Home Textile Industry Pattern Shuffle, Specialization+Personalization Is The Way Out

Statistics show that since the first half of last year, the sales growth of China's home textile industry has declined month by month. In the first two quarters of 2012, a number of home textile giants, including Luolai Home Textile and Mengjie Home Textile, experienced different degrees of decline in performance growth Inventory rise And so on.

A person in charge of a home textile enterprise said that the whole home textile industry was facing a general decline in sales performance. With the increase of inventory pressure of major enterprises, many problems such as serious homogenization and imbalance of industrial structure were exposed, which led to the urgent need for Chinese home textile enterprises to break the dilemma.

　　 The sales market is sluggish

In the past few years, China's home textile industry has been in a rapid development period driven by strong domestic demand, and the high export growth for several consecutive years has given birth to a number of industry giants and listed companies. Data shows that the average annual output of China's home textile industry is up to 654 billion yuan, with an average annual growth of 20%, and it is listed as one of the high growth industries in China. The past decade has been called the golden decade of the textile industry.

However, with the data released by several textile industry giants this year, China's home textile market began to show an overall downturn. According to the interim report performance revision announcement released by Luolai Home Textile in the middle of July, the net profit attributable to shareholders of listed companies fell 17.70% year on year, to 134 million yuan. Before that, there was a big change compared with the company's expected growth of 0% to 30%.

Mengjie Home Textile and Fuanna, also known as the three giants of home textile, are not optimistic about their business status. Since the 2012 Mid term Reports of the above two companies were disclosed in the middle and late August respectively, the data reporters in the first half of the year did not grasp them. However, according to the 2012 first quarter report of Mengjie Home Textile, the company realized an operating income of 268.81 million yuan, a year-on-year decrease of 9.93%. There was negative growth.

Compared with the depression of the three giants to varying degrees, other home textile enterprises are also having a hard time. A person in charge of a home textile enterprise in Haimen City told reporters by phone: "The tycoons are having a hard time. Our small and medium-sized enterprises, which are not doing very well, are operating in a miserable way."

The home textile industry was once known as the "safe haven" of China's economy, and has experienced a sweet high-speed development period in 2011. However, why did it suddenly get cold less than a year later?

"The sales of the home textile industry can be broadly divided into export and domestic demand, and the main driving force of domestic demand can be divided into three major parts - relocation, wedding celebration, and renewal. In 2011, the market share was 21%, 16%, and 63% respectively." Lin Xiaoli, a senior researcher of Qianxun Consulting, told reporters that compared with the rapid development of last year, The decline in sales performance of the home textile industry in the first two quarters of this year is precisely due to the two-way contraction of exports and domestic demand.

Lin Xiaoli analyzed that because the three major overseas markets - the United States, Europe and Japan - were affected by the financial and sovereign debt crisis and other factors, the demand for home textile products shrank, while India and Pakistan split some orders. The market has become smaller, but competition has intensified.

"The continuous regulation of the real estate industry has also had an impact on the domestic demand market of the home textile industry." Lin Xiaoli believes that the important support point of the home textile industry is domestic demand. The state's regulation of the real estate industry is extremely strict this time, which has seriously hurt many industries associated with the real estate, and the home textile industry is inevitable.

"In the first two quarters of 2012, the performance of the entire home textile industry declined severely. The main reason was the downturn of the real estate industry. In 2011, the real estate regulation affected the downstream supporting industries, and consumer confidence was affected." Gao Xiaoshi, an analyst in the home textile industry of the forward-looking industry research institute, who also held the above view, told reporters that at the same time, labor costs The rising channel costs have led to rising product prices, and consumers have correspondingly reduced the frequency of renewal and replacement, reducing the consumption of home textile products.

　　 Risk of overheated investment

Although the data shows that China's home textile industry is facing many difficulties, the enthusiasm for continued expansion and new investment projects around the country has not decreased. Recently, Nanchong has introduced Fuanna Home Textile to build a production base with an investment of 300 million yuan, Qixiang Silk Industry to build a silk production base with an investment of 250 million yuan, and Mida Group to build a number of home textile projects with an investment of 200 million yuan for ultra fine denier silk and 10000 ton nylon production projects.

