2023 Strategy of Textile and Garment: Winter will pass and spring will return

Brand clothing: recover after the epidemic, pay attention to the track leaders with high prosperity and greater demand elasticity
In 2022, the demand will be under pressure: the repeated epidemic in many places will lead to the decline of passenger flow, the obstruction of logistics, the increase of unemployment rate and other factors, resulting in weak overall domestic demand and poor performance of clothing retail.

Demand is expected to recover in 2023Q2: the epidemic prevention policy will be optimized from December 2022. Taking Hong Kong and Taiwan, China as examples, and considering the pace of recovery of optional consumption in 2020, we expect the demand for clothing to recover around 2023Q2.

The epidemic accelerated the clearing of the industry, and the domestic product leaders developed their internal skills against the trend to achieve the double improvement of brand strength and market share: the domestic leaders introduced high-performance and cost-effective products through technology, while continuing to optimize the offline channel structure, actively promote online emerging platforms, strengthen the construction of digital+flexible supply chain, and promote global coordination to improve operational efficiency.

Suggested attention: 1) Benefiting from the high prosperity sports track with improved health awareness after the epidemic, pay attention to Anta Sports and Li Ning, the national brand sports leaders, who are expected to fall back obviously in the early period when the demand slows down; 2) The public leisure clothing that conforms to the trend of high cost performance after the epidemic and the income level of customers or will be improved.

Textile manufacturing: domestic epidemic in 2022 – high inflation overseas will affect consumption, waiting for domestic and foreign demand to recover in 2023, and focusing on sports manufacturing leaders and differentiated pioneers.

External demand: In 2022, the high inflation level in Europe and the United States and the lack of confidence in overseas consumers led to a continuous slowdown in the growth rate of overseas clothing retail. In addition, the inventory level of many international leading sports brands reached a record high in the early stage due to increased replenishment due to the tension in the global supply chain. This will further affect China Vietnam textile and garment foreign trade orders, and their export growth will drop significantly in 2022Q3. We expect that the short-term demand will remain under pressure and the brand will still be in the de stocking stage. As the inventory pressure weakens, the external demand is expected to improve in 2023H2.

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