In 2023, in the face of a more complex and challenging external environment, China's clothing industry forged ahead with determination as it climbed over obstacles and persevered in overcoming difficulties, and successfully withstood unprecedented severe tests.
Entering 2024, the industry is witnessing new opportunities while also facing significant challenges and uncertainties. How can clothing enterprises that are in the midst of the transformational wave forge ahead? This has become the most pressing topic of concern within the industry.
In 2023, the external environment faced by China's clothing industry became even more complex and severe. Global economic growth slowed down, international market demand contracted, and the negative effects brought about by geopolitical conflicts are profoundly impacting the development of foreign trade. The pressure on China's clothing exports has significantly increased. The domestic macroeconomy has shown signs of recovery and improvement. Under the impetus of a series of policies implemented by the state to expand domestic demand and promote consumption, consumer demand has gradually been released, and the domestic clothing market has continued to recover. At the end of the year and the beginning of the new year, Chen Dapeng, the vice president of the China Textile Industry Federation and the president of the China Clothing Association, analyzed the development status of China's clothing industry from multiple aspects.
Resilience in the face of pressure
Regarding the development of the clothing industry in 2023, Chen Dapeng believes that although the Chinese clothing industry is experiencing a slowdown in growth, the main operational indicators such as production, efficiency, and investment have not reversed the negative trend. However, there has been a notable marginal improvement. The foundation for the recovery of the industry's economic operation has been consolidated, and the positive factors driving the industry's stable and positive development are constantly increasing, which will provide strong support for the high-quality development of the industry.
According to data from the National Bureau of Statistics, as of November 2023, there were 13,643规模以上 enterprises in the clothing industry in China. From January to November, the industrial added value of the clothing industry decreased by 8.3% year-on-year, with the decline rate narrowing by 0.5 percentage points compared to the first nine months； the operating income reached 1，086.64 billion yuan， a year-on-year decrease of 6%， and the total profit was 52.79 billion yuan， a year-on-year decrease of 4.8%， with the decline rates narrowing by 2.1 and 2.4 percentage points respectively compared to the first nine months； the operating profit margin was 4.9%， an increase of 0.5 percentage points compared to the first nine months； the fixed asset investment completed in the industry decreased by 3.4% year-on-year， with the decline rate narrowing by 1.3 percentage points compared to the first nine months.
From the perspective of the international market, according to China's customs data, from January to November 2023, China's cumulative export of clothing and clothing accessories reached 145.2 billion US dollars. Although China's clothing exports to the United States, the European Union, and Japan have decreased, the export performance to some emerging markets has been outstanding, and the export market structure has been accelerating its adjustment. From January to November, China's clothing exports to the countries participating in the "Belt and Road Initiative" increased by 2.1% year-on-year, contributing 0.6 percentage points to the growth of China's clothing exports. Among them, the export volume to Kazakhstan increased by 71.3%; China's clothing exports to Africa increased by 14.8%, and its clothing exports to Russia increased by 14.5%.
From the perspective of domestic market sales, as consumption scenarios have fully recovered and residents' income and consumption confidence have gradually rebounded, it has driven the vitality of the domestic sales market within the clothing industry to continuously emerge and maintained a rapid growth momentum. According to data from the National Bureau of Statistics, from January to November 2023, the retail sales of clothing by units above the designated size increased by 13.8% year-on-year, and the online retail sales of clothing items increased by 9.2% year-on-year. The retail sales and retail volume of clothing products in key large-scale retail enterprises across the country increased by 17.2% and 9% respectively year-on-year.
"The development of the entire industry in 2023 was indeed not easy," said Chen Dapeng. "Changes in industries, markets, and consumption have been accumulating continuously. The clothing industry is facing significant challenges. The operating pressure on enterprises has been increasing steadily, especially for the numerous and widely distributed small and medium-sized enterprises, which are having an even more difficult time."
Chen Dapeng stated that although the economic operation of the industry and enterprises is under severe pressure, a large number of enterprises in our country's clothing industry have risen to the challenge, focusing on the foundation and strengthening internal capabilities, enhancing innovation and transformation and upgrading, and promoting the development of the clothing industry towards higher-end, intelligent, green and integrated directions, presenting new characteristics of high-quality development.
