One out of every five sweaters globally comes from Dalang, a small town in Dongguan, Guangdong. With an annual transaction volume exceeding RMB 72 billion and garment output surpassing 900 million pieces, Dalang hosted the 95th International Wool Textile Conference. When delegates from the International Wool Textile Organization (IWTO) and global industry leaders gathered here, Dalang was no longer just a manufacturing hub—it became a lens to observe how China's wool industry is pivoting from volume to value.
From Scale Dividends to Efficiency Dividends
Data from the China National Textile and Apparel Council reveals an industry undergoing structural adjustment: from January to April 2025, revenue of enterprises above designated size edged down 0.3% year-on-year, but total profits surged 19.3%, pushing the profit margin to 2.9%. This signals a shift from scale-driven growth to efficiency-driven gains—smart manufacturing and digitalization are beginning to pay off.
Dalang's industrial clustering is not accidental. Behind the annual turnover of RMB 72 billion lies deep integration of open cooperation and supply chain support. However, this traditional cluster now faces the challenge of a fragmented global consumer market. Consumers no longer just want a warm sweater; they seek a balance between health, sustainability, and personal expression. The conference theme, 'Weaving the Future: Wool's Health and Digital Life,' precisely captures this shift.
AI Reshapes the Wool Value Chain
Artificial intelligence has permeated every link of wool production. The case of Jiangsu Yueda Textile's 'Lighthouse Factory' is telling: through smart manufacturing, labor per 10,000 spindles dropped by about 70%, overall labor productivity increased more than fourfold, energy consumption per unit fell 15%, and processing costs decreased 26%. This is not an isolated experiment but a microcosm of an industry where 63.2% of key processes are digitized—above the national manufacturing average.
More notably, AI is altering the factor structure of the wool industry. From AI-assisted design systems boosting R&D efficiency by 35% to 'digital employees' entering quality inspection and process management, labor-intensive links are being transformed. Bosideng's 'AI Aesthetic Brain' reduced sample development costs by over 60%, enabling the small-batch, multi-variety flexible production that is critical for responding to rapidly changing consumer demand.
With the global AI market projected to exceed USD 900 billion by 2026, and textile digitization already at 63.2%, the cost structure of wool enterprises is being rewritten. The coupling of computing power, data, and manufacturing capability will determine industry positioning in the next decade.
Two Irreversible Shifts: Green and Brand
The accelerated adoption of green technologies like waterless dyeing and digital printing is changing the environmental cost curve of the wool industry. Resource utilization efficiency has improved, and pollutant control has strengthened. This is not a passive response to policy pressure but a hard requirement from export markets, especially European buyers demanding carbon footprint traceability.
Signals on the brand side are equally clear. Companies like Anta and Shein have entered the global top 500 brands, while Hengli and Erdos are evolving from OEM suppliers to brand operators through cross-border M&A and global expansion. Dalang's capacity of 900 million garments per year, if coupled with brand premium, could leapfrog its industrial value.
Structural Opportunities Amid Headwinds
Data from January to May 2025 shows fixed asset investment in the textile sector rose 10.8% year-on-year, while apparel and chemical fiber fell 10.3% and 14.5%, respectively. This divergence points to a clear direction: capital is flowing into technology-intensive textile manufacturing, not simple capacity expansion. Textile exports grew 1.7%, while garment exports fell 1.6%, underscoring China's role as a 'stabilizer' in global supply chains through intermediate goods.
The IMF has downgraded its 2026 global growth forecast to 3.1%, with geopolitical tensions and shipping disruptions persisting. But for the wool industry, challenges also create opportunity windows: when global buyers seek more stable, transparent, and sustainable suppliers, those who have completed digital transformation and built green production systems will gain an edge in order competition.