Industry News

From 2022 to 2023, the export advantage of China's clothing industry will remain stable, the domestic market is expected to gradually recover, and Internet plus clothing will become the general trend.

1、 Summary of the overall status of the clothing industry

    Affected by the severe and complex macro situation at home and abroad as well as multiple unexpected factors, the supply and demand sides of China's clothing industry are under serious pressure, and the economic operation continues to slow down.

    However, China's clothing exports have shown resilience and maintained their export advantages, and the production links have recovered quickly after being temporarily affected.

    After the opening of the epidemic prevention policy, the effect of the consumption promotion policy has also gradually emerged, the production, logistics and sales links have been restored to normal operation, the industry operating environment has become stable, enterprises have actively carried out marketing, the market activity has gradually improved, and the domestic clothing market has continued to recover.

    In 2022, the business model of the clothing wholesale industry is also changing: wholesale and retail, direct marketing, joint operation, franchise, distribution, online and offline (300959) integration. Some bosses have successfully transformed, and some are still waiting.

    Live merchandising and private domain operation are the two online marketing routes that the bosses of the clothing industry have tried most this year. What are the achievements? Is there any experience to copy? Let's see the details below.

    Looking forward to 2023, Internet plus clothing is expected to become one of the future development trends of China's clothing industry. The popularity of the online and offline integrated business model will increase, and the deep integration of the clothing industry and the Internet may improve the profitability of clothing enterprises to a certain extent.

    The epidemic that we are most worried about is also expected to reach the bottom in March 2023. At that time, the huge market demand and the recovery of consumption desire are waiting for the practitioners of the clothing industry to grasp.

2、 Clothing production

    Before the epidemic, although the production growth of China's clothing industry slowed down, it still showed a trend of stabilization and consolidation. According to the data of the National Bureau of Statistics, from 2000 to 2019, China's clothing products increased from 7.159 billion to 24.472 billion, with a compound annual growth rate of about 6.68%.

Under the epidemic, the production of China's clothing industry was temporarily affected, but the supply chain was quickly repaired. In 2020, affected by the epidemic, the production of yarn, cloth and clothing of enterprises above designated size in China decreased by 8.4%, 15.7% and 7.65% respectively year on year. In 2021, supported by the overall stable situation of domestic epidemic prevention and control and the recovery of domestic and foreign markets, China's production of yarn, cloth and clothing increased by 8.4%, 7.5% and 8.38% respectively year on year.

In 2022, affected by the rebound of the domestic epidemic and the more complex international political and economic environment, China's clothing industry has been faced with risks and challenges such as phased shutdown in some regions, poor logistics operation and high raw material prices, and the production and operation situation has fluctuated. Guangzhou Zhongda Textile Circle, one of the largest textile distribution centers in China, has also been suspended for some time.

However, as the situation of epidemic prevention and control gradually stabilized, the production and marketing of enterprises gradually recovered, and the industry prosperity is expected to gradually rise.

In addition, the cost pressure of clothing enterprises is also expected to be eased.

Judging from the price trend of main raw materials in the clothing industry, the prices of some raw materials have declined recently. In terms of cotton, domestic and foreign cotton prices have been falling since June 2022. On the one hand, affected by the early dry weather, cotton prices have been pushed higher; on the other hand, under the global economic recession, the demand and purchase of clothing by residents have declined, and the Federal Reserve's interest rate increase has continued the aggressive process. The pressure of commodity selling has increased, and cotton prices have been under pressure.

At the same time, considering that the current domestic cotton consumption is in the peak season, but the demand improvement is relatively limited due to the impact of weak consumption, which is weaker than in previous years as a whole. At the same time, the carry-over inventory of old cotton is high, and it is expected that the apparent marginal recovery of cotton consumption will still take time.

In addition to cotton, the market prices of TDI, pure MDI and rayon yarn have also decreased by different degrees since July 2022, and the cost pressure of clothing enterprises may be relieved.

3、 Domestic clothing sales

In terms of domestic sales, the growth of domestic sales in the clothing industry slowed down due to the frequent occurrence of domestic epidemic. In the future, with the improvement of the national epidemic prevention and control situation and the effect of consumption promotion policies, China's domestic sales growth is expected to improve.

First of all, the domestic market of China's clothing industry is huge.

With the rapid growth of China's economy, the steady increase of national income and the steady promotion of consumption upgrading trend, the scale of China's domestic clothing market has shown an overall growth trend. According to the data of the National Bureau of Statistics, before the epidemic, from 2000 to 2019, the retail sales of clothing, shoes and hats, needles, and textile products above the designated size in China increased from 95.92 billion yuan to 1.35 trillion yuan, with a compound annual growth rate of about 14.94%; The retail sales of clothing above the designated size increased from 58.79 billion yuan to 977.81 billion yuan, with a compound annual growth rate of about 15.95%.

Secondly, the epidemic has brought about a rebound in online consumer demand and accelerated the release of online consumer demand for clothing.