In Tianjin, the International Home Textile City in the Light and Textile Economic Zone was listed as a key construction project this year. In the near future, an enterprise with a total investment of 600 million yuan settled in Shuyang's textile industrial park, which is known as 10 billion level. According to the statistics of the National Development and Reform Commission, in the first five months of 2012, the textile industry has accumulatively completed fixed asset investment of more than 5 million yuan projects of 260.958 billion yuan, an increase of 18.53% year on year, and the growth rate has dropped 17.69% year on year; 5759 new projects were started.

"One side is Enterprise sales On the one hand, there are hot new projects. The home textile industry is a bit incomprehensible. " An insider told the reporter that over the years, China's home textile industry has seen several investment booms, including the follow-up investment of existing enterprises and the investment of other industries. Even though the export situation is very serious this year, the boom of production expansion has never stopped.

"From the perspective of the life cycle of the whole industry, the home textile industry is in the growth stage, but there is indeed a structural imbalance in the home textile industry, rather than the whole industry being saturated and entering a recession period." Gao Xiaoshi, an analyst in the home textile industry of the Prospective Industry Research Institute, believes that if the new project is not high in technology, the design of overcapacity is not consistent with the consumption level, It will intensify the vicious competition in the industry.

"Since the industry is in the growth stage, expansion and new investment in home textile projects belong to the normal development trend of the industry." Gao Xiaoshi believes that the decline in the growth rate of fixed investment in textile industry projects from January to May shows that the upsurge of starting projects has weakened.

As for the voice of concern about the overinvestment in the market, Yang Zhaohua, president of the China Household Textiles Industry Association, said in an interview with reporters that the home textile market is market led investment, not government led, so there will be no problem of overinvestment. "The market is in pursuit of interests. Where the market funds are invested indicates that the funds think it is profitable."

Similarly, Lin Xiaoli, a senior researcher of Qianxun Consulting, believes that launching a new project shows that the whole industry is optimistic about the market prospect. "Due to the low concentration of the industry market, in the future more intense market competition in the home textile industry, second and third tier brands may be among the first tier brands, which has encouraged enterprises in the industry to continue to expand." Lin Xiaoli told reporters that most of the new projects launched recently are high-end projects. At present, the competition for overcapacity of low-end products in the home textile industry is fierce, while the high-end market is relatively loose. In recent years, the proportion of high-end product consumption in the total consumption has increased significantly. It is a reasonable move for powerful enterprises to identify this market segment for expansion.

However, Zhu Qinghua, a light industry researcher at CIC Consulting, said in an interview: "In the face of many difficulties in the development of the entire industry, some enterprises not only do not reduce their scale, but instead expand their scale and expand blindly, which is very detrimental to the long-term sustainable development of enterprises, and enterprises may even fall into production suspension due to large-scale losses. If enterprises want to become bigger and stronger, they can take this opportunity to carry out mergers and reorganization within the industry, rather than continue to expand production capacity. "

　 Inventory pressure forces domestic demand

In fact, it is because the market is generally optimistic about the home textile industry that capital flows in rapidly. The high export growth for many consecutive years has also injected a strong needle for rapid expansion into many enterprises. However, when both export and domestic markets are depressed, the pressure of product inventory is tightly pressing on enterprises and it is hard to breathe.

The semi annual report released by Luolai Home Textile on August 13 showed that the company's inventory reached 768 million yuan, up 48.50% year on year. In fact, since the middle of last year, the company's inventory has been rising. The high inventory is not a problem for Luolai Home Textile, and the other two of the three giants, Mengjie Home Textile and Fuanna, are also troubled by it.

Although the above two semi annual reports have not yet been released, the data released by Mengjie Home Textile in the first quarter of 2012 shows that the inventory has reached 405 million yuan, which is about 20 million yuan more than the 384 million yuan disclosed in the 2011 annual report. The inventory of Fuanna at the end of 2011 was 520 million yuan, up 25% year on year; The inventory amount accounted for 36%, although it declined, the inventory turnover rate was only 1.6.

