In 2013, the bilateral trade volume between China and the five Central Asian countries was US$50.28 billion, a year-on-year increase of 9.5%. China has become the largest trading partner of Kazakhstan and Turkmenistan, the second largest trading partner of Uzbekistan and Kyrgyzstan, and the third largest trading partner of Tajikistan. China is a major textile country. After the goal of jointly building the Silk Road Economic Belt was launched, all walks of life in the textile industry are full of new expectations for Eurasian trade.
The textile foundation of the six countries is weak
Türkiye is unique
Looking at the seven countries on the “Silk Road Economic Belt”, except for Turkey, these countries generally have a weak textile industry foundation. It is reported that due to the lack of sufficient financial support, the spinning and weaving machinery used in countries such as Iran was basically imported from Europe in the 1970s and 1980s. Some equipment, although newly imported, is second-hand equipment. Old textile machinery directly leads to backward textile and clothing production capacity and lack of competitiveness.
In Uzbekistan, 90% of household textiles used in residents’ homes are made in China. Local people have a high opinion of products produced in China. Their high quality, low price and rich variety of patterns are the main reasons why they love Chinese textile products.
Tajikistan is a mountainous country with livestock and agriculture as its main industries. Although rich in cotton, the country does not pay much attention to light industry, resulting in insufficient development of the textile industry. As the country’s economic situation improves and residents’ incomes continue to increase, the demand for textiles in the country’s market is becoming increasingly strong. The head of the country’s Ministry of Energy said that Tajikistan has long neglected the development of the textile industry. Although it exports a large amount of cotton, it mainly exports raw cotton. Now that the country sees that exporting finished products will earn more than twice as much profit as primary raw materials, the call for improving the textile industry chain is getting stronger in Tajikistan.
The textile and apparel industry was once an important manufacturing industry in Kyrgyzstan, but the financial crisis has had a considerable impact on the country and hindered the development of its textile and apparel industry. Currently, the country is facing a series of challenges: lack of raw materials, technology There is a shortage of workers and limited market development capabilities. Even in such a country where the textile and clothing industry was once relatively complete, the textile and clothing industry’s contribution to the country’s GDP is still less than 0.1%. Currently, there are only about 1,000 textile and garment processing factories in the country, mainly producing clothing, knitted fabrics, home textiles, etc. In these factories, 90% of the sewing equipment is made in China. The country’s textile downstream enterprises generally believe that the textiles and yarns imported from China and other places are low-priced and of good quality, so they are not very enthusiastic about the development of the country’s textile industry.
Turkey is the country with the strongest textile industry production capacity and the most complete industrial chain on the Silk Road. Unlike other countries, for China, Turkey is both a good partner in textile trade and the strongest competitor in the international market.
The textile industry is Turkey’s specialty industry, and its output of cotton, wool and man-made fibers ranks among the top in the world. More importantly, the country has a high level of textile technology and well-developed textile supporting industries. Carpets, home textiles and fur and leather goods are arguably the country’s most distinctive products. Due to its geographical advantage, other Eurasian countries also import large quantities of textile products from Turkey. Since the price of Turkish products is slightly higher than that of China, the six Eurasian countries with limited consumption capacity currently prefer to import textiles from China; however, as domestic labor and other production costs continue to rise, the prices of products in China and Turkey are getting closer.
There is a gap in the mid-to-high-end market
Consumption philosophy focuses on brands
In the 7th interview report, we found that there are greater market opportunities in the mid-to-high-end markets of Eurasian countries. In the field of ready-made clothing, China’s most exported products to these countries are fur clothing. Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Turkey all have huge demand for fur products.
Especially the first four countries are very dependent on fur imports from China. In Tajikistan, almost all mid-range furs come from China, 70% of high-end furs come from China, and 30% come from Turkey. The price of Chinese fur generally ranges from 7,000 to 10,000 yuan, and simple and classic styles are popular among consumers in the country. In these countries, female consumers have the habit of purchasing fur, and on average each person owns at least 2 to 3 fur products.
Mr. Gao, who is in the Turkmen fur export business, told reporters: “People in Eurasia are taller, and they prefer loose and comfortable clothing.” As a mid-to-high-end product, fur clothing can well cover up body defects. It can also greatly enhance one’s temperament.
In addition, consumers in Eurasian countries have the habit of borrowing money for consumption. According to Wang Jing, chairman of Jinxin Fur Co., Ltd., because the price of fur is high, many women in Tajikistan take loans to buy it. In Uzbekistan, people save money or apply for loans from banks to buy home textile products. The reason for this is that local people attach great importance to product quality. The residents of Uzbekistan have low economic purchasing power, but they have high requirements for the quality of daily consumer products. They would rather save money or take out a loan to buy a good product than…Sacrifice quality to buy cheap products.
As the economy improves, young consumers in Eurasian countries are paying more and more attention to purchasing brand products. In Tajikistan, Li Ning, a well-known Chinese sports brand, has won the favor of local young people. In Uzbekistan, many adult men choose Nike as their preferred brand for casual wear.
