Recently, due to the surge in confirmed Covid-19 cases in Southeast Asia such as Vietnam, the manufacturing industry may partly return to China. Some phenomena are reflected in trade, and the fact that manufacturing has returned. A recent survey made by the Ministry of Commerce shows that about 40% of foreign trade companies’ newly signed export orders have increased year-on-year. The return of overseas orders does indeed usher in unprecedented opportunities for small and medium-sized enterprises, and at the same time it also brings challenges.

According to recent surveys on the textile market in Guangdong, Jiangsu and Zhejiang, and some foreign trade companies, knitting, fabrics, clothing and other terminals have received orders smoothly since July, and they have basically been able to start up at more than 80% or even full production.

Many companies reported that since July and August, the orders received in developed countries such as Europe, America, Canada and other developed countries are mainly Christmas and Easter (especially the return orders from Southeast Asia are more obvious). They were placed 2-3 months earlier than previous years. Low-grade, poor profit, but long-term order and delivery time, foreign trade, textile and clothing enterprises have relatively sufficient time to purchase raw materials, proofing, production and delivery. But not all orders can be traded smoothly.

Raw materials are skyrocketing, orders becomes the “hot potato”

Due to the impact of the epidemic, many orders had to be postponed. In order to make a smooth transaction, they had to intercede with customers, hoping that they would understand. However, they are still faced with being overwhelmed by customers, and some have no choice but accept customers cancel orders because they can’t deliver goods…

The season of Golden Nine and Silver Ten is coming soon,companies thought that there shall be more orders from customers. While what they faced is that the exhibition is cancelled or postponed, and other countries have also blocked their countries due to the epidemic. The customs of the country where customers are located have also begun to strictly control various imported and exported products. Import and export operations have become very troublesome. This led to a sharp drop in customer purchases.

According to feedback from some foreign customers: due to the epidemic, the productivity of all countries has been severely hit, most of their products have been sold out, and the inventory in the warehouse has reached a record low, and there is an urgent need for purchase. The current situation of Southeast Asian countries should not be underestimated. Overseas orders continue to return, and some Chinese companies have gone from “order shortages to burst orders.” But in the face of the increase in orders, textile people are not happy! Because of the increase in orders, raw materials price are also skyrocketing.

And the customer is not a fool. If the price is suddenly increased, the customer has a great chance to reduce purchases or cancel orders. In order to survive, they have to take orders at the original price. On the other hand, the supply of raw materials has risen, and because of the sudden increase in customer demand, there has also been a shortage of raw materials, which has led to some suppliers who may not be able to provide parts to the factory in time. This directly led to the fact that some textile raw materials were not in place in time and could not be delivered on time when the factory was producing.

Stepping up the production for shipment, factories and companies thought it would be possible to ship smoothly, but they didn’t expect the freight forwarder to say that it is very difficult to order containers now. From the beginning of the arrangement of shipments, no shipments were successful after a month. Shipping is tight, and the price of ocean freight has soared, and several have doubled several times, because the high ocean freight has also stopped…The finished goods can only be left in the warehouse to wait, and the time for the return of funds is also extended.