In the first quarter of 2017, the overall operation of the home textile industry was stable. The export was stabilized with rising export volume and decreasing price. The industry has accelerated its adjustment and upgrading, with diversified distribution channels, increased sales costs and differentiated development between industry and enterprises.    

General situation

According to National Bureau of Statistics, main business income of 1,866 enterprises above designated size was 60.972 billion yuan, up by 0.46% year on year; total profits reached 3.509 billion yuan, down by 6% year on year. The operating growth rate and efficiency of above scale enterprises both declined, which is mainly caused by the great decline of main operating indicators of above-scale towel enterprises. In addition to the 280 above-scale towel enterprises, the other 1,586 above-scale home textile enterprises has achieved the main business income up by 8.78% year on year, and total profits up by 5.58% year on year.  

In addition , 218 key enterprises has achieved income of 20.082 billion yuan, up by 4.03% year on year, and total profits of 1.259 billion yuan, down by 1.64% year on year in the first quarter of 2017. The 16 industry clusters has realized income of 5.274 billion yuan, up by 6.02%, and total profits of 369 million yuan, u by 3.53% year on year.

Export for better stability

In the first quarter of 2017, China’s total export of home textile products registered $8.146 billion, down by 2.08%, narrowing by 3.7 percentage points compared with the same period of 2016. There were three features.

Obvious increase in export volume and fall in price. The export volume of home textile products increased by 8.68%, with export price down by 10.05%.

Prominent market increment. The export amount to the United States, Japan and Europe reached $4.289 billion, up by 1.22% year on year, of which the United States market led a significant role. Export amount to the U.S. Market reached $2.137 billion, rising by 4.05%, with 9.6 percentage points higher than the average of last year.    

Figure 1 Export to the U.S., Japan and Europe of home textile products in the first quarter of 2017

The Belt and Road Initiative market slowed down. The export to the markets along “the Belt and Road Initiative” amounted to $2.815 billion, a fall of 5.84%, with a decline of 3.76 percentage points greater than the average of the industry.

Main operating features

Production with a stable increase

Figure 2 The comprehensive situation of enterprise in production and operation 

In the first quarter of this year, the overall production of home textile industry maintained steady growth. According to the questionnaire of the enterprise management, the enterprises with rising and flat production and management situation accounted for 45.7% and 52.2% respectively of the surveyed enterprises, rising by 0.4 and 3.1 percentage points over the previous period, while the decreasing enterprises only accounted for 2.2%, with 3.5 percentage points lower than over the precious period.

Cost was relatively stable but expenses increased too fast

In the first quarter of 2017, the main business income of home textile enterprises above designated size grew by 0.46% compared with the same period, and the proportion of main business costs accounted for 87.6% of the main business income. However, the proportion of three expenses (administrative expenses, operating expenses and financial expenses) increased by 0.4 percentage points to 6.4%, which was mainly because the selling expenses increased too fast, and squeezed the profit margins of the enterprises.

The accelerated adjustment caused the differentiation of industry and enterprises

  With the adjustment of market structure, the small enterprises in the industrial clusters can better adapt the market demand and find position by making good use of their own characteristics of small scale, and flexible and changeable features as well as focus on the quality of products. At the same time, the large-scale home textile enterprises with strong foundation and extensive brand influence could maintain stable growth in quality and efficiency. Domestic output value reached 7.779 billion yuan, up by 11.89% year on year, and total profits amounted to 1.029 billion yuan, an increase of 19.37%. Since the market increment has slowed down and channels changed so fast, the medium-size enterprises faced a more severe situation. So the industry and enterprises should actively made adjustment to cope with the changes of future market and to catch up with the adjustment and upgrading of the industry.