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Mr. Parry Chung - Adsale Exhibition Services Ltd.

COVID19 and its effects on Textile Industry and Exhibition Business

Kohan Textile Journal (Middle East Textile Journal) Interview with Adsale Exhibition Services Ltd.

 

1) Please let us know more about Adsale Exhibition Services Ltd. , history, textile events and success story.

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  • Adsale Exhibition Services Ltd is a pioneer in organizing exhibitions in the mainland China. With an experience of over 4 decades, Adsale has been widely regarded as Asia’s most innovative and result-driven show organizer, attracting hundreds of thousands of exhibitors and trade visitors from over 150 countries and regions, to some 20 exhibitions annually.
  • Having 30+ years of experience in the exhibition industry, Mr. Parry Chung, the interviewee, is the General Manager of Adsale Exhibition Services Ltd. He holds the steering wheels of Adsale’s textile and woodworking industry events.
  • Adsale’s textile technology serials exhibitions, namely Zhejiang International Trade Fair for Textile and Garment Industry (ZhejiangTex), Sports Tech Asia, and The International Exhibition on Textile Industry (ShanghaiTex), have served the industry for over decades. These events are usually scheduled in May, July and November respectively, serving different market segments of the industry in China.
  • As a biennial event, ShanghaiTex, started in 1984, has been gathering various textile and fashion technological innovations to inspire the future of the textile industry. The 20th ShanghaiTex will come back at the Shanghai New International Expo Centre from 23-26 November 2021, showcasing a range of top-notch textile machinery and technology, covering a total exhibition area of 100,000 sq.m.
  • To be held in Yiwu City, the world’s largest wholesale market, ZhejiangTex will be organized from 12-14 May 2021 for the 21st edition, at the Yiwu International Expo Centre. Riding on the needs of Yiwu market with a theme of “Innovative Textile for Health”, the fair focuses on the technological advancement of intimate wear, which targeting to help enterprises in the region to grasp the latest Industry dynamics. In each edition, it attracts over 10,000 visitors passing through the fair’s door for the sourcing of hosiery technology.
  • Sports Tech Asia, majorly promoting sports clothing technology, has a target on advanced machinery and high-tech materials about sports apparels. As a co-locating show with ISPO Shanghai, a daughter show of ISPO MUNICH, Sports Tech Asia aims at creating synergies between the upper and lower stream of sports goods production, as a new driving force of the sports clothing in China.
Mr. Parry Chung - Adsale Exhibition Services Ltd.
Mr. Parry Chung, the General Manager of Adsale Exhibition Services Ltd.

2) Could you please tell us how is the textile industry situation in your region now?
The pandemic of COVID-19 has caused serious damage globally, both in terms of economics and people’s livelihood.

According to the World Bank forecast in June 2020, the global economy will decline by 5.2% in 2020. At the same time, global trade activities have also suffered severely, and it is expected that global trade volume will decline by 13.4% in 2020.

China is equipped with the best textile technology and she is also the world’s largest and the most vibrant manufacturer of garment and textile products. As the industry heavily relies on global supply chain, the lockdown in some area has created material shortage and transportation/ travel limitation, causing significant down turning of the industry globally.

According to the data from the National Bureau of Statistics, from January to April 2020, the production scale of textile enterprises continued to decline by 11.3%, a decrease of 5.2 % from January to March.

Among various parts of the production chain, technical textile is the only sector in which has resulted in a significant increase, with an annual surge of 33.8%.

ShanghaiTex 1 - Adsale Exhibition Services Ltd.
ShanghaiTex 2019

As the consumption of apparel goods, including clothing and shoes, is not regarded as the primary needs during the pandemic, National Bureau of Statistics shown that sales figure has decreased by 29.0% in compared with the same period of last year.

3) How has the pandemic had an impact on the textile industry and your business?
Amidst the pandemic situation, the demand for apparel consumption in the key global markets has dropped obviously, which is very understandable. Products like clothing and accessories were regarded as secondary during the lockdown time, and the drop of sales figures is actually predictable.

According to the data from the National Bureau of Statistics, from January to April 2020, the total retail sales of consumer goods in china amounted to 10.658 trillion yuan, a decrease of 16.2% in compared with last year.

Even for global brands like Zara, J.Crew, Gap, etc., physical shops are closing down in a stunning scale. Many of them are focusing on clearing stocks and cutting lost, rather than business growing.

Shanghaitex 2019
ShanghaiTex 2019

On the other hand, the demand for epidemic prevention materials has surged significantly. Masks have become important export support of China. According to the customs statistics, from January to April, the sale amount of masks exports to the United States, Japan, and the European Union accounted for over half of the total export sales volume.

We could also see that international brands like LV, Dior, Bulgari, etc. have issued “special editions” of sanitary products like masks and hand spray to cater to the “needs” of the situation.

