Slight Rise in Professional Market Sentiment Index: Structural Divergence Underway in Textile and Apparel Industry

In June 2026, China's textile and apparel professional market sentiment indices both edged up: the manager index reached 49.78 and the merchant index 50.07, up 0.43 and 0.34 percentage points month-on-month respectively. On the surface, this signals a recovery in market confidence. However, a breakdown of sub-indices reveals a clear structural divergence: market-level improvements coexist with merchant-level pressures, while cost and inventory dynamics shift in opposite directions.

Market Operations: Traffic and Logistics Recover, but Total Turnover Stagnates

The manager-level data shows relatively positive signals. The logistics dispatch volume index and foot traffic index both rose 0.64 points from the previous month, while the store opening rate index increased by 0.32 points. Over 77% of professional markets reported total turnover flat from the previous month, and logistics volumes remained stable, indicating that physical distribution efficiency is recovering. The rental index stood at 50.65, above the boom-bust line, suggesting that rents have not loosened significantly and property-side operations remain stable.

However, the total turnover index stayed at 49.03, unchanged from the previous month and still below the 50 threshold. This means that while markets appear busier, actual transaction volumes have not expanded correspondingly. The efficiency of converting foot traffic into orders remains low, likely a core bottleneck for wholesale operations.

Merchant Side: Sales Recover but Profitability Strains, Price War Signs Emerge

Data at the merchant level tells a more complex story. The sales volume index rose to 50.14, up 1.03 points from the previous month, indicating improved sell-through at the terminal. The profitability index also rose 0.89 points month-on-month but remained stuck at 49.86, failing to cross the 50 threshold. More concerning is the average selling price index: it fell to 49.30, down 0.22 points from the previous month, and the proportion of merchants reporting price declines surged by 12.03 percentage points.

This suggests that merchants may be trading volume for price—selling more units but with thinner margins per item. The comprehensive cost index declined by 0.19 points, indicating rising operating cost pressures, while the inventory index rose 0.21 points to 50.00, offering slight relief on inventory pressure. Overall, merchants are operating in a 'volume up, profit thin' environment, with price competition showing signs of intensifying.

E-commerce Channel: Incremental Contribution Continues to Grow

The e-commerce segment performed notably well in June. The manager e-commerce sales index reached 51.61, up 0.64 points from the previous month; the merchant e-commerce sales index stood at 50.49, up 0.35 points month-on-month. 22.58% of professional market managers reported an increase in e-commerce sales, up 6.45 percentage points from the previous month; 9.79% of merchants saw e-commerce sales grow, a jump of 8.42 percentage points.

Online channels are becoming a significant incremental source of revenue for professional market merchants, especially small and medium-sized players leveraging live streaming and community-based distribution to reach lower-tier markets. This imposes new demands on traditional wholesale business models—relying solely on foot traffic is no longer sufficient; online-offline integration is shifting from an option to a necessity.

Forward-Looking Indices: Managers Cautious, Merchants Optimistic

Forward-looking indicators show an interesting divergence. Managers' expectations for July stood at 50.32, down 2.91 points from the previous month, while their business environment expectations also fell by 1.93 points. In contrast, merchants' expectations for the coming month rose to 50.84, up 0.70 points, and their business environment expectations increased by 0.77 points.

Managers' caution likely stems from concerns about the pace of macroeconomic consumption recovery and pressure from fixed costs like rent and labor. Merchants' optimism may be driven by expectations of seasonal orders (e.g., autumn/winter stocking) and continued growth in e-commerce channels. The gap in expectations between the two groups reflects differing judgments across the supply chain.

Practical Recommendations

For Buyers - Capitalize on the 'volume for price' window: With the average selling price index declining in June, some merchants may offer more flexible pricing to clear inventory. Increase inquiries to lock in cost-effective fabrics or garments. - Prioritize professional markets with strong e-commerce support: Markets with rising e-commerce sales indices typically have better logistics, drop-shipping, and after-sales infrastructure, shortening the cycle from procurement to end-consumer. - Diversify orders and keep batch sizes moderate: Given strained merchant profitability, large orders may yield limited price concessions. Placing smaller, staggered orders allows testing market response while reducing inventory risk.

For Exporters - Use the market recovery window to accelerate sample promotion: With foot traffic and logistics volumes rebounding in June, it is an ideal time to visit professional markets with new fabric and accessory samples, establish joint selection mechanisms with domestic wholesalers, and connect orders to overseas markets. - Monitor cost transmission chains: The decline in the comprehensive cost index suggests raw material or processing costs may still be volatile. For export quotes, consider short-term floating pricing to protect margins from cost fluctuations. - Leverage e-commerce channels for small-batch, fast-response trials: With merchants' e-commerce sales growing, exporters can collaborate with online distributors in professional markets to test niche overseas markets using small-lot, multi-batch models.