In the first half of 2026, China's home textile and fabric industry delivered mixed results: export volumes grew while unit prices fell, and domestic demand was dampened by the property downturn, squeezing profits amid rising raw material costs. Against this backdrop, the China Home Textile Association (CHTA) Fabric Branch held its annual meeting in Keqiao, Shaoxing—a signal that industrial cluster collaboration is becoming a key variable for navigating the cycle.
Industrial Foundation: Keqiao's Scale and Transformation Model
Keqiao, often called an "economic powerhouse carried on a piece of cloth," boasts one of the most complete textile supply chains in China and globally. Public data shows that in 2025, China Textile City's transaction volume exceeded 440 billion yuan, with nearly 8,000 curtain and fabric enterprises in the area generating an annual output of about 70 billion yuan and cross-border e-commerce transactions reaching 800–900 million USD. Behind these figures lies a closed loop covering raw materials, weaving, dyeing, finished products, sales, and export.
Keqiao's transformation path deserves attention. The local government leverages UFI-certified professional exhibitions to connect global resources, promotes intelligent and green upgrades, and expands overseas markets through the "Silk Road Keqiao·Fabrics to the World" program. This indicates that Keqiao is no longer content to be a "world fabric supermarket" but aims to become an innovation hub for the fabric industry. For buyers, Keqiao's supply chain responsiveness and product iteration capabilities are shifting from "cheap" to "fast and superior."
Industry Pain Points: Volume Growth, Price Decline, and Involution
At the meeting, industry leaders reviewed the achievements of the 14th Five-Year Plan, noting stable industrial scale, improved standards, and accelerated original design. However, the fabric industry is facing dual pressures from property downturn and rising raw material costs, with corporate profits under pressure and exports showing volume growth but price decline. This "increased production without increased profit" situation is essentially a combination of oversupply and weak demand.
More alarming is price involution and product homogenization. A brand consultant bluntly stated that the root cause is disconnection from real user scenarios and blind price-following. Such competition not only erodes profits but also weakens the industry's innovation drive. For factories, relying solely on scale expansion is no longer viable; they must find new value anchors.
Breakthrough Paths: AI, Green, and Original Design
Another key signal from the meeting is that AI digitalization is moving beyond concepts to practical applications. A Donghua University team showcased AI-based intelligent color matching using a dye database to solve digital printing color differences, and CNN-based fiber polarized image libraries for non-destructive rapid fabric composition identification, replacing traditional chemical tests. These technologies mean sampling cycles and testing costs will drop significantly, especially benefiting SMEs.
Spatial AI applications are equally noteworthy. Companies proposed using world models for spatial analysis, material replacement, and one-click realistic scene generation, drastically reducing sampling and scene expression costs. Contract soft furnishing is seen as a priority track due to its high standardization, where AI solutions can boost bidding competitiveness. For foreign trade enterprises, accumulating fabric physical data is becoming a core asset—those who first adopt spatial intelligence may reshape the competitive landscape.
Green manufacturing and original design are another breakout path. The association proposed establishing a full-chain carbon footprint standard and setting up healthy sleep laboratories, aligning with the national 15th Five-Year Plan and proactively addressing international green trade barriers. In original design, focusing on 300 million people with sleep disorders, split-bed sleeping, and home office needs, combining temperature control and antibacterial functions with healing colors, and building a product matrix of image, profit, and traffic models will help companies shift from single-product sales to whole-home soft furnishing lifestyle output.
New Overseas Opportunities: Traffic Dividends and Localized Operations
Cross-border e-commerce is becoming a second growth curve for home textiles. TikTok covers over 150 countries with 2 billion monthly active users, and home furnishing categories in Southeast Asia and Latin America are growing fastest globally. Experts shared tactics like immersive short videos, local influencer collaborations, and Keqiao industrial belt live-streaming, recommending a three-tier product matrix of basic, functional, and co-branded items. For factory sellers, this means shifting from OEM thinking to brand thinking, using content traffic to feed product design.
Notably, going overseas is not just a channel shift; it requires localized operations. Aesthetic preferences, size standards, and price sensitivity vary greatly across markets, and blind distribution can lead to inventory pile-ups. Keqiao's industrial belt advantage lies in its ability to quickly respond to small-batch, multi-variety orders, which fits the fragmented order characteristics of cross-border e-commerce.