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Micro-observation: Responding to the impact of the new round of the epidemic

June 28, 2021

A new round of epidemic rages

Drag down the Asian sewing machine market


Since April, the number of new confirmed cases of the new crown epidemic in India has increased rapidly, and its spread to neighboring countries has accelerated: Nepal and Vietnam cases have continued to rise, and 12 countries including Bhutan, Laos, Thailand, Malaysia, Bangladesh, Pakistan, and Myanmar have rebounded. , The entire Southeast Asia is caught in a new round of epidemic crisis.


Correspondingly, as one of the global manufacturing bases, the chain reaction of the epidemic in India and Southeast Asia has caused the global supply chain to be once again blocked, which has further increased the uncertainty of the global economic recovery.

According to a CCTV financial report, industry insiders in the Indian apparel export industry said that due to the blockade measures during the epidemic, the export of the Indian apparel industry has shrunk severely. In 2020, the export of the Indian apparel industry will decrease by 24%. In the new round of the epidemic, related Indian companies have lost a large number of garment export contracts due to the inability of workers to arrive at their posts. The export volume of the hosiery center in Ludhiana, the northern city of Punjab, India, decreased by 35%. Relevant data show that in the clothing cities of Delhi and Bangalore, the labor absenteeism rate in the clothing industry is as high as 50%. Industry insiders said that normally this time of year is the peak time for placing orders, but buyers from all walks of life are now more cautious. In Noida, an important garment export town in Uttar Pradesh, India, the head of a local garment export group said that due to the epidemic, international buyers have lost confidence in India. In addition, the representative of the Ministry of Industry and Commerce of Vietnam revealed that clothing and footwear were severely affected by the new crown pneumonia. Although positive growth was achieved in April, the new round of epidemic has dragged down the upward momentum.


Based on the information that the Association has interviewed with major sewing equipment distributors in India, Vietnam, Myanmar, Bangladesh and other countries, it can be seen that within more than a month of the outbreak, downstream user companies such as local textiles, clothing, home textiles, shoes, hats and bags have been affected by the new round of the epidemic. Deeply implicated, production suspension, order reduction, logistics stagnation, and employee turnover have become the norm.


Different countries have different influences

The Vietnamese market is relatively stable

In order to have a more detailed and accurate understanding of the impact of the epidemic on India and Southeast Asian countries, especially the local sewing equipment market and downstream equipment user companies, the association media platform collected and summarized relevant information through multiple channels:


"We are closing the city, which will affect the transportation of goods and the provision of services. More than half of downstream equipment users have stopped working, and the operating rate of enterprises still in production is less than 25%. Online and offline demand is shrinking, and there is no equipment purchase demand. It is expected The market will pick up until September." Mr. Rohit, head of Indian sewing equipment distributor Balaji Sewing Machine Pvt., Ltd, said in an interview that the outbreak of the epidemic is causing a "very terrible" continuing impact on the Indian market. .


Regarding future market trends, many Indian distributors interviewed stated that India’s implementation of a daily salary system and the impact of the city’s closure last year did not meet expectations. The ordinary people were not satisfied with the government’s measures. Under the premise of epidemic prevention and protection, the company maintains operations; many front-line workers hope to continue working because of their livelihoods. This is also the main reason why some downstream companies have not completely stopped work. Whether production and operation can be resumed as soon as possible depends on the trend of the epidemic and related policies. Introduced".


The heads of two local distributors in Myanmar said that due to the continuous impact of the first wave of epidemics in March last year, the second wave of epidemics in September, and the political changes that began in February this year, the orders that Myanmar garment factories could receive Significant decrease, with factory closures or temporary suspensions of business one after another, "one-third of the factories closed and one-half of workers unemployed"; new projects have basically been suspended and wait-and-see, so equipment sales have almost stagnated. "The Indian epidemic has entered the Rakhine State in southwestern Myanmar, but the political situation has prevented large-scale testing and quarantine measures. In the next four months, Myanmar will enter the rainy season. Humidity and lower temperatures may lead to further spread of the virus. ,spread."


In response to an interview letter from the association, Noyem Sharif, a relevant local practitioner, said that the current epidemic in the main clothing production area in Bangladesh is getting more and more serious, which has clearly affected the development of clothing and other related equipment industries, with less than 70% of enterprises operating. Combined with the prediction of the local government, the epidemic is likely to continue until next year before it can be alleviated. "However, local downstream user companies still have an urgent demand for sewing equipment, and the market has great potential."


Compared with the above-mentioned countries, Vietnam's measures at the prevention and control level are more rapid and effective, and the sewing machine market is more stable. According to information provided by an equipment dealer in Vietnam, the new round of the epidemic in Vietnam is at an early stage. Affected by this, some industrial parks in the Beijiang and Bac Ninh provinces, which are clusters of downstream industries, are closed, and some areas in the Taiping and Haiyang provinces are also closed. , Other provinces have also successively introduced relevant prevention and control policies.


