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EU debt crisis forces Chinese textile firms to reduce costs
15
Nov '11
The intensified debt crisis in several countries of Europe is forcing Chinese textile enterprises to change strategy. Textile companies say their European customers are making offers at a very low price and hence cost cuts have become a reality for them.

In fact, companies which do not change their strategy are finding it difficult to procure orders from European companies who are placing lesser number of orders and at a very low price.

Chen Yuewu of Guangdong Textiles Import & Export Co. Ltd. describes an instance where a European client, immediately on his return after placing orders, asked to cut hundreds of pieces in each order, a situation unthinkable earlier.

Cao Xiaojian of Jiangsu Sainty Group states that there is a sharp drop in orders from overseas markets, especially the EU and the US, compared with last year. He points out that there is a huge decline in amount of single order. He adds that export orders for some items have declined by over 70 percent.

In the changed scenario, European customers prefer 'good commodities with cheaper price', instead of their earlier preference for 'superior quality products and higher price'.
So, Chinese textile enterprises have to reduce production costs in order to stay in business.

In fact, small textile manufacturing units are undercutting each other's prices to take business, said Yang, owner of a textile export company in Qingdao.

Fibre2fashion News Desk - China

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