The textile industry finding ways to overcome difficulties

​In 2023, the textile and garment industry is expected the export can earn 48 billion USD. However, this goal is facing many challenges due to the unstable world economic situation.

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Enterprises visit the international exhibition of the textile industry, equipment, materials, and fabrics Saigontex 2023​

In the difficult context, the textile and garment industry has made great efforts to find new orders and at the same time enterprises are also forced to reform their production in line with global consumption trends.

Inentories of big brands are at a high level

According to the Vietnam Textile and Garment Group (Vinatex), Vietnam's textile and garment industry is mainly for export, so it is greatly affected by the total demands in the world. Due to common difficulties, people have tightened their spending and reduced purchasing power for non-essential goods including textiles.

These problems lead to high inventories of major brands of world fashion groups. Revenue increased slightly but profit dropped sharply. Nike's inventory by the end of the first quarter of 2023 increased by 16% year-on-year, and net revenue increased by 14% but net profit decreased by 11% over the same period. Adidas by the end of December 2022, inventory increased by 49%, and net profit in 2022 decreased by 83% compared to 2021. Inditex inventory increased by 4.9% by the end of January 2023. Hanes inventories in 2022 increased 24.9% over last year...

According to Mr. Vuong Duc Anh, Chief of Office of the Vietnam Textile and Garment Group (Vinatex), inflation in the US and EU, two major markets of textiles and garments, has increased to high levels in the past 40 years, this is the blowing back wind causes detrimentation to the industry. In fact, the processing price has currently dropped very deeply, many businesses only have orders until the end of March and April while every year, at this time, there are orders to do until the end of June or the end of the year.

Experts forecast that the difficult economic and market situation will continue until the end of 2023. World demands continue to decrease, demands remain low and lower than total demands in 2020 when there is the Covid-19 epidemic (due to the presence of Covid-19 (demands for medical goods). The trends of job reduction and labor reduction are inevitable in the coming time. In the second quarter, the order situation may improve in term of quantity but continue to face difficulties in unit prices when the cost pressure is high, and the profit margin of enterprises has not been improved; the potential for developing the garment industry are only small, complicated orders. The yarn industry will improve if businesses can buy cotton by new prices and export to markets outside China...

Changing to match world consumption trends.

Not only is the demand difficult, but Vietnam also has to compete fiercely with other textile and garment powerhouses such as China, Bangladesh, India, Indonesia, Pakistan, and Turkey.

In particular, the Bangladeshi garment industry has pushed Vietnam to the third position of exporting textiles. The country currently has about 4,000 factories in operation, accounting for nearly 29% of GDP which is the main sector of industry. The important thing is that Bangladesh has rapidly changed the face of the textile industry towards greening. Up to 9 out of 10 modern factories in the world located here and about 188 factories in Bangladesh have obtained the US Leed Platinium certifications. “Bangladesh's greening story could be one of the reasons causing orders flowing there. The markets share of the total demand pie decreased, but competitors increased, "said Mr. Vuong Duc Anh.

The lessons from Bangladesh require businesses to make efforts to restructure, optimize production processes, maximize cost savings, and streamline apparatus with modern technologies. With the trend of responsible consumption in the world, big brands will focus on cooperating with units with programs of sustainable development, greening, digital governance, circular economy...

Deputy Minister of Industry and Trade Phan Thi Thang said that textiles and garments have proven to play an important role in creating jobs, social security, and contributing a large source of foreign currency to the country. Faced with difficulties, the industry must change. Therefore, enterprises need to find ways to approach and invest in advanced technologies and modern equipment. At the same time, promote trade relationships, participate deeply in the global value chain, gradually increase the localization rate, proactively meet the diverse needs of domestic and foreign customers.​