Humen'S Garment Industry Is Caught In A "Hollow" Dilemma.

In September 12th, under the influence of the outer circulation of Typhoon "mulanti" on the tenth typhoon this year, the Humen town of Dongguan, Guangdong, began a continuous drizzle.

Nevertheless, Mei Yanhua, who was the boss of a small garment processing factory, got up early in the morning and arrived at the store in the international women's clothing store of Tai Ying Dong.

Tai Ying Oriental International Women's wear city

Today, Humen has been hailed as China's most influential "clothing capital".

Every day, tens of thousands of dealers across the country come in, shuttling in vehicles and people.

As one of the eight pillar industries in Dongguan, Humen garment manufacturing industry has annual output value of over 50 billion yuan.

Previously, the price of Dongguan clothing has been well known to the world. But when the reporter came to Humen, he was still deeply shocked by the price of clothing which was even lower than that of the financial crisis in 2008: the T-shirt with a wholesale price of 3 yuan, 5 yuan a shirt, and 10 yuan denim trousers.

It is reported that the clothing industry profits in Dongguan dropped from 1.4% to 0.4% today.

Behind the ultra low price sell-off is the great sadness of the "clothing capital".

At the very least, there is no way out for the local garment industry.

Manufacturers feel despaired of profits.

Mei Yanhua's clothing processing plant is small in scale, and has only 20 workers. Besides producing and selling all kinds of T-shirts and jeans, it also receives orders from other enterprises from time to time.

At the same time, she opened a store on the two floor of Da Ying women's clothing city.

The reporter saw that the price of all kinds of T-shirts in the shop is different, but the most obvious is the short sleeved women's T-shirt placed at the door and wholesale price only 3.5 yuan.

"This T-shirt usually requires at least 100 pieces of bulk to get such a low price.

If the volume is large, we can sell 3 yuan for one piece. "

Mei Yanhua told reporters.

At the time of clothing changing season, there are still many businessmen like Mei Yanhua selling the short sleeved T-shirts at the lowest price in the women's clothing market.

Apart from Mei Yanhua, Shu boss is also engaged in the wholesale business of clothing.

Shu boss has his own garment processing factory in the town, in addition to the order of foreign trade, most of the time are manufacturers directly sell wholesale T-shirts.

"Wholesale 200 or more, I can give you a price of 3.8 yuan."

Seeing the reporter asking price, Shu boss enthusiastically soliciting business.

But even at such a low price, it is alleged that 20 thousand of his T-shirts are still sold out in his warehouse.

Shu boss said that these upcoming T-shirts are in stock in the past, and some are new this year.

For most of the garment factories that can not sell out of stock, low price promotion is a helpless choice, even if it is only a few cents' profit, even sometimes they will sell at a loss.

"There is no way out.

In Humen, as many as thousands of processing factories like ours, a garment machine can produce about 100000 T-shirts in one month. You can imagine how fierce the competition is and the price will not be raised. "

Mei Yanhua told reporters that during the time of the financial crisis, Humen's textile and garment industry suffered heavy losses, and foreign orders were reduced. Therefore, most garment processing factories began to turn their attention to the domestic market.

When asked how to make money for such a cheap T-shirt, Mei Yanhua said: "If profits are too low, we can only earn money by" taking the volume ".

But even so, she is still desperate for ever smaller profits.

Export situation improves and business profits increase

At the gate of Tai Ying Dong International Women's wear city, Zhang Shifu, a porter, is moving the goods from the owner's wholesale clothing to the trailer, and a row of small vans left for rent is still on the street not far away from him.

Zhang said that the T-shirts were mainly exported to Sichuan, Guizhou and Jiangxi, and sold well in some local villages and towns.

Over the past few months, many mainland businessmen have bought this T-shirt in large quantities.

This seemingly cheap T-shirt, after being pported to the rural market in the mainland, can sell five or six times higher than the wholesale price in a flash.

Zhang Wei, a clothing dealer from Wanzhou, Chongqing, said that this T-shirt can sell the price of 20~30 yuan in towns and townships, while a pair of jeans with a cost of only 20 yuan can be sold to 80~100 yuan.

"A friend of mine used to earn about 200000 yuan a year by selling clothes made in Dongguan on the town.

With the persuasion of my friends, I started the clothing business.

In the eyes of outsiders, the clothing industry, which sells in large quantities in the rural market of the mainland, has huge profits. But in the view of Humen bosses such as Mei Yanhua, the profits are only the retailers and stores at the end of the industrial chain, but not with themselves.

"My customers often earn tens of dollars in one piece of clothing, and we only have a few cents for wholesale."

Mei Yanhua's tone contained some complaints.

