Fashion

How China's clothing industry is emerging from the pandemic


The Chinese clothing industry has been hit hard by the corona crisis –
not only in terms of production, where China remains an important global
player, the internal market, too, has also been impacted by store closures
and curfews. How is the Chinese clothing industry doing today? Which
developments are emerging and how are Chinese consumers behaving?
FashionUnited spoke to Chen Dapeng, president of the China National Garment
Association and president of the fashion fair Chic. He maintains a
confident outlook and launched Chic Shenzhen this week, the first “offline”
trade fair to take place in China following the pandemic.

What is the current situation in the Chinese clothing industry? Is it
already operating at the same capacity as before the crisis?

Chen Dapeng: The sudden outbreak of the coronavirus
has disrupted the usual pace and order of the clothing industry. Problems
such as weak consumption, closed physical stores and logistics have created
immense pressure and challenged the development of the industry.

With the effective control of the epidemic in China, the market is
gradually recovering. More than 90 percent of garment enterprises have
maintained the level of their production and the supply chains have
generally recovered. However, foreign trade is severely affected due to the
contraction of international markets and especially export-oriented
enterprises are facing difficult times.

How strongly is the Chinese garment industry affected by
cancellations, order cutbacks, and non-payments from its foreign customers?

Due to the outbreak of the novel coronavirus, major apparel export
markets such as the US, the European Union and other markets had to shut
down, and consumer demand has fallen sharply internationally. This has led
to a sudden increase in the cancellation or delay of orders by European and
American clients since mid-March. Apparel export orders and the number of
new orders dropped significantly, leading to an unprecedented impact on
Chinese exporters.
According to the statistics by China’s customs office, from January to May
2020, exports of clothing and accessories totaled 38.21 billion US dollars,
down 22.8 percent year-on-year. With the sharp reduction of international
orders, most of China’s garment export enterprises ran into a significant
decline in workload, and some enterprises had to compensate with breaks and
rotation; some smaller export enterprises are facing tremendous pressure to
survive.

READ  Netflix have dropped the trailer for Marriage Story and it looks so gripping

In recent years, the Chinese garment industry has shifted from mass
production to highly specialized production. Is this an advantage in the
current situation?

Facing an entirely new environment, the Chinese apparel industry has
increasingly turned its focus to the product in recent years. Efforts have
been made to improve the adaptability of products according to changes in
consumer demand – from various aspects such as technological, design,
management and service innovation. The companies are actively taking
fashion aesthetics, functionality, and ecological and environmental
protection into consideration to meet consumer demand.

While continuously optimizing the product, they’re also paying
particular attention to a new generation of information technology. In this
process, companies are adopting mass customization models and smart
manufacturing factories, and the level of lean, flexible and
service-oriented manufacturing in the supply chain is constantly improving.
The industry isn’t only overcoming current difficulties, it is also laying
a solid foundation for the next transformation and upgrade.

How do you think the current crisis will affect global sourcing?

The current crisis has a far-reaching impact on global procurement.
More importance will be given to geographical proximity, diversification
and flexibility, which will certainly accelerate the pace of structural
reconstruction of the production chain and even boost global relocation and
transfer of some production capacity. However, the change will not be that
radical and the scope will not be very wide in the short term. The global
supply chain follows the logic of industrial development and business, and
its evolution under market conditions will also take time. It is not as
simple for some countries to relocate enterprises from China. The
advantages of China’s overall apparel industry are still obvious, and its
position will not change in the short term.

READ  Little Women: Atlanta Star Ashley "Ms. Minnie" Ross Dead at 34 After Hit-and-Run Car Accident

Will geographical proximity play a more important role again in the
future? With regard to China: Will Chinese producers shift their focus to
the domestic market in the future?

In the era of the Internet, consumers are playing a more active role in
consumption. They don’t only pursue more diversification and
personalization, but also have higher demands for the flexibility and
agility of products and services. Therefore, geographic proximity is a
natural advantage and the importance of trade regionalization is rising. I
think this is an important feature and direction of development in the new
era of globalization.

China has a huge clothing market, and Chinese garment companies have
always been focusing on the domestic market. Two-thirds of total production
capacity is used to meet domestic demand. The advance of China’s economy
and society, especially the consumption upgrade (note: a term for rising
consumption of higher quality goods in China) – stimulated by a new
generation, has brought broad room for development and business
opportunities for the clothing brands and enterprises all over the world.

In the retail sector, the crisis has accelerated digitalization. Can
we now expect the same in terms of sourcing and production?

During the epidemic outbreak, new marketing models like live streaming
and community marketing effectively made up for the gap caused by offline
channel loss. This is the power of continuous innovation of China’s fashion
e-commerce sector. In fact, with the advancement of technology and the new
requirements for industrial development, the digital development of China’s
clothing industry is moving from consumer internet to industrial internet.
The new era of the digitalization of the clothing industry has begun: with
smart equipment and industrial internet as the core, from R&D to design,
textile dyeing and processing to final product manufacturing, all parts in
the supply chain are shifting towards digitalization, networks and
artificial intelligence.

READ  Nike declares 11 percent increase in quarterly dividend

What is the current consumer sentiment in China? Are consumers buying
the same amount of clothing as before?

Like other markets in the world, the epidemic impacted China’s clothing
market massively. With the improvement of domestic epidemic prevention and
control, clothing consumption started to recover in the second quarter. We
believe that as long as the epidemic could be effectively controlled, the
recovery of clothing consumption will accelerate in the third quarter, and
even more in the fourth quarter.

In Europe, nearly all trade shows have been postponed to the next
year. How have the reactions to your upcoming Chic edition in Shenzhen in
July been?

Many exhibitions have been postponed in China as well. This year’s Chic
spring edition also had to take place online in April, but fortunately, it
received quite a good response. We are going to hold Chic Shenzhen in July,
which is the first offline exhibition in China this year. We hope it could
help enterprises with their business development and collaboration within
the supply chain. We received positive feedback from the industry, and for
most people it will be a very good opportunity, helping them to solve
problems and overcome difficulties. The industry needs a platform to meet
and exchange.

Picture: Chic Shanghai / China National Garment Association



READ SOURCE

Leave a Reply