June, traditionally a transitional month between the low and peak seasons, delivered a mixed signal from China's textile and apparel wholesale markets. The manager sentiment index stood at 49.78, up 0.43 points month-on-month, while the merchant sentiment index reached 50.07, up 0.34 points. On the surface, both core indicators moved positively. However, a deeper dive into sub-indices reveals an uneven recovery: the manager side was driven by foot traffic and logistics volumes, while merchants experienced a squeeze between rising sales volumes and declining average selling prices and profits.
Market Side: Foot Traffic and Logistics Recover, Rents Stabilize
From the manager perspective, the key variables in June were foot traffic and logistics dispatch volumes. Both indices recorded 49.03, up 0.64 points each from the previous month. The store-opening rate index also rose 0.32 points to 49.35, suggesting a marginal improvement in vacancy rates. Notably, the rent index stood at 50.65, up 0.33 points, with 93.55% of markets reporting stable rents. This indicates that downstream demand has not collapsed sharply, and wholesale markets retain some pricing power as distribution hubs.
However, the total business volume index remained flat at 49.03, implying no significant expansion in overall transaction scale. 77.42% of markets reported flat business volumes, and the same proportion reported flat logistics dispatch volumes, confirming a pattern of stable volumes and stable prices. For buyers, this means wholesale prices for fabrics and garments are unlikely to see sharp swings in the near term.
Merchant Side: Sales Recover but Profits Remain Squeezed
Merchant-level data better reflects the real situation of frontline operators. The sales volume index rose 1.03 points to 50.14, returning above the boom-bust line, indicating faster shipment. But the average selling price index fell 0.22 points to 49.30, and the profitability index, despite rising 0.89 points, remained in contraction territory at 49.86. This points to a clear trend: merchants are trading volume for price, using discounts or promotions to clear inventory and generate cash flow, but at the expense of profit margins.
Cost-side pressures are also building. The comprehensive cost index fell 0.19 points to 50.63. Although still above 50, the directional change is noteworthy. 6.99% of merchants reported higher operating costs, a proportion that surged by 6.99 percentage points from the previous month. Meanwhile, the inventory index rose 0.21 points to 50.00, with 10.49% of merchants reducing inventory, up 8.44 percentage points from May. This confirms destocking is progressing, but at the cost of profits.
E-commerce: The Only Bright Spot and a Hidden Concern
Against the backdrop of offline channel pressure, e-commerce sales stood out as the brightest spot in June's data. The manager e-commerce sales index was 51.61, up 0.64 points month-on-month; the merchant e-commerce sales index was 50.49, up 0.35 points. 22.58% of markets reported increased e-commerce sales, up 6.45 percentage points from May; 9.79% of merchants reported the same, up 8.42 percentage points.
This indicates that wholesale markets and merchants are accelerating their shift online. However, e-commerce channels typically have lower profit margins than offline wholesale, and higher operating costs (traffic acquisition, logistics, returns). For small and medium-sized merchants, growth in e-commerce sales may not quickly translate into net profit improvement.
Outlook: Divergent Confidence, Uncertainty in July
Forward-looking indicators showed an interesting divergence. Managers' expectation index for the next period was 50.32, down 2.91 points from May, while their business environment expectation index was 50.97, down 1.93 points. In contrast, merchants' expectation index for the next period was 50.84, up 0.70 points, and their business environment expectation index was also 50.84, up 0.77 points.
Managers' caution contrasts with merchants' optimism. This may reflect their different positions in the supply chain: managers have access to rent and foot traffic data and are more cautious about the sustainability of demand recovery, while merchants focus on their own shipments and inventory levels, and June's sales rebound gave them more confidence. All four expectation indices remain above 50, indicating that overall sentiment has not turned pessimistic. But whether the recovery can continue into July depends on whether end-consumer demand truly picks up.