The pandemic has brought a lockdown to people’s daily activities, including a sharp halt to the pulse of the global exhibition industry. Many of the organizers have to postpone their shows to the coming year or, even to cancel them.

The whole supply chain inside the ecosystem of the exhibition industry is also detrimentally affected, and quite some of the suppliers have decided to shut down their companies as no businesses could be achieved during the time. It is a burning question to all organizers to find a way to bridge the needs of buyers and sellers at their platform under such a pandemic time.

Nevertheless, China has a very strong consumer market which helps driving all wheels to go forward again. According to Oxford Economic, China will contribute 44% to the global consumer market by 2040, which would then be 3.5 times than that of the US. As China possesses the world’s no.1 manufacturing ability, while her consumption power also ranked second at the moment, we believe that China’s exhibition industry would be picking up soonest, as trade fairs are the best thermometer of the market temperature.

ShanghaiTex 2019-middle-east-textile-journal
ShanghaiTex 2019

4) Is there any policy issued by local government or associations that may help the industry recover?
It is foreseeable that global economic and trade activities will sharply decline in 2020, and the storm might be lingering until the first half of 2021. The OECD countries also recorded an upsurge of unemployment rate by an unprecedented 2.9 percentage in April 2020 to 8.4%, compared to 5.5% in March, reflecting the very impact of Covid-19 in economies.

In mid-June, the central government of China has confirmed that a 2 trillion yuan ($282.4 million) in funds will be delivered by central authorities as “business rescue packages”, a special bailout measure, to ease the economic shocks from the novel coronavirus pandemic.

For China, we should also see that the current domestic epidemic prevention and control continues to improve, and the resumption of manufacturing in full swing could be in sight soonest. According to the Ministry of Industry and Information Technology, as of May 18, 2020, the average opening rate of industrial enterprises and the return rate of employees reached 99.1% and 95.4% respectively. This indicated that the manufacturing of China is stepping back to normal.

ZhejiangTex - Adsale Exhibition Services Ltd.
ZhejiangTex 2019

With the implementation and promotion of relevant policies such as tax cuts, stimulating consumption, expanding infrastructure investment, stabilizing employment and ensuring people’s livelihood, domestic market’s consumption will gradually recover, and the quality of the textile industry’s operation in the second half of the year will also be seen as possible.

The Chinese government also encourages export enterprises to eye on domestic markets, via the building of brands and to start from online retailing, which China is very strong at. According to Taobao platform, in March 2020, the sales growth rate of women’s clothing and home textile products were 3.5% and 10.8% respectively. By April 2020, the growth rate has increased to 47.5% and 34.4% respectively. And men’s clothing products are also in the recovery stage.

With the help of the government and so as the local consumption expansion, we believe that the textile/ garment market in China would still be on the track to recover, at a speed that would surprise its counterparts.

5) What have the industrial manufacturers done in streamlining their business during this period of time?

As we can see from news, many global brands are closing down their physical shops and will rely more on online selling. Indeed it’s a good way to reshape the sales channel. However, it doesn’t help to heal the root problem of the production chain.

ZhejiangTex - Adsale Exhibition Services Ltd.
ZhejiangTex 2019

In the past, the making of clothing might rely heavily on the idea solely from fashion designers or trends to be set on. As for now, we foresee that everyone in the industry would need to learn and adopt the latest textile/ design technology in their daily work. Technology is the only thread that could pull through all parts of the supply chain, from raw materials making, new functions for sanitization or movements, fashion design, to customization or delivery of the products. Only by incorporating technology in the textile and fashion manufacturing process, enterprises could be equipped with the power to move on under the new normalcy of the post-COVID-19 time.

6) How is your prediction for the post-COVID-19 period of the textile industry? any barriers? What is your strategy for this period?
As an organizer of textile technology events, we would target the promotion channels that would help our exhibitors and buyers to create products which are essential in the upcoming post-COVID-19 era. From our point of view, the ordinary way of garments and textile manufacturing would be faded out. Functional garments with more digital/ electronic elements would prevail.

Sports Tech Asia -Adsale Exhibition Services Ltd.
Sports Tech Asia 2019

7) For the global textile industry, how do you think is the best way to overcome the industrial crisis and better cooperate in this scenario?
After the pandemic, we would see that globalization has been redirected to a new era. The traditional way of procurement and distribution would no longer be necessary. As a change, digitalization and cross-industry cooperation would be the key, as we see, to succeed in the coming future, not only for textile but for all industries.


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Kohan Textile Journal is the leading magazine for the Textile industry, Textile machinery, Synthetic Fibers and Nonwovens in MENA region (the Middle East and North Africa) and is published every two months. It basically emphasizes on textile machinery, textile products, carpet and synthetic fibres distributed among the factories, manufacturers, and traders of floorcovering industries.l

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