In the first quarter of this year, the successive spread of the COVID-19 epidemic both domestically and internationally presented unprecedented difficulties for home textile enterprises. Orders in both domestic and foreign markets decreased significantly, severely impacting industry operations and profitability. Since late February, as the domestic epidemic has been gradually and effectively controlled, the resumption of production and work for domestic home textile enterprises has been gradually and orderly promoted. However, due to the continued spread of the overseas epidemic, export-oriented home textile enterprises face even more severe challenges. Statistical data shows that the main operating indicators of the home textile industry all showed negative growth in the first quarter, putting pressure on business operations.
I. Decline in Production Scale
Affected by the epidemic, the shutdown time of the home textile industry after the Spring Festival was extended. After the gradual resumption of work and production, many enterprises faced a lack of orders, and the production growth rate declined significantly. According to data from the National Bureau of Statistics, in the first quarter of this year, 1760 large-scale home textile enterprises nationwide achieved main business income of 33.2 billion yuan, a year-on-year decrease of 24.77%, with the decline narrowing by 4.95 percentage points compared to the previous two months. The 223 key enterprises and 15 industrial clusters tracked and statistically analyzed by the association also showed negative growth, with year-on-year decreases in main business income of 19.20% and 14.18% respectively in the first quarter.
II. Decline in Domestic and Foreign Market Demand
(I) Export
After the accelerated spread of the overseas epidemic, many countries entered a state of emergency, commercial activities stalled, customs were closed, and a large number of home textile export orders were postponed or canceled, with frequent instances of goods being abandoned or rejected. This sharply increased the pressure on the industry's exports. According to data from China Customs, in the first quarter of this year, China exported US$79.69 billion worth of home textile products, a year-on-year decrease of 11.07%. In terms of export products, the export of towels, bedding, and blankets was more severely affected, with a decrease of more than 20%. In terms of export markets, export volumes in several major global markets were significantly impacted, especially the US market, where exports in the first quarter amounted to US$1.868 billion, a significant year-on-year decrease of 19.70%. The lack of orders is the most significant problem facing export-oriented enterprises. Therefore, export-oriented enterprises urgently need social attention and government assistance, including targeted subsidy policies, to help them overcome the difficulties.
(II) Domestic Sales
Since the outbreak of the epidemic, most physical retail stores in China have been closed. Since March, with the gradual and effective control of the domestic epidemic, the resumption rate of home textile businesses has reached over 90%, but the operating conditions are generally poor. In the first quarter, the turnover of most businesses was less than half of the same period last year, and the overall domestic sales growth rate of the industry has declined sharply. According to calculations by the National Bureau of Statistics, the domestic sales value of the home textile industry in the first quarter was 23.213 billion yuan, a year-on-year decrease of 27.39%.
According to the results of the "Home Textile Dealers Survey Questionnaire" conducted by the association in March this year, issues such as insufficient customer flow, lack of working capital, wages, and product inventory have put pressure on home textile dealers. In response to the lack of customers in offline stores, some bedding and towel businesses have utilized new models such as e-commerce, live streaming, and mini-programs to attract customers, increasing online promotion and sales. They have adopted new business models to change the status of physical stores "waiting for customers to come," taking multiple measures to minimize losses caused by the epidemic. In terms of geographical distribution, businesses in regions such as Shandong, Jiangsu, Zhejiang, Shanghai, and Guangdong have relatively better recovery statuses.
III. Decline in Industry Operational Efficiency
With insufficient demand and a significant decline in production and sales, the operational efficiency of home textile enterprises has significantly declined, but there is a trend of gradual improvement. According to data from the National Bureau of Statistics, in the first quarter of this year, the loss rate of 1760 large-scale home textile enterprises nationwide was 36.14%, an increase of 22.29 percentage points compared to the same period last year, but slightly narrower than the previous two months. The total asset turnover rate was 0.92, a decrease of 0.39 points compared to the same period last year; the inventory turnover rate was 1.46, a decrease of 0.63 points compared to the same period last year; and the inventory turnover rate was 1.23, a decrease of 0.50 points compared to the same period last year. Total profit reached 11.07 billion yuan, a year-on-year decrease of 20.95%, but the decline narrowed compared to the previous two months. The cost-expense-profit ratio was 3.49%, an increase of 0.83 percentage points compared to the previous two months, basically remaining flat compared to the previous year.
Under the normalized epidemic prevention and control, the production and living order in China has gradually recovered, and the macroeconomic operation is gradually returning to normal. The huge potential of the domestic market provides a guarantee for the development of the industry. Under the normalized epidemic prevention and control situation, the state has introduced a series of measures to accelerate the key enterprises, industrial clusters, and specialized markets to adapt and vigorously tap the potential of domestic and foreign markets. Policy measures are gradually being implemented and showing results, helping enterprises overcome difficulties and restore vitality. At the same time, under the impact of the epidemic, a group of excellent home textile enterprises actively responded to the challenges, timely changed their thinking, and actively explored. The risk resistance and development resilience of enterprises have been steadily improved, and the industrial structure has been continuously adjusted and optimized, jointly contributing to the stable operation and gradual achievement of high-quality development of the industry.
