[Home Textile Industry] Operation Analysis Of China'S Home Textile Industry In 2024

Since 2024, the global economy has recovered slowly, trade activities have recovered slightly, and the momentum of economic growth is slightly insufficient. Relying on the perfect industrial chain of China's textile industry and the global leading manufacturing advantages, as well as the implementation of a series of national policies to stabilize foreign trade and growth, the liquidity has been released, and China's household textile industry has maintained a stable operation as a whole. Foreign trade enterprises seized the opportunity of demand recovery in major export markets and reversed the negative growth trend in 2023. Driven by the national "two new" policies, the domestic sales of the industry are stable and show new highlights, and the domestic and foreign trade have maintained an overall growth trend.

　　 1、 Stable operation of the industry under pressure

In 2024, China's household textile industry as a whole maintained a stable growth trend. According to the data of the National Bureau of Statistics, the operating revenue of household textile enterprises above designated size has steadily increased in the past three years. In 2024, the operating revenue of household textile enterprises above designated size will increase by 2.02% year-on-year, gradually reversing the negative growth of the previous two years. At the same time, the comprehensive cost of the industry is also rising, and the profit space is squeezed. In 2024, the operating costs of household textile enterprises above designated size will increase by 2.46% year on year, which is higher than the income growth, and the three period expenses will increase by 0.81% year on year in 2023. The profit space of the industry has been squeezed: the total profit of household textile enterprises above designated size has dropped by 7.42% year on year. Since November, with the arrival of the traditional peak season of the industry and the gradual implementation of the national policy to boost consumption, the operating income of household textile enterprises above designated size has significantly increased, and the profit margin has shown a steady upward trend (Figures 1 and 2).

Figure 1. Trends of operating income, operating costs and total profits of household textile enterprises above designated size from 2019 to 2024

Source: National Bureau of Statistics

Figure 2. Trends of major economic indicators of household textile enterprises above designated size in 2024

Source: National Bureau of Statistics

The bedding, towel and cloth industry, the main sub industry of household textiles, also showed a slowdown in growth:

The profit of the bedding industry declined more year on year, and enterprises were under pressure to move forward. According to the data of the National Bureau of Statistics, the operating revenue of bedding enterprises above designated size will increase by 3.72% year on year in 2024; The total profit fell by 12.04% year on year, and the decline has gradually narrowed since September.

Figure 3. Trends of major economic indicators of bedding enterprises above designated size in 2024

Source: National Bureau of Statistics

From the historical data, in 2024, the operating revenue of bedding enterprises above the designated size showed a rising trend year on year, and the total profit experienced a shock and fall after the continuous growth since 2021, including the impact of high base and the impact of higher cost factors.

Figure 4. Year on year data of operating income, total profit and operating cost of bedding enterprises above designated size from 2019 to 2024

Source: National Bureau of Statistics

In 2024, the operating revenue of enterprises above towel size will decline 6.13% year on year, continuing the downward trend in 2023, and the decline will gradually deepen compared with the previous months; At the same time, affected by the favorable factors of cotton price fall, and the control of enterprises on labor costs, the operating costs of towel enterprises above designated size dropped 6.83% year on year in 2023; The total profit in the first three quarters grew better than that in 2023, and declined in the fourth quarter. The total profit in the whole year decreased by 6.54% year on year; The profit margin was 5.67%, showing a slow increase throughout the year.

Figure 5. Trends of major economic indicators of towel enterprises above designated size in 2024

Source: National Bureau of Statistics

The fabric industry has fluctuated slightly in the past two years on the basis of the previous high growth. From the perspective of the annual trend, the main economic indicators have gradually declined. According to the statistics of the National Bureau of Statistics, the operating income of fabric enterprises above designated size in 2024 will slightly decrease by 0.35% compared with that in 2023; Operating costs and three period expenses increased slightly overall; The total profit decreased by 6.67% year on year, but the profit margin was 6.66%, higher than the overall level of the household textile industry.