The distributor said that from the perspective of equipment sales, compared with the same period last year, it has fallen by about half. If there is no sudden epidemic, Vietnam should enter the peak production season this month. From the perspective of downstream equipment users, garment factories are currently relatively full of orders, and production schedules are relatively normal, but there are also cases where a small number of orders are cancelled. In addition, Vietnam's domestic logistics has been significantly affected, which has a certain impact on the production schedule of garment factories. “Vietnam is just in time for the National Assembly election, and the government is paying more attention to the epidemic. Now it is required to reduce gatherings, cancel dine-in meals, close parks, and go out without wearing masks will be fined. We believe that with effective measures, the epidemic will gradually be brought under control and normal Production order and market demand will be restored accordingly."


Respond to new challenges with "double cycle" thinking


Although the new round of the epidemic has aggravated the unpredictability and uncertainty of the global economic recovery, and the demand for equipment in some areas where the epidemic is more severe, the overall demand for sewing machinery continues to improve and the general trend is that from a global perspective No change, structural opportunities still exist.


First, the domestic market. The continuous recovery of downstream production driven by terminal demand will surely deliver new demand for sewing equipment. On the one hand, the domestic economic recovery is expected to drive the domestic consumer market for textiles, clothing, shoes, hats and bags to accelerate; on the other hand, the epidemic situation in Europe and the United States is gradually improving, coupled with the frequent government economic stimulus policies, accelerating the recovery of the consumer market, and domestic downstream industries are adding overseas Orders have continued and orders from the epidemic area have been transferred back. According to the feedback from domestic equipment dealers, in the past month, there has been an obvious trend of returning orders for home textiles and home service. In the past two weeks, the return of orders for clothing, footwear and hats has also begun. According to the forecast of China's Keqiao Textile Index, my country's textile and apparel exports are expected to continue to achieve recovery growth during the year and return to normal export growth levels in the second quarter.


Secondly, overseas markets. Although the new round of the epidemic has caused fluctuations in overseas markets, there is always the potential for demand for sewing equipment in relevant markets. Once the epidemic improves, it may usher in a rebound release. In addition, according to the data of the Taizhou Bureau of Commerce, excluding the Indian market, from January to April this year, the export value of Taizhou garment machinery exceeded RMB 1 billion, confirming that the demand for equipment in major countries is gradually releasing, and the majority of industry enterprises can pay attention to this part of the market. Under the premise of doing a good job in risk prevention and control, pay attention to exchange rate changes and shipping and other logistics changes, establish a rapid response and response mechanism, and achieve continuous expansion of overseas market space in accordance with global order circulation and transfer trends.


He Ye, vice chairman of the China National Light Industry Council and chairman of the China Sewing Machinery Association, pointed out that after the CPC Central Committee established the "dual cycle" strategy, the China Sewing Machinery Association immediately made overall arrangements and clarified the advancement of the industrial foundation to industry enterprises. The modernization of the industrial chain, the formation of a strong domestic market, and the construction of a new development pattern of dual cycles of internal and external markets, and benign interaction of the industry’s key development tasks and goals; at the industry’s backbone enterprise summit, which is known as the "industry two conferences", centering on the "cooperative dual cycle" "Expand new markets" theme, comprehensively analyze the current complicated development situation and market situation, and further point out the direction for industry enterprises and sort out feasible paths.


Chairman He Ye emphasized that under the guidance of the association, the majority of sewing machine companies, especially leading companies, have actively responded to the practice, and made a good start to build a new development pattern of "double-cycle" sewing machinery, and achieved initial results: first , The majority of sewing machine enterprises earnestly study and understand the spirit of the central government, center on their own characteristics, establish the guiding ideology of the "double cycle" development pattern, and formulate corresponding development planning strategies, and the domestic market has been further consolidated. Secondly, the backbone sewing enterprises seized the first window of industrial opportunity for the domestic economy to pick up and recover, and achieve a deeper breakthrough in the domestic market through the digital synergy of the industrial chain.


Chairman He Ye requested that in the face of the impact of the new round of the epidemic, the majority of sewing companies should have more confidence, adopt the "double cycle" thinking of the industrial chain, closely focus on the main line of high-quality development, highlight industrial transformation and upgrading, and start from subdivision. Target new markets, build a new channel system, enrich new marketing methods, reshape a new order of competition, cultivate new advantages in foreign trade, form a new ecological pattern of the industrial chain and supply chain, improve the quality of talents and new levels of capacity building, etc. to work together and continue to develop With the goal of building a new market and a new development pattern for internal and external circulation, we will hand over a satisfactory "transcript" of industry development.


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