(Yicai Global) Nov. 25 -- Chinese garment producers are facing lower orders, narrower profit margins, and uncertain payments due to weak overseas demand and recurring coronavirus outbreaks in China. Some are planning early annual vacations, while others are trying to find new market opportunities.

“Many garment factories are preparing to start their Spring Festival holidays early this year,” Meng Zhuo, manager of Anhui Import & Export, told Yicai Global. Orders are falling, with some factories having almost none, he said.

Sales prices are low and profits are thin, and there is increased uncertainty over payments, which leads to greater financial risk, Meng added.

In traditional industries such as clothing and textiles, many companies respond to downside risks and uncertainty by taking early holidays or adopting cautious operating strategies, Meng told Yicai Global.

Li Changchun, manager of a fabric manufacturer in Suzhou, said that his company's orders were 20 percent to 30 percent down on last. But compared with shrinking orders, increasingly thin profits margins are a bigger problem, he said.

Tingmei Super Wise Zhejiang Clothing’s factories are still running, “but they’re dealing with orders that they can’t make a profit from, just so that workers get paid," said Chairman Fang Yuxing.

The new market conditions have brought challenges, said Fang, whose company is working to launch new products while transforming itself from a home apparel supplier to one of household clothing products. It is also trying new sales models such as live-streaming to attract more customers.

Fang said the company is also trying to expand in the domestic market, following two years of investment in marketing and setting up design crews. He said that by next year, the firm hopes to reach a point where domestic sales are the main focus.

Some garment makers are developing by trying to achieve low-carbon transformation. The boss of Romrol Outdoor Material, which mainly focuses on outdoor sportswear and exports 90 percent of its goods, said that due to the use of recycled products, biodegradable fabrics and bio-based fabrics, the added value of the firm's apparel products has been rising, while profit growth is strong.

He said that since 2020, Romrol's sales have grown steadily and annual profit growth on orders has surpassed 40 percent. It is expected to reach 50 percent this year, with sales expected to jump 20 percent.

Editors: Tang Shihua, Tom Litting