Wool Industry Restructuring: Insights from Dalang's 900 Million Sweaters on Global Supply Chain Intelligence and Green Transformation

One out of every five sweaters globally is produced in Dalang, Dongguan. Behind this statistic lies an industrial cluster with an annual transaction value exceeding 72 billion yuan and a technological revolution reshaping the wool industry.

Industrial Clusters and Data Contrasts

Dalang, as a renowned woolen town in China, has an annual garment output exceeding 900 million pieces, with a full industry chain transaction value surpassing 72 billion yuan. This scale advantage is not isolated but a microcosm of the overall strength of China's textile industry. China produces over 70 billion garments annually, accounting for more than 50% of the global total, with annual fiber processing volume stable at over 60 million tons.

However, behind the scale lie subtle structural changes. From January to April 2025, revenue of large-scale textile enterprises decreased by 0.3% year-on-year, but total profits surged by 19.3%, with a profit margin of 2.9%. This indicates a shift from volume expansion to quality improvement. During the same period, retail sales of clothing, footwear, hats, and textiles by enterprises above the designated size reached 512.13 billion yuan, up 8.1% year-on-year, accelerating by 5 percentage points compared to the previous year, with domestic demand becoming a key support.

Exports showed divergence: from January to May, textile and apparel exports totaled 116.73 billion USD, up 0.1% year-on-year, with textile exports at 59.48 billion USD, up 1.7%, while apparel exports fell 1.6% to 57.24 billion USD. The resilience of intermediate goods exports underscores China's role as a 'ballast stone' in the global supply chain, but the decline in finished garment exports signals volatility and structural adjustments in global consumer markets.

Technology-Driven Paradigm Shift

The 95th International Wool Textile Conference, themed 'Smart Weaving the Future: Wool's Health and Digital Life,' captures the core of industry transformation. As natural fibers meet digital technology, the wool industry is shifting from traditional manufacturing to a dual-engine model of smart and experience economies.

On the production side, artificial intelligence has deeply penetrated the entire chain from design to manufacturing and management. For example, Jiangsu Yueda Textile's 'Lighthouse Factory' reduced labor per 10,000 spindles by about 70%, increased total labor productivity by more than four times, cut unit energy consumption by 15%, and lowered processing costs by 26%. Semir's AI-assisted design system boosted overall design efficiency by 35%, with pattern design efficiency improving over 200%; Bosideng's 'AI Aesthetic Brain' reduced sample development costs by over 60%. These figures show that intelligence is no longer a concept but a tangible cost and efficiency advantage.

More profoundly, the smart economy is reshaping the industrial ecosystem. From smart workshops and digital design to AI quality inspection and industrial internet platforms, the digitalization rate of key processes in China's textile industry has reached 63.2%, exceeding the national manufacturing average. In 2024, 30 textile enterprises were included in the 5G factory directory. The accelerated adoption of green technologies such as non-aqueous dyeing and digital printing has further improved resource efficiency.

Global Landscape and Local Responses

The complexity of global markets is increasing. The IMF has downgraded its 2026 global growth forecast from 3.4% to 3.1%, with geopolitical conflicts, energy fluctuations, and financial tightening adding uncertainty to the wool industry. However, China's scale and system advantages provide 'certainty' for the global supply chain.

Dalang, as a typical industrial cluster, responds swiftly. With one in five sweaters worldwide made here, any technological or market change quickly transmits through the entire chain. Currently, enterprises are transitioning from pure manufacturing to brand building and value enhancement. Brands like Anta and Shein have entered the global top 500, while companies like Hengli, Weiqiao, Erdos, and Shenzhou International are deepening global cooperation through cross-border M&A and multi-brand operations, signaling the Chinese wool industry's shift from 'world factory' to 'global value creator.'

Practical Recommendations

For Buyers - Prioritize intelligent factories for capacity and delivery advantages: AI quality inspection and flexible manufacturing can significantly shorten lead times and reduce defect rates; prioritize suppliers with digital certification. - Evaluate green production metrics: Technologies like non-aqueous dyeing and digital printing not only meet environmental regulations but also enhance product premium; request energy consumption and emission data from suppliers. - Leverage AI-assisted design tools: Collaborate with factories equipped with AI design capabilities to quickly fulfill small-batch, multi-style custom orders and reduce inventory risks.

For Foreign Trade Companies - Adjust export product mix: Given the decline in apparel exports and growth in textile exports, increase the proportion of intermediate goods like fabrics and yarns to consolidate advantages in the supply chain's middle links. - Tap into the smart economy's new markets: The rise of one-person companies and 'hand-crafted economy' saw a 47% year-on-year increase in new OPC registrations in China in the first half of 2025, signaling growing demand for small-batch, personalized orders; enhance flexible response capabilities. - Invest in branding and localization: Build brand recognition in target markets through cross-border M&A or multi-brand operations to reduce reliance on pure OEM models and enhance risk resilience.