Figure 6. Trends of major economic indicators of textile enterprises above designated size in 2024

Source: National Bureau of Statistics

2、 Industry exports keep growing

According to Chinese customs data, China's export of household textiles will reach 48.49 billion US dollars in 2024, up 5.63% year on year. At present, the export scale of the industry has recovered growth after two consecutive years of decline in 2022 and 2023 (Figure 7). However, foreign trade enterprises are under pressure and export prices are falling, which to some extent reflects the compressed profit space. In 2024, the export volume of China's household textiles will increase by 12.61% year on year, and the export unit price will decrease by 6.08% year on year (Figure 8). According to the data in recent years, the unit price growth will show a downward trend. From the perspective of product category, the export of cotton products is weak while that of chemical fiber is strong; From the perspective of export market, the US and European markets play a major role in driving the development of the economy.

Figure 7. Exports of China's household textiles and year-on-year data from 2019 to 2024

Source: China Customs

Figure 8. Year on year trend of China's household textile export volume, amount and unit price from 2019 to 2024

Source: China Customs

Among the six main categories of household textiles exported by China, the export of bedding, fabric products, carpets and kitchen textiles will grow in 2024. Blanket products decreased slightly, and towel products decreased most significantly (Table 1).

Table 1. Data on China's six major categories of household textiles exports in 2024

Source: China Customs

In recent years, influenced by political and market choices, the export of cotton products has weakened while that of chemical fiber has strengthened. In 2024, China's export of chemical fiber home textile products will reach US $33.382 billion, up 7.23% year on year, accounting for 68.84% of the total export, 1.03 percentage points higher than the level in the same period of 2023; Cotton exports reached US $6.472 billion, down 4.44% year on year, accounting for 13.35% of the total exports, 1.41 percentage points lower than the same period in 2023 (Figures 9 and 10).

Figure 9. Information on the proportion of China's household textile export materials in 2024

Source: China Customs

Figure 10. Export Trend of China's Chemical Fiber and Cotton Bedding Fabrics from 2019 to 2024

Source: China Customs

The bed fabric products (sets of products) and towels among bedding products are the main export products of cotton household textiles, which typically reflects this development trend: in 2024, China's export of bed fabric products will be 5.457 billion US dollars, with a year-on-year growth of 9.07%, of which 57.22% are chemical fibers, and the export volume will increase by 12.15%, Compared with the average level in the past five years (54.87% in 2019-2023), the proportion increased by 2.4 percentage points; Cotton accounted for 26.47%, and the export volume decreased by 5.22% year on year, 1.3 percentage points lower than the average level in recent five years (27.8% in 2019-2023) (Figure 11).

After the implementation of the "border related act" of the United States in 2021, China's export of cotton household textile products to the United States has been impacted, and it is strong in the export of bed fabric products that use more cotton. In 2024, China's export of bed fabric products to the United States will be 1.9 billion dollars, with a year-on-year increase of 10.15%, including chemical fiber exports of 1.218 billion dollars, with a year-on-year increase of 11.05%; The export of cotton products to the United States continued to shrink. In 2024, the export of cotton products to the United States accounted for 16.78% of the total export of this category to the United States, accounting for 7.44 percentage points less than the average level of the past five years (24.22% in 2019-2023).

Figure 11. Trends of the proportion of chemical fiber and cotton in China's export of bed fabric products from 2019 to 2024

Source: China Customs

Figure 12. Trends of the proportion of chemical fiber and cotton in China's export of bedding fabric products to the US market from 2019 to 2024

Source: China Customs

In 2024, China's export of towel products will reach 2.13 billion US dollars, down 9.25% year on year. Towel products will show a downward trend since 2019, and the order backflow year in 2021 will briefly pick up and maintain a downward trend (Figure 13). There are many reasons for the weakness of towels, one of which is the fierce international competition. In the statistics of exported towel products, more than 90% of them are cotton. Due to the trade barriers and the fierce competition of India, Pakistan and other major cotton producing countries, China's towel products export advantage has gradually weakened. In addition, it is a more convenient and cost-effective alternative to superfine fiber, cotton towel and other wiping products. According to the statistics of the Association, chemical fiber based toilet and kitchen fabric products and wiping products have increased significantly and continue to trend in recent years. In 2024, the export of the above wiping products will reach 3.22 billion dollars, up 10.32% year on year.

