70% Chinese Textile Firms Feel Heat of Global Financial Crisis
At the dawn of economic recovery in recent months, Chinese
textile exporters are waiting for more pickups. The "China Textile & Apparel"
journal of Adsale Publishing Limited has released 2009/10 China Textile Market
Outlook Survey Report, revealing impacts experienced by Chinese textile
enterprises during the global financial crisis and their business outlook for
the next two years. Industry trends in five aspects were also covered in the Report.
The survey was conducted in co-operation of Synovate.
The survey took place in April and June 2009 in the form of
individual face-to-face interviews and online questionnaires to collect views
of totally 800 entrepreneurs, managers and professionals from the textile
The "Surviving Tough Times: Now and The Future"
Report discusses a) development and outlook of Chinese textile enterprises and
b) how they coped with the global economic downturn that followed the credit
Switch Over to Better Quality
The Report says Chinese textile players are working to
enhance their productivity and many of them are able to maintain their
development amid the international financial crisis. Their endeavor is observed
in five areas: technical application and R&D, investment, market
development, product quality and human resources, in the hope of grasping more
market opportunities when the economy revitalizes. These efforts reflect that
the Chinese textile industry is entering an era of better quality, and the
focus of the market competition is likely to shift from price and quantity to
quality and product differentiation, leading to increased market integration
The Report has revealed that:
- In the aspect of technical application and R&D,
technological introduction and development will gain further importance
among textile enterprises. About 67% of respondent enterprises reported
their intent to invest more on R&D in coming years. Among them, textile
processing firms are the most enthusiastic group in such investment, thus
the demand of imported textile machinery is likely to persist in China.
- Second, capital investment is essential when
enterprises desire to improve themselves. The Report says that Chinese
textile enterprises are still confident in mid- to long-term investment
despite the current unfavourable economy. About 55% of the respondents
reported to prefer an investment payback period spanning between two to
four years. About 63% of them agree that the changing international market
is the biggest source of risk for their current investment decisions. It
is anticipated that investment projects of these enterprises will
gradually return on track when the economy is firm in the times ahead.
- Third, when asked about developing domestic and
overseas markets, a number of respondents experienced that the fact that
OEMs (original equipment manufacturing) no longer meet today's market
needs. Despite the hurdles, brand building is progressively important in
the domestic market. Market competition used to be less severe in the
Chinese market in the past, but it has become more and more tough for
Chinese players to dominate the domestic textile and apparel market as the
country opened its door to overseas companies. About 48% respondents agree
that the domestic market is shared by more market participants from home
and abroad. When opening overseas markets, about 53% of the respondents
tend to appoint local distributors to reduce risk and cost.
- Fourth, product and quality enjoy higher priorities and
are on the top of the agenda. About 86% of the respondents are found to
view that quality is critical to the development, a significant percentage
increase as compared to two years ago. They also expect that new products
will contribute more to sales and profits.
- Fifth, in the area of human resources, more talents for
technological development are needed across the country. The need and
eagerness for various types of talents is particularly acute in East China.