In Chen Dapeng's view, although China has established the world's largest industrial system with the most complete industrial chain, and has formed international competitive advantages in areas such as production manufacturing, new technological innovation application, and business model transformation, the Chinese clothing industry still has shortcomings in design creativity, product development, process technology, high-quality manufacturing, lean management, and brand building. Enterprises and brands need to focus on their core competitiveness for improvement.
"By integrating the advantages of modern technology and forming systematic innovation capabilities in the industry, it is possible to lay a solid industrial foundation for innovation and development, especially for building world-class enterprises and brands," said Chen Dapeng. In the new development period, the key to making the industry grow from large to strong is to take building a modern industrial system as the core and comprehensively promote "advanced industrial foundation and modernized industrial chain".
Opportunities outweigh challenges.
In 2023, although the industry is facing considerable pressure, in the current and the coming period, China's clothing industry is still in an important strategic opportunity period and is enjoying new benefits of the digital economy era.
In Chen Dapeng's view, since 2023, the vigorous promotion of the country's strategy to expand domestic demand has injected impetus into market expansion. In particular, the country's emphasis on modern manufacturing and the construction of a modern manufacturing system has stimulated the confidence and vitality of enterprises.
The new round of technological revolution is accelerating, which will further promote technological innovation to reshape the structure of the clothing industry and drive the industry towards digitalization, intelligence and networking. Relying on the world's best industrial foundation and accumulated industrial resources, China has the most solid foundation and conditions to establish a brand-new and more competitive new advantage in the global clothing industry landscape. Chen Dapeng said, "The upgrading of consumption and the transformation of consumption have brought broad development space to the industry and have become an important engine for new development. Especially, the cultural confidence of Chinese consumers has been continuously strengthening, and their pursuit of fashion with Chinese cultural propositions has also provided important value support for the industry's cultural creativity and brand development."
"We also face many challenges," Chen Dapeng emphasized. "From the perspective of the international market, on one hand, the global market growth is sluggish, which brings certain pressure to the industry's development. On the other hand, with the accelerated pace of global industrial pattern adjustment, the increasingly fierce competition poses greater challenges to the industry's internationalization process and development. At the same time, our country is entering a critical stage of transforming the development mode, optimizing the economic structure, and converting the growth momentum. This puts higher demands on the innovation of internal organizational models, mechanisms, and the continuous transformation of value creation methods within enterprises."
In Chen Dapeng's view, the clothing industry should take a holistic approach, seize opportunities, and establish a development model that suits its own conditions and endowments. It should integrate and innovate industrial resources and achieve iterative development in the rapidly changing competitive environment.
"First, accelerate digital transformation. While optimizing marketing online and integrating online and offline operations, we should also intensify the digitalization of infrastructure, especially by applying digital technologies, network technologies, and automation technologies in the manufacturing sector, to enhance the flexibility of industrial manufacturing and the ability of resource allocation and industrial integration innovation, and promote the gradual realization of intelligent production, management, and operation in the industry, thereby building a more competitive new advantage for the industry and accumulating new energy. Second, adapt to the personalized demands of the consumption market. Further refine market positioning, actively build a brand development system that is compatible with the new era market, and particularly focus on basing on the international cultural background, strengthening the exploration, integration, and transformation of traditional Chinese excellent culture. Third, implement the sustainable development concept. Oriented by the 'dual carbon' goal, explore the sustainable development of the industry." Chen Dapeng said.
In Chen Dapeng's view, after 40 years of reform and opening up, China has basically established itself as a manufacturing powerhouse in the clothing industry. At this point, it has begun and accelerated the process of building itself into a fashion powerhouse in the clothing sector.
Chen Dapeng emphasized that the upgrading of industrial foundation is an industrial strengthening project, which is related to the foundation and capabilities of the industrial system. The modernization of the industrial chain refers to the digital transformation and upgrading of the industry, through the application of new technologies in all links of the industrial chain, promoting and triggering significant changes in industrial production models, organizational methods and business models. The innovation ability of enterprises comes from the improvement of basic capabilities, the promotion of scientific and technological innovation, and the support of industrial system modernization. Without the modernization of the industrial system, the construction of a fashion power loses its foundation. The construction of a fashion power must be based on the modernization of the industrial system.