In fact, the inventory pressure of the above three industry giants is just an embarrassing epitome of the high inventory of the entire home textile industry. Therefore, in the current situation of shrinking exports, expanding domestic sales has become the first choice for major enterprises.

"Inventory backlog is a major problem that seriously affects the development of enterprises. Solving inventory pressure is also the most concerned and troublesome problem for enterprises. This phenomenon is particularly obvious in the home textile industry." An industry insider told reporters that at present, home textile enterprises are selling normally half the time, while digesting inventory half the time.

"Inventory pressure has become a common problem in the industry," Chen Yunlai, chairman of Jiangsu Medelli Textile Co., Ltd., told reporters. This year, home textile enterprises will focus on expanding domestic demand, guiding residents' consumption of home textile products and reducing their dependence on the export market through product innovation, brand building and channel construction.

"Domestic demand is an important support point for the home textile industry under the situation of sluggish external demand and the industry's passive foothold in the international market." Lin Xiaoli, a senior researcher of Qianxun Consulting, believes that due to the broad prospects of the home textile market, a large number of private capital have set foot in the home textile industry, while clothing enterprises and fabric enterprises are also entering through the advantages of the industrial chain, First, the market demand is low; Second, the products of the enterprise are not well prepared, and the homogenization is serious, which can not meet the consumer demand well, and the pressure on the enterprise will gradually increase.

As for the pressure of enterprise inventory, Gao Xiaoshi, an analyst in the home textile industry of the Prospective Industry Research Institute, suggested that enterprises should increase publicity to cover different levels of consumption in an all-round way. In terms of channels, we can increase the scale of franchisees or direct stores, increase investment in online shopping, group buying and supermarket channels, and expand new channels. It can also adopt exclusive extension competition means, such as M&A strategy, to ultimately improve market share.

"Home textile enterprises often focus on how to solve the unsalable inventory through channel promotion and terminal promotion. The inventory backlog is ostensibly an inventory problem, but in essence it is a systematic problem of research and development, management, finance, marketing, market information feedback, and operation mode. To solve the inventory problem of home textile enterprises, we must address both the symptoms and the root causes from the inside out."

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　　 Industry reshuffle or unavoidable

There is no doubt that at present Home textile industry It is facing many difficulties, but this is closely related to the blind investment of the enterprise itself and the expansion of low-end products.

As home textile is in the development period in the past two years, its huge potential has been optimistic by the market. The outbreak of the economic crisis has caused many industries to suffer from export setbacks, but home textile has survived. So the capital of many industries began to enter the home textile industry, and a number of small and medium-sized home textile enterprises with low production capacity and weak scale have entered.

"There are more than 20000 enterprises in the home textile industry, most of which are attracted by the low threshold market and rely on the advantages of the industrial chain. The involvement of new enterprises and the increase of new practitioners has not brought new ideas and technologies to the industry, but is equivalent to repeated construction at the same level." Lin Xiaoli, a senior researcher of Qianxun Consulting, told the reporter that when the market situation was optimistic, almost all enterprises could make good profits. Once the market fell into a downturn, these enterprises did not have the ability to respond to the crisis themselves, and were nibbled by large enterprises in the second and third tier markets. They faced internal and external problems and were struggling. In the next few years, the home textile industry will inevitably be reshuffled.

"Although the scale of the home textile industry is huge, the market concentration is very low, and the lack of industry leaders is also the reason for the continuous expansion of powerful enterprises in the industry." Lin Xiaoli took out the data to say that the market size of the domestic home textile industry in 2011 exceeded 170 billion yuan, and the business income of the industry leader Luolai Home Textile was 2.38 billion yuan, but the market share was less than 2%, The market share of the top ten enterprises in the industry is less than 15% in total.

Lin Xiaoli believes that at present, the home textile industry has set a precedent for capital operation. In the future, it will enter a period of survival of the fittest. What large enterprises need to deal with is how to use the capital market to expand market share in this period. What small and medium-sized enterprises need to deal with is how to survive and develop better in this period.

