One out of every five sweaters globally comes from Dalang, Dongguan. This small Pearl River Delta town has surpassed 900 million pieces in annual apparel output, with the entire industrial chain's transaction value exceeding 72 billion RMB. The data underscores the wool textile cluster's transition from traditional processing to digitalization and branding. At the recently concluded 95th International Wool Textile Conference, Dalang showcased the resilience of China's textile industry: despite slowing global growth, profits of large-scale enterprises rose 19.3% year-on-year in the first four months, with profit margins recovering to 2.9%.
Industry Data Sets the Tone: Profit Growth Alongside Investment Divergence
China's textile industry data from January to April reveals clear structural characteristics. Revenue of large-scale enterprises edged down 0.3%, but profits surged 19.3%, indicating improved profitability through product upgrades and cost control. Retail sales of clothing, shoes, hats, and knitwear at above-limit units reached 512.1 billion RMB, up 8.1%, with consumer demand remaining active.
However, investment divergence warrants attention. From January to May, fixed asset investment in the textile sector rose 10.8%, but apparel and chemical fiber sectors fell 10.3% and 14.5%, respectively. This suggests capital is flowing into upstream manufacturing like spinning and weaving, while downstream garment processing and chemical fiber expansion slow. For wool enterprises, this means upstream capacity concentration may increase, while downstream competition will rely more on efficiency than scale.
Smart Economy Reshaping: From 'Lighthouse Factories' to 'Digital Employees'
A core takeaway from the conference is that the smart economy is fundamentally altering cost structures and competitive advantages in wool textiles. The case of Jiangsu Yueda Textile's 'Lighthouse Factory' is telling: through smart manufacturing, labor per 10,000 spindles dropped about 70%, total labor productivity increased fourfold, unit energy consumption fell 15%, and processing costs decreased 26%. These figures imply that for wool enterprises with annual output exceeding 10,000 pieces, the payback period for digital transformation has shortened to 2–3 years.
More profound changes come from the mass deployment of 'digital employees.' IDC predicts billions of AI agents will enter the workforce by 2030. In wool textiles, AI-assisted design systems have boosted pattern design efficiency by over 200% and reduced sample development costs by more than 60%. For clusters like Dalang, small and medium enterprises can access AI quality inspection and smart scheduling through shared industrial internet platforms, lowering individual investment thresholds.
Experience Economy Drives: Wool's Health Narrative and Brand Premium
The conference theme, 'Woven Smart Future: Wool, Health, and Digital Life,' accurately targets two consumer trends: health demands and digital experiences. Amid global consumption divergence, wool's natural properties—breathability, warmth, biodegradability—are being revalued. Consumers are willing to pay a premium for 'health and comfort,' offering differentiation opportunities for wool brands.
Chinese companies like Anta and Shein have entered the global top 500 brands, while Erdos and Shenzhou International deeply integrate into global supply chains through cross-border M&A and multi-brand operations. For Dalang's wool knitwear firms, transitioning from OEM to ODM or OBM requires upgrading 'Made in Dalang' from a provenance label to a quality and design benchmark. The global popularity of Chinese-style fashion also provides a cultural narrative anchor for local brands.
Green Manufacturing and Global Synergy: Irreversible Trends
China's textile industry is accelerating green technology adoption. Technologies like waterless dyeing and digital printing have significantly reduced unit water consumption and pollutant emissions. The digitalization rate of key industry links has reached 63.2%, above the national manufacturing average. These green and digital capabilities are not only for domestic environmental compliance but also to meet overseas market requirements, such as EU supply chain carbon footprint regulations.
Global supply chain uncertainties persist—geopolitical conflicts, shipping disruptions, and financial tightening. Yet China's textile exports have exceeded $300 billion for six consecutive years, with stable exports of intermediates like chemical fibers and fabrics acting as a 'ballast' for global supply chains. For wool enterprises, establishing overseas production bases or joint ventures with local brands is a practical choice to diversify risk and stay close to markets.