In 2020, the retail sales of online wear goods in China increased by 5.8% year on year, with a growth rate of 23.9 percentage points higher than that at the beginning of the year. In 2021, the domestic market recovered steadily. The retail sales of clothing, shoes and hats, needles, and textiles above the designated size in China increased by 12.7% year on year, and the growth rate rose by 19.3 percentage points year on year, with an average increase of 2.6% in two years, which is gradually approaching the growth level before the epidemic.

The retail sales of online channels grew steadily. In 2021, the retail sales of online wear goods increased by 8.3% year-on-year, and the growth rate rose by 2.5 percentage points year-on-year, with an average growth of 7% in two years.

In 2022, the monthly retail sales of clothing, shoes and hats, needles and textiles above the designated size in China are still declining year on year, but the decline is gradually narrowing. According to the data of the National Bureau of Statistics, the retail sales of clothing goods of units above the designated size fell by 9.2% year-on-year in October; From January to October, China's retail sales of clothing goods for units above the designated size totaled 739.12 billion yuan, down 5.5% year-on-year, 2.5 percentage points lower than the first half of the year, and 24.8 percentage points lower than the same period in 2021. The growth rate of online clothing retail has accelerated. From January to October, the online retail sales of clothing goods increased by 5.3% year-on-year, 2.9 percentage points faster than the first half of the year, and 8.8 percentage points slower than the same period in 2021. It can be seen that the decline is gradually narrowing.

The recovery of the domestic market is still very foreseeable.

4、 Clothing foreign trade

Looking back to 2022, although China's clothing trade is under serious pressure, it still has advantages.

Since the beginning of the year, China's clothing exports have continued to grow, driven by factors such as the recovery of international market demand and the rise of costs driving up export prices.

From January to August 2022, China's clothing and clothing accessories exports reached 118 billion US dollars, an increase of 11.6% year-on-year and 20.39% year-on-year. Under the epidemic situation, China's clothing exports continue to increase in the global share, and the export advantage remains stable.

However, after August, due to the increased risk of recession in the global economy, especially in the euro area, leading to the weakening of consumer demand in the international market, and the impact of multiple factors such as the recovery of overseas supply chains and Sino-US trade frictions, the growth of clothing exports slowed significantly.

In September, clothing exports turned to negative growth, and in October, the decline in exports was significantly deepened, and the downward pressure on clothing exports was further intensified.

As a large textile country, China's clothing industry has a stable position in the global value chain, and the overall competitiveness of the industry chain has been continuously enhanced. Firming confidence, improving quality and waiting for opportunities can catch up with the next wind of clothing trade and set sail.

5、 Clothing business model

In 2022, the business model of China's clothing industry has also undergone some changes.

At the moment when the industry development has reached a period of optimization and transformation, and the commodity selection is excessive, the competition in the clothing industry is becoming increasingly fierce, and the increment is becoming increasingly difficult.

In this context, clothing practitioners have to fall into the competition of existing customers, and only by replacing the previous extensive operation with refined operation can they better tap the existing resources in their hands.

In the exploration process of online and offline integration, many clothing owners have talked about the field of live broadcast and delivery, and have also made attempts.

In 2022, the clothing industry has also made remarkable achievements in the field of live broadcast and goods delivery.

The figure shows the industry distribution of Tiktok e-commerce turnover from January to June 2022

For garment manufacturers, the lower the garment industry chain is, the higher the gross profit margin is. The profit margin of brands and distributors is much higher than that of processing manufacturers, about 40-50%, while the gross profit margin of garment manufacturers is only about 15%.

For local brands, compared with international brands, users have gradually increased their attention to Chinese local brands in recent years, preferring local high-end/high-quality clothing brands, which is also a good time for these brands to further expand their influence and call on users.

Under such a background, practitioners in the clothing industry have to actively explore various channels to capture the attention of users, while the volume of the live broadcast platform with goods represented by Tiktok has rapidly increased, and the threshold for live broadcast has been lowered, so major clothing brands and manufacturers have entered the live broadcast platform.

The picture shows the real-time ranking of Tiktok live tape list. Among the top three, clothing live broadcast accounts for two.

Among them, the brand clothing live broadcast with good data performance has the following characteristics:

Release the live broadcast strip into daily works to reduce the cost of obtaining details of consumers' products;

Have a detailed and comprehensive live broadcast process;

The main difference between online and offline prices in the live broadcast room is the high-frequency words: price, one false one will pay ten;

There are professional model displays, product introductions, size recommendations and other details.

In 2022, China's clothing industry has also increased its exploration in the field of private traffic.

China's clothing industry has moved from the rapid development stage dominated by extension expansion to the optimized development stage dominated by endogenous expansion. The demand for clothing consumption has constantly shifted to the consumption of fashion, culture, brand and image. The clothing industry is facing the pressure of transformation and upgrading, and the competition is intensifying. At this time, the private sector provides new ideas for business growth.

The Private Sector Guide of China's Clothing Industry in 2022 points out that the private sector operation of clothing enterprises mainly presents two characteristics.

