June is typically a critical transition period for textile and apparel specialized markets, shifting from spring/summer to autumn/winter collections. According to the latest monitoring data from the China National Textile and Apparel Council (CNTAC), the national specialized market manager sentiment index for June stood at 49.78, up 0.43 points from May, while the merchant sentiment index reached 50.07, up 0.34 points. On the surface, both indices hover near the boom-bust line of 50, suggesting a tentative stabilization. However, a deeper dive into sub-indicators reveals a clear structural divergence: the operational recovery at the market level has not effectively translated into improved profitability for merchants.
Divergence Between Rising Footfall and Falling Prices
From the manager's perspective, the June total business volume index remained flat month-on-month, while the logistics dispatch volume index rose 0.64 points to 49.03. More encouraging signals came from foot traffic and store opening rates: the foot traffic index also increased by 0.64 points, and the store opening rate index climbed 0.32 points. This indicates that physical market operations are genuinely improving, with over 77% of markets reporting stable total business volumes and logistics.
Yet, the merchant-side data tells a different story. The average selling price index for merchants in June was only 49.30, a decline of 0.22 points from May, remaining in contraction territory. The profitability index, while recovering 0.89 points to 49.86, still failed to break above the 50 threshold. The sales volume index, however, rose 1.03 points to 50.14, entering expansion territory for the first time. This combination of 'higher sales volume, lower prices, and marginal profitability' suggests that merchants are resorting to price cuts to drive volume, and market competition remains intense despite the recovery in foot traffic.
The Dual Squeeze of Rising Costs and Inventory Optimization
A concerning trend is the merchant comprehensive cost index, which fell 0.19 points to 50.63 in June. Although still above 50, indicating manageable cost pressure, the downward trend signals a tightening cost environment. More strikingly, 6.99% of merchants reported increased operating costs, a proportion that surged by 6.99 percentage points from May—nearly doubling. Meanwhile, the inventory index rose 0.21 points to 50.00, with 10.49% of merchants reducing inventory, an increase of 8.44 percentage points from the previous month.
These data points collectively paint a picture of simultaneous 'inventory destocking' and 'cost control.' Under pressure from falling selling prices, merchants are proactively reducing inventory to free up cash flow, but rigid costs such as raw materials and labor are not declining in sync. For small and medium-sized enterprises in the textile supply chain, this means further compression of profit margins, making capital turnover efficiency a critical factor for survival.
E-commerce: The Only Bright Spot Across the Board
Among all sub-indicators, e-commerce sales stood out as the only area showing strength for both managers and merchants. The manager e-commerce sales index reached 51.61 in June, up 0.64 points from May, while the merchant e-commerce index was 50.49, also up 0.35 points. 22.58% of market managers reported an increase in e-commerce sales, expanding by 6.45 percentage points from the previous month, and 9.79% of merchants saw e-commerce sales rise, a jump of 8.42 percentage points.
This data sends two signals. First, the 'going online' of traditional offline specialized markets is no longer an option but a necessity for maintaining sentiment levels. Second, the marginal contribution of e-commerce channels to merchants is accelerating. In an environment where in-store average transaction values are under pressure, online channels offer more flexible pricing and broader customer reach. It is foreseeable that during the peak autumn/winter procurement season in the second half of the year, the ability to integrate e-commerce will become a key differentiator in merchant performance.
Diverging Confidence in Forward-Looking Indices
Looking ahead to July, managers and merchants show different expectations. The manager forward-looking sentiment index for the next period was 50.32, down 2.91 points from May, and the forward-looking business environment index was 50.97, down 1.93 points. This slight pullback in manager expectations likely reflects caution regarding the traditional summer slack season and the momentum of end-consumer demand.
Merchants, on the other hand, are relatively more optimistic: their forward-looking sentiment index rose 0.70 points to 50.84, and the forward-looking business environment index also increased 0.77 points to 50.84. This divergence may be interpreted as merchants feeling more positive about inventory digestion and cash flow improvement after the 'volume-for-price' strategy in June. However, it is important to note that all forward-looking indices, while above 50, are only marginally so. The industry remains in a 'cautiously optimistic' zone, far from a trend reversal.