert. Biyinlefen will continue to create highly competitive products through fabric innovation, pattern optimization, design breakthrough, cultural empowerment and other ways, so as to continuously improve its R & D advantages.

　　 Digital and intelligent technology, enabling brand development

Customer oriented, in order to achieve rapid and accurate market response, brand enterprises increasingly emphasize the application of digital and intelligent technology, and effectively promote the improvement of enterprise operation quality through new technologies such as intelligent factory, smart store, RFID technology, 5g, cloud warehouse, intelligent middle and back office system. In addition, the epidemic has changed consumers' consumption habits, and brand clothing enterprises have increased the scale of private operation, using new digital tools and new ways to strengthen communication with customers. In this regard, GELIS deepened the construction of Omni channel digital management system, significantly improved the delivery time, effectively improved the efficiency of goods circulation and the satisfaction rate of commodity allocation, and fully explored the sales potential of the front-end. In terms of brand promotion, GELIS's virtual digital human @ SA ELISA continuously and accurately conveys differentiated brand personality ideas by opening exclusive accounts on social networks represented by xiaohongshu. In the future, through the same frame appearance of domestic famous spokesperson and virtual digital human @ SA ELISA, and combining virtual reality with social media marketing, it will continue to ignite hot topics of discussion among the younger generation.

　　 Continue to optimize the channel structure and link the consumer market

Brand enterprises should speed up the improvement of consumer centered, large-scale Omni channel marketing network, and fully cover online and offline channels. In terms of online channels, products are sold on well-known e-commerce platforms such as tmall, vipshop and Jingdong, and the corresponding layout in the social media retail network is emphasized to occupy the flow dividend of interest e-commerce. At the same time, brand enterprises have strengthened the construction of channels such as microblog, wechat, Douyin and xiaohongshu, actively used digital tools to convey brand value, link consumers, enhance customer experience, and continuously promote the management and operation upgrading of "people, goods and markets". For example, baoxiniao has strengthened the promotion of all staff marketing, expanded online channels and live broadcasting business, accelerated the development of live broadcasting business and video number live broadcast of "headquarters + regional stores", and achieved sustained and rapid growth of online business, offsetting the impact of abnormal operation of some physical stores. In terms of offline channels, enterprises pay more attention to the optimization and integration of existing stores, and continue to increase the retail power. For example, amo's brand continues to improve the image of its new stores, and amo brand continues to use its new image in 2021. So far, 80 terminal stores have appeared with a new image, and the upgrading of new stores has received good market feedback. In the same way, anzheng group accelerated the optimization and adjustment of stores and actively promoted the work of channel renewal. In the first half of the year, 141 offline stores were added and 272 stores were adjusted and optimized. With the improvement of store efficiency as the core, the channel structure of stores was optimized, and new consumer business districts such as shopping centers, OLE and fashion department stores were actively arranged to improve the operation quality of stores.

(source: China clothing association)