First, digital capability is mature, and online and offline integration is accelerated.

Second, the private domain model is diversified, and the report card of clothing enterprises is bright.

The brilliant results of live broadcast and private traffic operation in the clothing industry have also attracted many clothing wholesale and retail owners, who have followed the trend.

It is suggested that before entering the live broadcast field and private domain operation, clothing merchants should first find out their positioning and advantages, and combine the characteristics of offline stores and the characteristics of existing customers to make a good basic plan.

Make use of data analysis, consolidate theoretical knowledge, and expand outward with the flow of basic disk. The basic business is private domain. Only by doing well in private domain and then expanding to public domain can there be a set of effective operation methods to support the expansion of business territory.

5、 Future development of clothing industry

At present, with the precise implementation and gradual opening of the epidemic prevention policy, people's scientific understanding of the epidemic situation is constantly updated, market activity is gradually recovering, and new models are also gradually emerging, and the domestic clothing market is expected to rebound.

1. Active consumption atmosphere and gradual recovery of market vitality

With the implementation of optimized prevention and control measures, the energetic clothing industry has ushered in a "warm spring" in the cold winter.

Take Guangzhou as an example.

According to the data of the freight platform, since Guangzhou adjusted and optimized the epidemic prevention measures on November 30, the freight bill volume increased by about 50% month-on-month from December 1 to 10.

"For the development of the clothing industry, we think the most important thing is confidence," said Chen Shaotong, secretary general of the Guangdong Clothing Industry Association. He pointed out that the industry as a whole will slowly restore order, and there will be a qualitative improvement in both production and sales.

In addition, as New Year's Day, Spring Festival and other holidays are coming, consumer demand will be driven and fully developed.

In order to meet the last sales season of this year, clothing retail enterprises will actively increase marketing efforts, expand the market through multiple channels, and seize the last opportunity window to impact the annual performance.

The move of clothing retail enterprises to try various promotional and preferential activities to boost the performance of the last quarter will also further stimulate consumer demand and form a virtuous cycle of consumption, which is conducive to the steady recovery of market confidence.

2. "Internet plus Clothing" is expected to become one of the future development trends of China's clothing industry

Big data, e-commerce platforms and other factors catalyze the rapid development of online consumption in China by overlaying the impact of the epidemic.

In recent years, "Internet plus" has achieved rapid development, and big data, cloud platform, e-commerce, cross-border e-commerce and other businesses have flourished.

In this process, new business development models have emerged in the market. The online and offline integrated business model has been continuously recognized, and live broadcast with goods and private domain operation have become the marketing promotion path that ordinary clothing merchants will also choose.

In addition, after the outbreak of the COVID-19 epidemic, residents' consumption habits and consumption structure have also changed to some extent. According to the relevant survey data of the China Consumer Association, online consumption has become increasingly popular with consumers due to the epidemic. Among them, nearly 60% of the consumers surveyed said that online consumption exceeded offline consumption, and 70.6% said that the proportion of online consumption increased year on year after the epidemic.

In this context, Internet plus clothing is expected to become one of the future development trends of China's clothing industry.

Taking the "Double 11 Shopping Festival" in 2022 as an example, the total online transaction volume was 557.1 billion yuan (as of 8 a.m. on the 11th), an increase of 8.45% compared with the total transaction volume of Tmall's Double 11 of 540.3 billion yuan in 2021. Among them, clothing, shoes and bags are still the core consumer category with the most fierce competition and the highest proportion of sales.

Even in the autumn and winter of 2022, when the general environment is declining, disposable income is decreasing, and shopping desire is declining, the turnover of e-commerce shopping festival has set a new historical record, which shows the consumption potential and great value of Internet plus clothing.

While the online consumption of products in the clothing industry has increased, clothing enterprises have also actively combined the application of Internet information technology in the design and production of products to optimize the product structure.

Therefore, the deep integration of the clothing industry and the Internet may improve the profitability of clothing enterprises to a certain extent. It is the general trend of the clothing industry to actively use software to manage the purchase, sales and inventory process, explore the private domain flow play, and do online sales.

3. Forecast of epidemic situation in 2023

Zhang Wenhong, director of the Infection Department of Huashan Hospital affiliated to Fudan University, said, "We need to prepare for this round of epidemic for 2-4 months."

Taking Singapore data as an example, the case fatality rate of the COVID-19 is 0.06%, far lower than that of influenza. However, since Singapore opened up on January 1, the case related data did not reach the bottom until April 15, a period of about four months.

Therefore, after the comprehensive optimization and liberalization of epidemic prevention measures in December, it is expected that by March next year, the COVID-19 in China will turn into a low-level epidemic.

At that time, the flow of people in the national clothing market is expected to resume prosperity, and the consumption demand is expected to reach a new peak. The clothing wholesale and retail businesses need to prepare in advance:

1. Don't rush for quick success and instant benefit, and lose your original intention to do well in quality.

2. Create a recognizable and competitive offline shopping experience.

3. In terms of sales channels, both online and offline channels should be operated together.