In June 2026, China's textile and apparel specialized market sentiment indices posted modest gains. The manager sentiment index rose 0.43 points month-on-month to 49.78, while the merchant sentiment index climbed 0.34 points to 50.07, crossing the 50 threshold for the first time in recent months. These figures paint a complex picture of an industry slowly emerging from a trough, with market operators seeing marginal improvements in foot traffic and logistics, but merchants still struggling to balance profitability against rising costs.
Market Side: Foot Traffic Up, Sales Flat
Data from market managers shows the total sales index remained unchanged at 49.03, failing to reflect any boost from mid-year promotional events. However, the logistics dispatch index and foot traffic index both rose 0.64 points to 49.03. This suggests increased physical activity in markets did not translate into proportional sales growth. The store opening rate index edged up 0.32 points to 49.35, while the rent index recovered to 50.65, indicating some easing of vacancy pressure and slightly improved landlord bargaining power.
A notable detail: 77.42% of specialized markets reported flat total sales and flat logistics dispatch volumes compared to the previous month. This implies the majority of markets are in a 'stable but not growing' state, with incremental gains concentrated among a few leading markets. For fabric and accessory buyers, this means the supply-side competitive landscape remains unchanged, but logistics efficiency is improving, potentially shortening replenishment cycles.
Merchant Side: Volume Up, Margins Thinner
While the overall merchant sentiment index crossed 50, sub-indices reveal deeper contradictions. The sales volume index rose 1.03 points to 50.14, re-entering expansion territory, but the average selling price index fell 0.22 points to 49.30. The profit index, though up 0.89 points from last month, remained in contraction territory at 49.86. These data clearly point to a 'volume-for-price' strategy among merchants.
More concerning is the cost side. The comprehensive cost index fell 0.19 points to 50.63. Although still above 50, the downward trend signals increasing cost pressure. Data shows 6.99% of merchants reported higher operating costs, a share that rose 6.99 percentage points from the previous month. The inventory index rose 0.21 points to 50.00, indicating slight inventory relief, but likely achieved through discounting rather than genuine demand recovery.
From a category perspective, standardized products like garment fabrics and home textiles face more intense price competition, while merchants dealing in functional or differentiated fabrics retain greater pricing power. This divergence is especially stark given the average selling price index remains below 50.
E-commerce: Structural Bright Spot and Channel Dynamics
The standout feature in June's data is e-commerce performance. The manager e-commerce sales index rose 0.64 points to 51.61, and the merchant e-commerce sales index rose 0.35 points to 50.49, both firmly above the boom-or-bust line. Specifically, 22.58% of markets reported increased e-commerce sales, up 6.45 percentage points; 9.79% of merchants reported higher e-commerce sales, up 8.42 percentage points.
This indicates accelerating online-offline integration, but also intensifying channel competition. For wholesale merchants in specialized markets, e-commerce brings incremental orders but further compresses margins due to transparent price comparison and self-borne logistics costs. For fabric buyers, mature e-commerce channels facilitate small-batch, multi-variety sample sourcing, though bulk procurement still relies on physical inspection.
Outlook: July Confidence Divergence
Forward-looking indices show interesting divergence. Managers' expectation for July's sentiment index is 50.32, down 2.91 points; their business environment expectation is 50.97, down 1.93 points. In contrast, merchants' July sentiment expectation is 50.84, up 0.70 points; their business environment expectation is also 50.84, up 0.77 points.
This divergence is logical: managers focus on rent collection and overall operating costs, making them more cautious about the traditional summer low season. Merchants, having reduced inventory through June's price-cutting, are more hopeful for a modest July recovery. However, all four forward indices remain above 50, indicating that overall industry confidence has not collapsed but has shifted from 'recovery expectation' to a pragmatic 'bottom-grinding' mindset.