However, Gao Xiaoshi, an analyst in the home textile industry of the Prospective Industry Research Institute, believes that "because the technical threshold of the home textile industry is not high, it is better to rely on the development characteristics of the enterprise itself to optimize and reorganize the internal resources of the enterprise to become stronger and larger than to spend higher costs on mergers and acquisitions to purchase technology."

"Since China's home textile consumption has not yet formed a stable consumption mode, the competition in the domestic home textile industry shows the characteristics of low industry concentration, unclear regional characteristics, and not yet forming a national leading brand. Although there are 20000 enterprises, there are only 50 enterprises with an output value of more than 100 million yuan." Gao Xiaoshi believes that there are few enterprises with high value-added home textile products at present, This is a good opportunity for many enterprises to develop. As for the call for industry restructuring, Chen Yunlai, the chairman of Jiangsu Medelli Textile Co., Ltd., believes that as the capital market begins to enter China's home textile industry, the home textile industry will undoubtedly eventually enter a period of elimination of the fittest.

　 Industrial dilemma to be solved

"Rome wasn't built in a day. The home textile industry is currently facing many difficulties, and the prospect of getting stronger and breaking out of the tight encirclement is not optimistic." The above industry insiders, who consider themselves industry pessimists, told reporters that in the short term, in addition to intensifying competition in the market itself, the design style characteristics among industry giants are not obvious, losing national characteristics. The difficulty in competing with European manufacturers in terms of quality and design is also a major factor in the decline of export and domestic sales.

At the same time, many small and medium-sized home textile enterprises have implemented the principle of "bringing", and the phenomenon of direct copying is common in both the product itself and the enterprise model.

In addition, medium and low-grade products are overproduced, while the proportion of high-tech and high-value added products is low. With the decline of sales, the weakening of independent brands, weak innovation ability and other industrial structural problems have been fully exposed. The superposition of old and new problems in China's home textile industry makes the home textile industry seem to be in peril.

However, Chen Yunlai, chairman of Jiangsu Medelli Textile Co., Ltd., does not agree with the above argument. In Chen Yunlai's view, after nearly 20 years of development, Chinese home textile brands have begun to break the previous phenomenon of blindly imitating European and American styles. More and more home textile enterprises have begun to attach importance to product research and development and design. The deepening of brand awareness of home textile enterprises has made more and more functional bed products in China's home textile industry, Technological innovation has become a sharp tool for many home textile brands to break through.

Different from the optimism of business operators, senior researchers in the home textile industry have different views.

"China's home textile industry is on the verge of a reshuffle. There is a clear differentiation between the strong and the weak. Some enterprises that have not formed brands rely on low prices to impact the market. Product quality is not guaranteed and will be phased out in the competition. Industry leaders with strong brand power, leading design, excellent supply chain management, and strong channel resilience will gradually win." Gao Xiaoshi believes that in the face of the rapidly changing external environment, home textile enterprises should stand at the top of the industry, take the overall situation and judge the trend of the overall situation. With the acceleration of urbanization, the consumer market, including home textiles, will inevitably be boosted. Therefore, in the future, more market space will be in China, and expanding the domestic market share is a breakthrough strategy.

"The future development of the home textile industry is mainly reflected in the provision of specialized and personalized products and services. To truly develop in this regard, enterprises need to form their own core competitiveness and reflect differentiation." Zhu Qinghua, a researcher in the light industry of CIC Consulting, believes that enterprises should increase investment in product research and development on the premise of expanding domestic demand, Continuously improve production technology, improve the professional quality of employees, and make products truly acceptable and liked by consumers.

"Home textile products are necessities of life, and the market is there. The problem is how enterprises cooperate to guide market growth and how enterprises compete to seize a larger share." Lin Xiaoli believes that the dilemma and action is a big proposition. "It is not only necessary for enterprises to adopt product design differentiation, multi brand construction, terminal service experience differentiation and avoid homogenization, but also more difficult for most small and medium-sized enterprises to break through the tight encirclement on their own. It is more necessary for the government and industry associations to actively guide these enterprises to find the right position and make refined products, professional products and unique products.