The United States is reducing its dependence on Chinese clothing exports, and the ripple effects are alarming.
Due to geopolitical conflicts, fragmentation of the global industrial chain and high inflation, the U.S. retail market is hardly optimistic this year, but the Federal Reserve has paused interest rate hikes for three consecutive months, CPI is expected to fall, and the U.S. retail industry has shown resilience.
According to data from the U.S. Department of Commerce, affected by Thanksgiving Day and the "Black Friday" shopping holiday in November, the growth rate of U.S. retail sales in November turned from negative to positive, with a month-on-month increase of 03%, up 4 percent year-on-year1%, mainly driven by online retail, leisure and food and beverage.
Retail sales of clothing and apparel stores in November were 261US$200 million, an increase of 06%, an increase of 1 over the same period last year3%。
The gap between the growth rate of brick-and-mortar retail and non-brick-and-mortar retail is widening. Retail sales of general stores (including supermarkets and department stores) in November were 729$100 million, down 02%, an increase of 1 over the same period last year1%, of which 105$300 million, down 25%, down 52%。Retail sales of non-brick-and-mortar retailers in November were 1,185$500 million, up 1% sequentially and up 106%, an increase of 6%.
Due to the destocking, there is a big difference between the data on the import side and the data on the retail side.
From January to October, the United States imported 772 clothing200 million US dollars, down 238%, 0 percent narrower than the decline in the previous 9 months2 percentage points. Imported from China 177$200 million, down 276%;Accounting for 229%, a year-on-year decrease of 12 percentage points. Imported from Vietnam 129$900 million, down 247%;Accounting for 168%, a decrease of 02 percentage points. Imports from Bangladesh were US$6.7 billion, down 254%;Accounting for 87%, a decrease of 02 percentage points.
Compared to five years ago in 2018, China accounted for 41 percent of U.S. apparel imports9% and 13 in Vietnam3%, in five years, China's share has fallen by 19 percentage points, and Vietnam has risen by 35 percentage points.
A decline in share may mean a decline in the status of the leading businessman.
Since the second half of this year, the number of cases of large deductions by US importers for reasons such as quality and delivery time has increased sharply year-on-year, and many of them are large cases of more than one million US dollars. There are some common features in these cases:
First, there are relatively few domestic first-class merchants of these buyers, and some of them have only one first-class businessman in China, and buyers are not sensitive to the nationwide quota revocation after the loss is reported.
Second, the cooperation between export enterprises and buyers is not long, not deep, and buyers have a strong willingness to turn to other countries.
Third, the buyer's own business willingness and model have changed.
It is not a new problem for U.S. retailers to pass on losses to importers through discounts and deductions, and importers to further pass on losses to ** merchants.
Whether the importer passes it on to the top businessmen, which ones to pass it on, how much to pass it on, and how to pass it on are all weighed up, mainly depending on the cooperation value and potential deterrence of the first businessmen.
The value of cooperation is reflected in: whether the product development, quality control, supply cycle and other aspects of the first-class business are optimal;Whether there is a stable performance and delivery capacity;how well you cooperate on a day-to-day basis, etc.
The potential deterrent effect is reflected in: the difficulty of switching the first business, and whether it can find a completely alternative business provider in a short time;The proportion of supply of **merchants, that is, the degree of impact of replacing **merchants;Whether the arrears of the ** merchant will cause a chain reaction, such as destroying their own reputation in the circle, or affecting the purchase from other ** merchants because of the credit insurance limit and other reasons.
With the development of the garment industry chain in Vietnam, Bangladesh and India, it is not difficult to judge that China's leading businessmen who are only in the domestic layout are facing a gradual decline in the above two aspects.
This trend may not be reversed in the short term, and there are three suggestions for how companies should respond
The first is to insist on taking out export credit insurance. Official export credit insurance is backed by the country's financial resources to protect the risk of overseas accounts receivable collection of enterprises, and is still the only choice for enterprises to prevent export credit risks. However, it should be noted that the dispute is not the insurance responsibility of export credit insurance, and the true, legal and clean overseas accounts receivable claim is the basis for successfully obtaining claims, so it is necessary to pay more attention to retaining the written evidence in favor of oneself in terms of performance and delivery and product quality, and develop the habit of timely reconciliation.
The second is to unswervingly "go global" and realize the global layout. Garment export enterprises "going out" can no longer be as "economic accounts" as a few years ago, "going out" has become the "standard" to participate in international competition. In Europe and the United States, especially in industries such as electronic information, home appliances and textiles and garments, which are relatively dependent on China, "decoupling and breaking the chain" and "de-risking" are no longer slogans.
The third is to pay attention to the business trends of buyers and carefully select partners. The boss is relatively old and has no successor, the company itself is in a downward channel, the credit strength is weak and the competitiveness is not outstanding, the debt ratio is high, and the importers with high inventory are cautious to trade.