In 2022-2023, my country’s apparel industry’s export advantage will remain solid, the domestic market is expected to gradually pick up, and Internet + apparel will become the general trend.
1. Summary of the overall status of the apparel industry
Affected by the severe and complex macroeconomic situation at home and abroad as well as multiple unexpected factors, my country’s apparel industry has been severely under pressure on both supply and demand ends, and the economic performance has continued to decline. Slow down.
However, my country’s clothing exports have shown resilience and maintained their export advantage, and the production process has recovered relatively quickly after being temporarily affected.
After the relaxation of epidemic prevention policies, the effects of consumption-promoting policies have gradually emerged. Production, logistics and sales links have resumed normal operations, the industry operating environment has become stable, companies have actively carried out marketing, and market activity has gradually improved. , the domestic clothing market continues to recover.
In 2022, the business model of the clothing wholesale industry is also changing: wholesale and retail, direct operation, joint operation, franchise, distribution, online and offline (300959) integration, and some bosses have successfully transformed , some are still waiting and watching.
Live sales and private domain operations are the two online marketing paths that clothing industry bosses have tried the most this year. What are the results? Is there any experience that can be replicated? Let’s see the details below.
Looking forward to 2023, Internet + clothing is expected to become one of the future development trends of my country’s clothing industry. The popularity of online and offline integrated business models will increase. The deep integration of the clothing industry and the Internet may enhance the clothing industry to a certain extent. The profitability level of the enterprise.
The epidemic that everyone is most worried about is also expected to reach its bottom in March 2023. By then, huge market demand and revived consumer desire are waiting for garment industry practitioners to grasp it.
2. Garment Production Sector
Before the epidemic, although the production growth rate of my country’s garment industry had slowed down, it still showed a stable and strengthening trend. According to data from the National Bureau of Statistics, from 2000 to 2019, my country’s clothing products increased from 7.159 billion pieces to 24.472 billion pieces, with an average annual compound growth rate of approximately 6.68%.
During the epidemic, production in my country’s garment industry was temporarily affected, but the supply chain was quickly repaired. In 2020, affected by the epidemic, the output of yarn, cloth and clothing of enterprises above designated size in my country decreased by 8.4%, 15.7% and 7.65% respectively year-on-year. In 2021, supported by the overall stable domestic epidemic prevention and control situation and the recovery of domestic and foreign markets, my country’s yarn, cloth, and clothing output increased by 8.4%, 7.5%, and 8.38% respectively year-on-year.
Affected by factors such as the rebound of the domestic epidemic and the more complex international political and economic environment in 2022, my country’s garment industry has successively faced risk challenges such as phased shutdowns and production shutdowns in some areas, poor logistics operation, and high raw material prices. Production and operation conditions have fluctuated. One of the largest textile distribution centers in China, Guangzhou Zhongda Textile Circle has also been shut down for a period of time.
However, as the epidemic prevention and control situation gradually stabilizes, corporate production and sales gradually resume, and the industry’s prosperity is expected to gradually rebound.
In addition, the cost pressure on clothing companies is also expected to be alleviated.
Judging from the price trend of the main raw materials in the clothing industry, the prices of some raw materials have fallen recently. In terms of cotton, domestic and foreign cotton prices have continued to decline since June 2022. On the one hand, they were affected by the previous dry weather, which pushed cotton prices higher; on the other hand, under the global economic recession, residents’ demand and purchase volume for clothing have increased. The decline, coupled with the continuation of the aggressive process of the Federal Reserve’s interest rate hikes, increased selling pressure on commodities, and cotton prices were under pressure to fall.
At the same time, considering that domestic cotton is currently in the peak consumption season, but due to weak consumption, demand improvement is relatively limited and overall weaker than in previous years. At the same time, old cotton carryover stocks are high, and cotton consumption is expected to show a significant decline. Marginal recovery will still take time.
In addition to cotton, the market prices of TDI, pure MDI, and rayon yarn have also declined to varying degrees since July 2022, and the cost pressure on clothing companies may have eased.
3. Domestic sales of clothing sector
In terms of domestic sales, affected by the frequent outbreaks of domestic epidemics, the growth of domestic sales in the clothing industry has slowed down. In the future, as the national epidemic prevention and control situation improves and the effects of consumption-promoting policies appear, my country’s domestic sales growth is expected to improve.
First of all, the domestic market of my country’s clothing industry is huge.
As my country’s economy maintains rapid growth, national income steadily increases, and the trend of consumption upgrading steadily advances, the scale of my country’s domestic clothing market is generally showing a growth trend. According to data from the National Bureau of Statistics, before the epidemic, from 2000 to 2019, my country’s retail sales of clothing, shoes, hats, needles, and textiles above designated size increased from 95.92 billion yuan to 1.35 trillion yuan, with an average annual compound growth rate of approximately 14.94%; above designated size Clothing retail sales increased from 58.79 billion yuan to 977.81 billion yuan, with an average annual compound growth rate of approximately 15.95%.