Figure 13. Trends of China's exported towel products and wipes from 2019 to 2024

Source: China Customs

From the perspective of major export markets, China's exports of household textile products to other continents will increase in varying degrees in 2024, with the exception of Africa and Oceania, which will be mainly driven by the growth of the United States and the European Union. In 2024, China's exports to the United States and Europe will account for 38.08% of the total, accounting for 1.69 percentage points more than the same period in 2023, Among them, the export to the US market was US $11.912 billion, up 11.14% year on year, and the export to the EU market was US $6.553 billion, up 9.49% year on year (Table 2).

Table 2. Data of China's Household Textile Export Market in 2024

Source: China Customs

The ASEAN market also showed good growth. In 2024, China's export of household textiles to the ASEAN market totaled US $8.276 billion, up 5.88% year on year. However, it is worth noting that the export of household textile surface and auxiliary materials supports its growth. The overseas factory building layout of China's foreign trade enterprises has played an important role in the growth of surface auxiliary materials in the ASEAN region. In 2024, China's export of household textile surface and auxiliary materials to the ASEAN market will be 3.987 billion dollars, an increase of 18.46% year on year, while the export of household textile products will be 4.287 billion dollars, a decrease of 3.63% year on year, including 8.34% for bedding and 21.27% for towels. In addition, the growth of Japan, the traditional market, is sluggish. In 2024, China's export of household textiles to them will reach 2.616 billion US dollars, down 4.49% year on year.

　　 3、 Slowing growth policy helps boost domestic trade confidence

In 2024, especially since the second half of the year, due to the lack of endogenous consumption power, the per capita consumption expenditure has continued to fall. According to the data from the National Bureau of Statistics, the national clothing, shoes and hats, knitwear and textiles (including household textiles) increased by 0.3% year on year in 2024, of which the year-on-year decline in December was 0.3%. In 2024, the domestic sales output value of household textile enterprises above designated size will increase by 0.85% year on year (Figure 14).

Figure 14. Data on the growth trend of domestic sales output value of household textile enterprises above designated size in 2024

Source: National Bureau of Statistics

The domestic sales of bedding, towel and cloth in the three major sub industries are slowing down. The domestic sales of bedding products are under pressure. According to the statistics of the National Bureau of Statistics, the domestic sales output value of bedding enterprises above designated size in China will increase by 2.27% year on year in 2024, mainly driven by the growth in December. Throughout the year, the domestic demand market is under pressure; Judging from the trend of domestic sales in recent years, the domestic sales of bedding industry has maintained a slow and progressive growth in recent two years. The domestic sales of towels further contracted. In 2024, the domestic sales of enterprises above designated size of towels will decline by 8.10% year on year, which is further deepened than that of the previous months. In addition, from the perspective of recent years, the towel industry as a whole will continue to shrink. On the basis of high growth in recent years, the domestic sales of the fabric industry will slow down in 2024, with a slight decrease of 0.01% compared with the same period in 2023 (Figures 15 and 16).

Figure 15. Data on the growth trend of domestic sales output value of bedding, towel and fabric enterprises above designated size in 2024

Source: National Bureau of Statistics

Figure 16. Data on the growth trend of domestic sales output value of bedding, towel and fabric enterprises above designated size from 2019 to 2024

Source: National Bureau of Statistics

Affected by the weak domestic demand market, the operation of home textile enterprises is under pressure, and the performance of listed companies also reflects this situation. The operating income and net profit of four main board listed household textile enterprises specializing in domestic market, namely, Luolai Life, Fuanna, Mercury Home Textile and Mengjie, declined year on year in the first three quarters of 2024 (Table 3 and Table 4).