In Kyrgyzstan, some European and American clothing brands are also popular among local young people, but the number of brands is not large and the product types are not rich enough. Xinjiang Yiliqi Company, based in Kyrgyzstan, used to do OEM for Russian and Turkish brands. Duolikong, chairman of the company, said that now they feel that this model cannot survive for a long time. If customers are not satisfied, they will find other factories for OEM. The company lacks autonomy. Only by building a brand can the company go further, and it can Directly facing the Eurasian market.
Not only Yiliqi Company, but also many companies mentioned OEM services for Eurasian countries during interviews. A fur company said: “Many buyers from Kazakhstan and Tajikistan come to China to purchase fur, then label it as made in Turkey or the United Arab Emirates, and sell it back to their home countries. The price is higher than Chinese fur.” The reason why this happens. The situation is because Turkey established its brand in the Eurasian market earlier and established the name of Made in Turkey. Although it is the same product, because it is a Turkish brand, the added value is increased and the price is increased. Therefore, for Chinese enterprises, they cannot be satisfied with exporting low-priced products and cultivating independent brands as early as possible is the long-term solution to gain a foothold in the market.
The Best of the New Silk Road
Q: What textile products are most needed by European and Asian countries?
A: After interviews, we found that apart from Turkey, other Eurasian countries are in greatest need of textile machinery and fabrics. In fact, there are many countries in Eurasia with a history of textile industry. For example, Tajikistan and Uzbekistan have rich cotton resources. However, due to the underdeveloped economy and insufficient transportation, textile production capacity lags behind. In most Kyrgyz textile factories, production equipment varies greatly in age and quality, from Soviet machines from the 1960s to modern circular knitting and flat knitting machines, but new machines are scarce. This situation is very common in European and Asian countries.
Q: Currently, what are the best-selling ready-to-wear products to European and Asian countries?
A: There is no doubt that it is fur. According to Chinese fur exporters, most of the furs in Kyrgyzstan and Tajikistan come from China, and Kazakhstan and Turkmenistan are also important export destinations for Chinese furs. Consumers in Kyrgyzstan and Tajikistan are relatively conservative and prefer furs in three colors: black, gray and brown with a single style. Consumers who buy mid-range products generally have lower requirements for workmanship and lining fabrics. Turkmenistan prefers products with ethnic elements, especially ethnic hats made of fur, which are popular among local consumers.
Q: Which country in Europe and Asia has the strongest purchasing power for textiles?
A: Turkey is the country with the strongest purchasing power, but due to its developed textile industry, the country with the strongest purchasing power for Chinese textiles should be Kazakhstan. Compared with countries such as Kyrgyzstan, Kazakhstan has a larger market capacity. In 2012, the total retail sales of social goods was higher than that of other Eurasian countries. The purchasing power of its citizens has exceeded the level of moderately developed countries. In 2012, the country’s average salary reached US$677.8. The country’s citizens have little awareness of saving and like to consume in advance. At the same time, the country’s price level is higher than other countries in Central Asia, and the retail price of clothing products is dozens of times the factory price.
Q: What are the most common problems that arise when doing export trade with Eurasian countries?
A: The easiest and most worrying problem for exporters in export trade is default in payment. Usually, buyers will pay 30% of the total order amount in advance after signing the order, but some customers will default on the balance, and some even default for 3 months. In international trade, exchange rates are prone to changes. If the RMB exchange rate rises within three months, the losses from exchange rate changes can only be borne by the enterprise itself, thus squeezing corporate profits. Some buyers also require a small part of the purchase to be tested for sale and then pursue orders. If some styles do not test well, customers will lower product prices or even cancel orders, which will also bring losses to the merchants.
Q: What are the most important issues to pay attention to when traveling to Europe and Asia?
A: We recommend that companies learn more about local customs and habits before visiting Eurasian countries, and be sure to respect their culture and national habits during the inspection. For example, Iran requires women to wear headscarves when going out, even foreigners. It is reported that women who do not wear headscarves may be detained by the police. Many other Eurasian countries have religious beliefs and require inspectors to pay great attention. For example, in Muslim countries, local food habits must be respected.
Q: Where are the gathering places for textile sales in European and Asian countries?
A: Bazaar is the main sales channel for textiles in most European and Asian countries. In Europe and Asia, large department stores are rare, but bazaars similar to markets can be found everywhere. Bazaar has a history of thousands of years. Local people are accustomed to buying daily consumer products in Bazaar, ranging from shoes, hats and clothing, jewelry and spices, grains and household appliances. The top five bazaars in the world are all concentrated in Eurasia, such as Tabriz Grand Bazaar, Isfahan Grand Bazaar, Mashhad Grand Bazaar, etc. Here, you can not only see the lives of ordinary people in Eurasia, but also You can see handicrafts that have been passed down for hundreds of years. It can be said that the Bazaar condenses the history and essence of Europe and Asia.
Free products range from shoes and hats, clothing, jewelry, spices, grains and household appliances. The top five bazaars in the world are all concentrated in Eurasia, such as Tabriz Grand Bazaar, Isfahan Grand Bazaar, Mashhad Grand Bazaar, etc. Here, you can not only see the lives of ordinary people in Eurasia, but also You can see handicrafts that have been passed down for hundreds of years. It can be said that the Bazaar condenses the history and essence of Europe and Asia.