Secondly, the epidemic has brought about a rebound in online consumer demand, and online consumer demand for clothing has accelerated.
In 2020, my country’s online retail sales of clothing products increased by 5.8% year-on-year, and the growth rate rebounded by 23.9 percentage points from the beginning of the year. In 2021, the domestic sales market will steadily pick up. Throughout the year, my country’s retail sales of clothing, shoes, hats, needles, and textiles above designated size increased by 12.7% year-on-year. The growth rate rebounded by 19.3 percentage points year-on-year. The two-year average growth was 2.6%, which is gradually approaching the growth level before the epidemic. .
Online channel retail sales are growing steadily. In 2021, online retail sales of clothing products will increase by 8.3% year-on-year, with the growth rate rebounding by 2.5 percentage points year-on-year, and the two-year average growth rate is 7%.
In 2022, although my country’s single-month retail sales of clothing, shoes, hats, needles, and textiles above designated size are still declining year-on-year, the decline isSince the optimization of epidemic prevention measures, the volume of freight orders has increased by about 50% month-on-month in the ten days from December 1 to 10.
“For the development of the clothing industry, we feel that the most important thing is confidence.” Chen Shaotong, secretary-general of the Guangdong Garment and Apparel Industry Association, said bluntly. He pointed out that the industry as a whole will slowly return to order, and there will be a qualitative improvement both at the production and sales levels.
In addition, New Year’s Day, Spring Festival and other holidays are about to come together, and consumer demand will be intensively driven and fully exerted.
In order to welcome the last sales season of this year, clothing retail companies will actively increase marketing efforts, develop markets through multiple channels, and seize the last window of opportunity to impact annual performance.
The attempts by clothing retail companies to try various promotions and discounts to boost their performance in 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 + Clothing” is expected to become one of the future development trends of my country’s clothing industry
Big data, e-commerce platforms and other factors will catalyze and superimpose the impact of the epidemic to promote online consumption in my country develop rapidly.
In recent years, “Internet +” has achieved rapid development, and businesses such as big data, cloud platforms, e-commerce and cross-border e-commerce have flourished.
In this process, the market has successively produced new business development models. The integrated online and offline business model continues to be recognized, and live streaming and private domain operations have become marketing and promotion paths that ordinary clothing merchants will also choose.
In addition, after the outbreak of the new crown epidemic, residents’ consumption habits and consumption structure have also undergone certain changes. According to relevant survey data from the China Consumers Association, due to the impact of the epidemic, online consumption has become increasingly popular among consumers. Among them, nearly 60% of consumers surveyed said that online consumption exceeded offline consumption, and 70.6% of consumers said that the proportion of online consumption has increased year-on-year after the epidemic.
In this context, Internet + clothing is expected to become one of the future development trends of my country’s clothing industry.
Taking the 2022 “Double 11 Shopping Festival” as an example, the entire network’s transaction volume was 557.1 billion yuan (as of 8 a.m. on the 11th), which is the same as in 2021 (Tmall’s Double 11 total transaction volume was 540.3 billion yuan). Yuan), a year-on-year increase of 8.45%. Among them, the clothing, shoes and bags category is still the core consumer category with the most intense competition and the highest proportion of sales.
Even in the autumn and winter of 2022 when the general environment is down, disposable income is decreasing, and shopping desire is declining, the transaction volume of the e-commerce shopping festival has set a new historical record, which shows the consumption potential and huge value of Internet + clothing .
While online product consumption in the apparel industry is increasing, apparel companies are also actively integrating and applying Internet information technology in product design and production to optimize product structure.
Therefore, the deep integration of the apparel industry and the Internet may increase the profitability of apparel companies to a certain extent. Actively using software to manage the purchase, sale and inventory process, exploring private domain traffic methods, and selling goods online are the general trends in the clothing industry.
3. Forecast of the epidemic situation in 2023
Zhang Wenhong, director of the Department of Infectious Diseases at Huashan Hospital Affiliated to Fudan University, said, “We need to be prepared for this round of epidemic for 2-4 months.”
Taking data from Singapore as an example, the case fatality rate of the COVID-19 epidemic is 0.06%, which is much lower than that of influenza. However, after Singapore relaxed its policies on January 1, case-related data did not reach a low point until April 15. The period lasts for about 4 months.
Therefore, after the epidemic prevention measures are fully optimized and relaxed in December, it is expected that my country’s new crown epidemic will shift to a low-level epidemic by March next year.
By then, the flow of people in the national clothing market is expected to resume prosperity, and consumer demand is also expected to reach a new peak. Clothing wholesale and retail merchants need to prepare in advance:
1. Do not rush for quick success; Lost the original intention of 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.
Whether it is clothing wholesale or retail merchants, from now on, they must actively explore the upgrading and transformation of their business models and reduce costs and increase efficiency, so that they can better seize the opportunities of market recovery.
Spring will eventually arrive. Are you ready to see the costumers here?
Data source｜National Bureau of Statistics, Dongguan Securities Research Institute, China Garment Association
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