The market side and the merchant side presented distinctly different sentiment profiles in June. According to the latest monitoring data from the China National Textile and Apparel Council, the national textile and apparel professional market manager sentiment index was 49.78, up 0.43 percentage points month-on-month, while the merchant sentiment index was 50.07, up 0.34 percentage points. Although both indices are recovering, the manager index remains below the 50-point threshold, while the merchant index has just crossed it, indicating that the market as a whole has not fully exited the contraction zone but marginal improvement is emerging.
Market Side: Flat Business, Recovering Traffic
From the manager perspective, overall market business performance was largely flat. In June, 77.42% of professional markets reported total business volume unchanged from the previous month, and the same proportion reported logistics dispatch volume unchanged. The total business volume index stood at 49.03, flat month-on-month, while the logistics dispatch volume index was 49.03, up 0.64 percentage points, suggesting a slight acceleration in goods turnover. More positive signals came from customer traffic and store opening rates: the customer traffic index was 49.03, up 0.64 percentage points, and the store opening rate index was 49.35, up 0.32 percentage points. Notably, 6.45% of professional markets saw an increase in store opening rates, up 6.45 percentage points from the previous period, while the share of markets with declining customer traffic dropped from 22.58% to 16.13%, indicating that more markets are emerging from the trough of customer flow. The rental index was 50.65, up 0.33 percentage points, suggesting a stabilization in shop leasing demand.
Merchant Side: Sales Recover, Profitability Under Pressure
The improvement on the merchant side is more nuanced. The sales volume index was 50.14, up 1.03 percentage points, returning above the threshold, but the average selling price index was only 49.30, down 0.22 percentage points, remaining below 50. The profitability index was 49.86, up 0.89 percentage points, yet still below 50. This means merchants are selling more units but with narrower margins and lower prices. Specifically, 18.18% of merchants reported a decrease in total sales, up 7.22 percentage points from the previous period; 19.58% reported a decrease in profits, up 8.62 percentage points; and 18.88% reported a decline in selling prices, a sharp increase of 12.03 percentage points. Price pressure is accelerating.
Costs and Inventory: Rising Cost Pressure, Easing Inventory
The merchants' comprehensive cost index was 50.63, down 0.19 percentage points month-on-month. Although still above 50, the downward trend indicates increasing cost pressure. 6.99% of merchants reported an increase in operating costs, up 6.99 percentage points from the previous period, a change worth noting. On the inventory front, the inventory index was 50.00, up 0.21 percentage points, with 10.49% of merchants reducing inventory, up 8.44 percentage points, indicating some progress in destocking. The combination of rising costs and falling inventory reflects merchants actively controlling stock levels under low-profit conditions while facing rigid costs such as raw materials or rent.
E-commerce Channel: Stable Improvement as Growth Driver
E-commerce was one of the few bright spots in June. The manager e-commerce sales index was 51.61, up 0.64 percentage points, and the merchant e-commerce sales index was 50.49, up 0.35 percentage points. 22.58% of professional markets reported an increase in e-commerce sales, up 6.45 percentage points from the previous period, and 9.79% of merchants reported an increase, up 8.42 percentage points. The penetration of e-commerce channels is steadily increasing, providing an important means to offset offline pressure for markets and merchants facing insufficient foot traffic.
Forecast Indices: Divergent Confidence but Overall Optimistic
The forecast indices show some divergence in confidence. The manager next-period sentiment index was 50.32, down 2.91 percentage points, and the next-period business environment index was 50.97, down 1.93 percentage points, indicating that market managers' expectations for July have cooled somewhat. In contrast, merchants' next-period sentiment index was 50.84, up 0.70 percentage points, and their next-period business environment index was also 50.84, up 0.77 percentage points. Merchants' confidence for July has strengthened, possibly due to sustained e-commerce growth and the approaching traditional autumn-winter stocking season. All four forecast indices are above 50, indicating cautious optimism for the coming month.