A wool knitting cluster with an annual transaction value exceeding 72 billion RMB is becoming a testing ground for digital transformation in the global wool textile industry. The 95th International Wool Textile Conference recently concluded in Dalang, Dongguan, a town known for producing one out of every five sweaters worldwide. The event showcased how traditional wool fibers are deeply integrating with digital technology, health-conscious consumption, and green responsibility.
Scale Effects and Technological Bottlenecks
Dalang's wool textile industry boasts impressive scale: garment production exceeds 900 million pieces annually, with total industrial chain transaction value surpassing 72 billion RMB. This scale is underpinned by a highly concentrated industrial cluster spanning raw material procurement, yarn processing, garment manufacturing, and logistics. However, scale advantages bring pressure for technological upgrading. Sun Ruizhe, president of CNTAC, noted that R&D investment intensity among China's textile enterprises above designated size has risen from 1% in 2020 to 1.3% in 2024, with 63.2% of key processes digitized—above the national manufacturing average. For clusters like Dalang, pure capacity expansion has peaked, making the shift to smart manufacturing and green production inevitable.
Notably, Dalang is not unique. China processes over 60 million tons of fiber annually and produces more than 70 billion garments, accounting for over 50% of global output. Textile exports have exceeded $300 billion for six consecutive years, with strong exports of intermediates like chemical fibers and fabrics stabilizing global supply chains. Yet this stability faces challenges from geopolitical tensions, energy volatility, and financial tightening, compelling the industry to find new value anchors.
Dual Impact of Intelligent and Experience Economies
The conference theme, 'Smart Weaving the Future: Wool's Health and Digital Life,' precisely captures two major trends reshaping the wool industry: the intelligent economy and the experience economy. On the technology side, AI is transforming production organization. For instance, Jiangsu Yueda Textile's 'Lighthouse Factory' has reduced labor per 10,000 spindles by 70%, boosted total labor productivity fourfold, cut energy consumption by 15%, and lowered processing costs by 26%. This signals that traditional labor-intensive wool production is being replaced by data-driven flexible manufacturing.
On the consumption side, global markets show ecological restructuring, human-centric regression, and structural differentiation. Consumers prioritize health, emotional connection, and self-expression. Wool's natural properties—breathability, warmth, biodegradability—align with these trends. However, translating raw material advantages into brand premiums remains a challenge for domestic wool companies. While brands like Anta and SHEIN have entered the global top 500, overall international recognition of Chinese wool brands still has room to grow.
Data Behind the Industry's Pulse
China's textile industry has maintained resilience amid pressure. From January to April, operating revenue of enterprises above designated size fell 0.3% year-on-year, but total profit surged 19.3%, with an operating profit margin of 2.9%. This contrast suggests progress in cost reduction and efficiency gains, but weak revenue growth. Retail sales of garments, shoes, hats, and textiles by units above designated size totaled 512.13 billion RMB, up 8.1%, indicating resilient domestic demand.
On exports, textile and apparel exports from January to May reached $116.73 billion, a slight 0.1% increase. Textile exports rose 1.7% to $59.48 billion, while apparel exports fell 1.6% to $57.24 billion. The decline in apparel exports reflects structural shifts in global demand—end brands prefer sourcing intermediates like fabrics over finished garments, demanding greater supply chain coordination.