Difficulties pile up, textiles expect orders

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It is forecasted that the total textile export turnover for the whole year is about US$32.75 billion, down about 16% compared to 2019. Photo: Nguyen Thanh

From the beginning of the year to the end of August 2020, textile production increased by 1.3% over the same period last year; while apparel production decreased by 4.2% over the same period last year.

Also following the declining momentum, over the same period last year, the export turnover of textiles and garments in eight months was estimated at US$19.25 billion, down 11.6%; strong fabrics and other technical fabrics were estimated at US$260 million, down 36.8%; fibers of all kinds were estimated at US$2.2 billion, down 19.4%.

The MoIT assessed that, due to the Covid-19 pandemic, the production and export situation of the textile and garment industry still faced many difficulties. Consumer demand in the world is affected by social distancing measures, uncertainty about future developments, and saving policies of households who are hesitant tospend, while investment of enterprises also slowed down.

In terms of aggregate demand, in the third quarter of 2020, the world textile and apparel market, in general, has not received many positive signs, while market demand has not changed much.

Confidence in the consumption of goods in the US, EU, and Japan has not shown many good signals. The figures for garment imports and a series of price-cutting moves to stimulate demand, push inventories away to avoid the backlog of retailers, as well as suspend garment imports by major importers have shown that the market, as well as demand for clothing products, is pausing.

The MoIT stated that, according to annual practice, at the present time, all enterprises have ordered until the end of the year and even the first half of next year.

However, the demand slowed down due to the Covid-19 pandemic when consumers around the world only care about essential appliances and disease prevention, Vietnamese textile and garment enterprises currently only receive orders according to monthly information, or even weekly.

"Some businesses have received about 50-60% of their orders for September, the remaining months of 2020 and 2021 have not had clear information," the representative of the MoIT said.

Mr. Le Tien Truong, General Director of Vietnam National Textile and Garment Group (Vinatex) said that consumption behavior after the Covid-19 pandemic has changed significantly. Recent surveys in both international (conducted by Deloitte) and domestic (conducted by the Group) market share show the same perception that preference for pharmaceuticals, food, and savings is everyone's priority

Although clothing still has the fourth place in the priority list, after saving, so budgets for garments are very limited. The trend of less consumption, more basic products and lower shopping limitswill dominate the fashion market in the near future.

The decrease in aggregate demand will push upcompetition among textile-producing countries, with lower prices and greater pressure from buyers.

Vinatex forecasts that Vietnam's textile and garment exports in the second half of the year will continue to decrease by 14-18% over the same period last year. The total export turnover for the whole year is about US$32.75 billion, down about 16% compared to 2019.

According to Mr. Nguyen Xuan Duong, Chairman of the Board of Directors of Hung Yen Garment Corporation, Vice Chairman of the Vietnam Textile and Apparel Association (Vitas), currently the demand is low and must be divided among many markets.If you do well in terms of time, quality, and reasonable price, you can gain more orders.

In particular, businesses need to change the method of signing contracts. In the past, businesses often had to connect through intermediaries, so they should sign contracts directly with partners based on digital platforms and information technology to help reduce intermediaries, connect more quickly with partners when it is possible to quote prices, send goods, or sign agreements online.

"This helps businesses not only save time, improve their reputation but also help increase the value of orders," Mr. Duong said.