Table 3. Operating revenue and net profit indicators of main board listed bedding enterprises in the first three quarters of 2024

Source: financial reports of listed companies

Table 4. Net interest rate data of main board listed bedding enterprises in the first three quarters of 2019~2024

Source: financial reports of listed companies

At the same time, in the environment of weak consumer market as a whole, leading enterprises in the industry have shown good pressure resistance and development resilience. Continuous efforts have been made in brand building, channel layout, R&D innovation, management system, etc. Compared with the historical level, the gross profit margin of the enterprise is still at a healthy level. Luolai Life vigorously promoted retail innovation and increased the efforts to open direct stores. In the first half of the year, 49 new direct stores were opened. At the same time, it adhered to the ultra soft positioning and continued to provide consumers with visual and perceptible ultra soft bedding. Fuanna continues to improve the retail management ability of offline stores, while increasing the layout of online live broadcast, and relying on retail data insight and consumer demand analysis, it focuses on "oriental aesthetics" and "technology empowerment" to meet consumer demand and lead the sleep life. Mercury Home Textile continuously optimizes and improves its brand image, and strengthens brand mental cultivation through marketing methods and brand communication strategies. Mengjie Shares adjusted its organizational structure, broke through online and offline business barriers, and gathered resources to achieve integrated development.

Table 5. Gross profit rate data of main board listed bedding enterprises in the first three quarters of 2019~2024

Source: financial reports of listed companies

Policies boosted consumer confidence, and domestic trade in the industry showed new highlights. In 2024, the State Council launched the "Promoting large-scale equipment renewal and consumer goods trade in", which is an important measure to accelerate the construction of a new development pattern and promote high-quality development. The provinces and cities that have participated in government subsidies in 2024 include Shanghai, Anhui, Jiangsu, Longyan, Fujian and other home textile industry clusters. At the end of September, Shanghai officially included household textile products in the scope of subsidies, covering 102 offline department stores, supermarkets and specialty stores of household textile enterprises, more than 100 online flagship stores and POPs selling household textile products on various e-commerce platforms, and 4 enterprises marketing on WeChat applet. Luolai 76 stores, Sanqiang 48 stores, Mercury 26 stores, etc., have started operation in early November. Through overlapping discounts, strengthening publicity and combining "Double 11", "Double 12" and year-end promotional activities, the turnover of enterprises in November has significantly increased, and many enterprises' turnover in the month has increased by more than 35% month on month. In addition, Nantong City, Jiangsu Province, as a key area of the household textile industry, also started the enterprise application for related subsidy activities in November.

At the same time, helping to improve consumer confidence is also the key to improving the consumption environment. In the "Questionnaire Survey on Enterprise Operation and Management" in the fourth quarter, household textile enterprises said that under the promotion of subsidy policies, the orders and product output of enterprises had significantly increased, and the proportion of enterprise profits was relatively large. However, expectations for the next stage were still cautious, and they believed that the proportion of enterprises whose orders would decrease in the next quarter was greater than that of enterprises whose orders would increase.

　　 4、 Trends and prospects

At present, global trade as a whole is in the process of recovery, and there are still many uncertain factors in the external environment such as trade frictions, which are likely to have a joint impact on developed economies; Unstable demand in emerging markets brings risks to the industry in exploring new markets. China's household textile industry in the next period of time will also be opportunities and challenges. The export of chemical fiber household textiles in China is still in the construction stage because the related industries in the substitute countries are still in the construction stage, and the production capacity cannot meet the market demand in the short term, but has advantages in terms of price and production capacity.

In terms of domestic trade, the fundamentals of China's long-term economic stability and improvement have not changed. With the release of liquidity from the national steady growth series of policies, the further implementation of the policy of "large-scale equipment renewal and consumer goods trade in" will also help enterprises' investment and residents' consumption. The key to improving domestic demand is to further expand and strengthen the support of subsidies and other policies for the industry, promote the improvement of the consumption environment, and boost confidence. Focusing on expanding domestic demand, we should focus on exploring the scientific and technological leadership and fashion innovation in the field of household textiles, improve the added value of products and services, and give play to competitive advantages. Strengthen the development of high-performance, green and environmentally friendly products, further reduce costs, improve quality and increase efficiency, develop new quality productivity in the industry, and focus on R&D innovation and industrial integration and development.

Looking forward to 2025, the international macro environment is still complex and changeable. Enterprises in the household textile industry should also improve their awareness of industrial security risks, attach importance to original innovation, establish a leading foundation, stabilize trade channels, and enhance the core competitiveness of the industry. At the same time, we should also actively carry out a reasonable global layout, apply cross-border e-commerce model to explore new growth points in the market, accelerate the integration of industrialization and industrialization, carry out technological innovation, and seek breakthroughs in changes.

(Source: Zhongjia Textile)