High-quality development is the fundamental principle.
"The development of the industry follows a wave-like pattern and progresses in a tortuous manner. It also takes time to build consumer confidence. Against this backdrop, there are still many unstable and uncertain factors facing the clothing industry's development in 2024. Maintaining a stable and positive recovery trend still faces numerous challenges," said Chen Dapeng.
Chen Dapeng introduced that in accordance with the new direction set by the state for the development of industrial manufacturing, the China Textile Industry Association released the "Action Outline for Building a Modern Industrial System in the Textile and Apparel Industry (2022-2035)" in August 2023. It clearly defined the concepts, goals, and tasks of the modern industrial system construction, and proposed 7 specific action plans to drive the industry to move towards high-end, intelligent, and green development in the new development period.
Chen Dapeng emphasized that clothing enterprises and brands should follow the spirit and guidelines of the "Action Outline for Building a Modern Textile Industry System (2022-2035)", starting from the target consumer groups and market segments. They should individually build their own brand systems and enterprise operation systems, strengthen the cultivation of core capabilities, and create internal driving forces for the enterprises. This is the most practical methodology for the enterprises and brands to achieve sustainable development and meet the future challenges, and it is also the inevitable path for building China into a fashion powerhouse.
The slowdown of global economic growth, the weakening of consumer confidence, and the reversal of globalization are still constraining the improvement of the international market demand side. At the same time, the continuous complex changes in the layout of international industrial and supply chains pose great challenges to China's international trade in clothing. Although the domestic economy is expected to continue to recover and improve, the tasks of maintaining growth, adjusting structure, and promoting reform remain arduous. Especially in the context of shrinking external demand, domestic effective demand remains insufficient, and the pressure for efficiency restoration needs to be improved. This will continue to test the resilience and risk response capabilities of the clothing industry's development.
In response to this, Chen Dapeng put forward three suggestions for the innovation and development of clothing enterprises and brands.
First, we need to further change our development outlook. We should completely abandon the impetuous development approach and adopt a more pragmatic and stable approach. We should focus on optimization, strengthening, and further expansion. We should look inward and, in an uncertain environment, strive for certainty in ourselves. We should further return to the essence of industries and pay more attention to the improvement of efficiency and benefits, as well as adaptability changes. We should focus on lean management and take the path of specialization, uniqueness, and excellence. We should continuously enhance resilience.
Secondly, it is necessary to enhance comprehensive capabilities, especially the core capabilities of the enterprise. We should integrate technology, fashion, and green concepts more deeply into the operation of the enterprise, and comprehensively improve the capabilities of scientific and technological innovation, cultural creativity, and sustainable development. In particular, we should accelerate digital transformation, thereby promoting the enhancement of agile flexibility, organizational coordination, and value creation capabilities, and thereby bringing about the transformation, metamorphosis, and reengineering of the enterprise.
Thirdly, it is necessary to adapt to the new business logic. Conduct more in-depth research on changes in consumers and channels, shifting from focusing more on competition and models in the past to paying more attention to consumers and products, and from a competitive orientation to a consumer-oriented and stakeholder-oriented one. The business logic in the digital economy era is about symbiosis, sharing, and mutual assumption. Value is achieved through altruism, and integrates the enterprise value, consumer value, and social value, thereby achieving sustainable development.
"Realizing high-quality development is the fundamental principle of this era's development. Ultimately, the growth of enterprises must return to the original intention of industrial development, focusing on the improvement of the enterprises' own qualities and capabilities. Whether an enterprise is large and powerful, small and beautiful, or specialized and innovative, it all needs to continuously and firmly focus on deepening its efforts, using professional strength to continuously iterate and improve, adhering to professionalism and creating excellence. This is the underlying logic of the development of China's clothing industry in the new era, and it is also the necessary path to achieve the value leap from 'following' to 'leading'." Chen Dapeng said.
(Information source: Global Textile Network)
