When the annual output value of curtain fabrics approaches 70 billion yuan and nearly 8,000 enterprises compete for orders in the same region, price wars are almost inevitable. But the signals from the 2026 China Home Textile Association Fabric Branch Annual Meeting indicate that this industrial cluster is collectively seeking a new path out of the low-margin quagmire. Held on August 12 in Keqiao, Shaoxing, the meeting placed three keywords on the table: original design, AI spatial intelligence, and cross-border e-commerce. This marks a shift in the competitive logic of home textile fabrics from 'capacity competition' to 'value competition.'
Industrial Background: Massive Scale, Squeezed Profits
Keqiao is known as 'an economic powerhouse built on a piece of cloth,' and the data speaks for itself: in 2025, the China Light Textile City's transaction volume exceeded 440 billion yuan, with nearly 8,000 curtain fabric enterprises, an annual output value of nearly 70 billion yuan, and cross-border online transactions reaching 800 million to 900 million US dollars. This is a complete industrial chain from yarn, weaving, dyeing and finishing to finished products and sales, with obvious scale advantages. However, the flip side is that Liang Pengcheng, Vice President of the China National Textile and Apparel Council, stated in his speech that production, sales, and exports grew steadily in the first half of the year, but pressure from weak demand and trade fluctuations remains. Zhu Xiaohong, President of the China Home Textile Association, pointed out the crux: due to the downturn in real estate and rising raw material costs, corporate profits are under pressure, and exports show a trend of volume growth but price decline.
What does volume growth with price decline mean? Simply put, companies sell more goods but earn less money. Behind this is the peak of the traditional growth model—the old path of diluting costs through scale and competing for orders through low prices has reached its limit. For buyers, this means that a procurement strategy based solely on price comparison will find it increasingly difficult to identify sustainable suppliers; for factories, it raises a must-answer question: besides being cheaper, what else can I offer customers?
Breakthrough Paths: Design, AI, and Going Global
The meeting's answer is clear: value growth rather than scale expansion. At the start of the '15th Five-Year Plan' period, new quality productive forces are repeatedly emphasized, but what are the specific starting points for the fabric industry? Four panel discussions outlined three clear paths.
The first is original design. Lin Shaowu, brand consultant for Tianyu New Materials, directly addressed the industry's pain point—price wars caused by product homogenization. The solution is to return to users' real home scenarios, such as focusing on the 300 million people with sleep disorders, separate bedding, and home office needs, combining temperature control and antibacterial functions with healing colors and layered textures, while building a product matrix of image products, profit products, and traffic products, and using a unified design language to build brand recognition and pricing power. This means design is no longer just about drawing; it becomes a component of brand assets, directly determining whether a company can escape low-price competition.
The second is AI empowerment. Zhao Lu, Global VP of Collov AI, offered a striking perspective: spatial AI is the key to improving efficiency in the fabric industry. Traditional sampling, real-scene photography, and scene expression are costly, but with world models, spatial analysis, material replacement, and one-click real-scene generation can be achieved, saving hundreds of thousands in offline sampling and photography costs. Commercial soft furnishing is listed as a priority track, where AI standardized solutions can enhance bidding competitiveness. More notably, he emphasized that fabric physical data is a company's long-term core asset—a reminder that data accumulation will determine future competitive position.
The third is export growth. Zhang Xiaocun, partner at Modern Media's home textile business, used TikTok data: the platform covers over 150 countries with 2 billion monthly active users, and home furnishing categories in Southeast Asia and Latin America are growing faster than the global average. Specific tactics include immersive short videos, local influencer collaborations, and live-streaming tracing Keqiao's industrial cluster, as well as a three-tier product matrix for cross-border stores: basic, functional, and co-branded. For Keqiao enterprises, this is not just about selling goods overseas, but also about building brand awareness through the cluster's story.
Impact on the Upstream and Downstream Chain
These trends are transmitting upstream and downstream. For upstream fabric factories, functionalization and digitalization are no longer optional. Technical sharing by Ji Feng, Associate Professor at Donghua University, showed that AI intelligent color matching can solve digital printing color difference issues, and CNN deep learning can quickly identify fabric composition non-destructively, replacing traditional chemical testing. This means technical barriers are rising but also lowering—small-batch, multi-variety flexible production becomes possible, allowing factories to respond more agilely to market demand.
For downstream buyers and foreign trade companies, the most direct impact is that supplier selection criteria must change. In the past, the focus was on capacity and price; now, design capability, digitalization, and cross-border operational capacity must also be considered. Keqiao's advantage lies in its cluster effect—nearly 8,000 enterprises mean abundant choices but also a mix of good and bad. In the future, those that survive and thrive will be the ones that invest early in design and AI, as they hold the key to pricing power and channel initiative.