According to her introduction, after the increase of manual wages and cloth costs, the cost of tax collection, storage management and store rentals is removed, and the profits of wholesale jeans are usually only one or two yuan, and the lowest is even 3 cents.

Seeing the astonishment of the reporter, Mei Yanhua added, "you may not believe that profits are so low, but that's the fact."

Mei Yanhua said, I am afraid it is not empty talk.

When reporters visited many businesses, they heard the most complaints about too little profit.

A businessman named Wu said, "today you think it may be wholesale at the lowest price, but others may be lower than you tomorrow, and finally there is no room for making money."

He said that during the off-season, a pair of trousers earned only 1 cents.

At that time, the financial tsunami made the export of "world factory" represented by Guangdong and Zhejiang drastic, and the stock was also rising steadily.

"After the outbreak of the economic crisis, we rarely received export orders.

Last year, many garment processing enterprises were shut down. We insisted that the factory was not lucky to fall off.

Recalling the situation at that time, Mei Yanhua still has a lingering fear.

It is understood that as the main garment production base in China, there are more than 300 garment export processing factories above Humen, more than 600 private factories, and nearly 100 other weaving factories, such as weaving, bleaching, dyeing, zipper and embroidery.

In last year's "severe winter", many enterprises fell or moved inland to save costs, and Mei Yanhua's clothing processing factory was considered one of the lucky ones.

With the economic recovery, China's textile and clothing export situation is gradually warming.

In the first half of 2010, the total export of textiles and clothing reached US $91 billion 345 million, an increase of 22.26% over the same period last year.

Although trade volume and retail sales are increasing, interest rate growth has not been brought to garment production and processing enterprises.

In response, Shu boss complained: "the orders we sell to the mainland in recent months are indeed increasing, but the mainland buyers have a relatively small number of single passes, and they also keep the price down very low, otherwise they will not buy your goods."

In fact, according to the National Bureau of statistics, consumer prices rose by 2.8% in the month of 2010 1~8, but clothing prices dropped by 1% over the same period last year.

US Customs Statistics 1~6 this month also showed that 82 types of products appeared to increase in volume and price drop in 155 categories of textile products exported to the US, accounting for 73% of the total export volume.

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Difficult industrial chain predicament

Why did the profits of the processing enterprises continue to decline in the first half of the year when the export orders for garment industry continued to grow? The daily economic news reporter found in the interview that because of the rising prices of raw materials such as cloth, Humen's local clothing production and processing enterprises are increasingly sad.

"Last year cotton yarn price is only 12000 yuan per ton, now it is more than 18000 yuan."

Specializing in jeans production wholesale Ouyang revealed.

In fact, since the end of last year, international cotton prices have been rising.

According to China's cotton price index, the average price of standard cotton in 2009 was 12831 yuan / ton. In early September this year, cotton prices once rose to 18419 yuan / ton, up 43.5%.

When the upward trend of cotton prices in the upper reaches is pmitted all the way, it will soon extend to all the raw materials and processing fields of the textile industry.

But in the face of fierce market competition, the clothing production and processing enterprises in Humen can not release the pressure of cost increase to the downstream, but continue to be squeezed by retailers, and thus get into the predicament of the industrial chain.

"Raw material prices have gone up, our factory price should have risen correspondingly, but the room for growth is extremely limited, and it can only go up a few cents."

If it goes too high, it will be difficult to establish a relationship customer who will run to other manufacturers. "

Ouyang said that there are many manufacturers, the competition is cruel, and sometimes, in order to maintain stable customers, they have to make profit to the business.

In fact, most of the garment production enterprises in Dongguan have low production technology content, poor design ability, and low profit industries.

As a result, the increase in raw material costs, coupled with the increase in prices of retailers, many manufacturers have to swallow the bitter pill of increasing profits.

In addition to the cost of raw materials, more than 10 provinces and autonomous regions such as Guangdong have raised the minimum wage since the beginning of this year, with an average increase of around 17%.

The growth of human cost has also become a sharp sword hanging on the heads of many small and medium-sized processing enterprises.

In two months, the fourteenth China (Humen) International Fashion Fair will be held in November. This is a good marketing opportunity for Humen's textile and garment enterprises.

Mei Yanhua said she hoped that the clothing trade fair would bring more orders. In her view, small profits and quick turnover remained the only market credo that had been followed by garment factories for many years. Besides, she could not think of a better way to improve her profits.

In fact, although Dongguan has a mature garment production and processing industry chain and industrial clusters, many manufacturers are not optimistic about the future when the industry is facing difficulties.

"I don't know how long this business can last."

Ouyang told the daily economic news that some of the manufacturers he knew had plans to change careers.

Nowadays, the clothing industry in Dongguan is facing a huge crisis.