How should Chinese manufacturing become popular?

2013, the prospect of export trade is not clear: "Made in China" low price advantage is gradually lost, how will Chinese suppliers seek survival and development? How to develop an effective promotion strategy? How to make an order profitable? Where will China's export enterprises develop in the future?

At the "Wisdom Wins the Future Export Series Forum" co-hosted by Global Sources and CEConline, Mr. Pei Kewei, President of Corporate Affairs of Global Sources and Publisher of CEConline, analyzed export companies' breakthrough strategies, and discussed with him Export enterprises are looking for "the development direction of Chinese enterprises in the post-manufacturing era".

The following is the main content of the speech.

First of all, I would like to share with you a strange finding. A 2013 survey on export performance showed that 51% of the exporting companies surveyed believed that their export performance would definitely increase in 2013. While the other 36% remained flat, the overall is still relatively optimistic. So why do we find it strange?

Mainly for the following three reasons:

First of all, the entire domestic cost system has undergone great changes in recent years. Due to the appreciation of the RMB, rising raw material prices, labor contract laws and other reasons, the former low-price advantage no longer exists.

Secondly, the entire international market environment is also taking place. Changes, some market factors are causing trouble, such as the economic crisis in the European Union or the so-called fiscal cliff in the United States, the possibility of the relocation of European and American manufacturing industries, etc.

Thirdly, there have been many complete changes in the behavior of buyers recently, such as the original Bulk purchases have become smaller and smaller orders today, and the intermediate links have also undergone great changes. The product cycle is getting shorter and shorter, and there is also more intense competition in the retail sector. There are also factors such as capital turnover pressure. , forcing buyers to change a lot of their processes.

Based on the above background, what should export companies do?

First I want to share an updated survey. As for how export enterprises view the status of export, 66% of the interviewed enterprises are those who specifically participate in export business decision-making, 60% of them are small and medium-sized enterprises with an annual export volume of less than 10 million US dollars, and 62% of the respondents have at least one export business experience. Have five years of experience. How do these people view the problem? It is worth our reference.

Finding 1: Buyers are more proactive

Our first question is: Has the attitude of overseas buyers changed in the last five years? Are they more active or passive? The survey results tell us that 44% of businesses surveyed believe that buyer feedback is more positive than in previous years. what reason? I feel that there are two factions of Chinese export enterprises, one is still at the price advantage. Although the environment is changing, the idea of this kind of business is that the products I make must be cheaper than others, which is the value of my existence. This group of companies has been very successful in the past, and their performance has been on the rise for three decades. But it may have fluctuated slightly in recent years. What is the second faction like? They have shifted from focusing on selling price to focusing on selling value, which is something other than product price. The outlook for this group of companies is more optimistic.

Finding 2: New customer acquisition is the best strategy

Suppliers are also more active than before, the survey results show. We found that 58% of the companies surveyed said that this year they plan to increase their marketing efforts, increase their budgets, and their main promotion is to develop new customers. This question is actually a discussion of promotion strategies. The first strategy is to develop new customers; the second strategy is to maintain existing customers and cultivate existing customers; the third strategy is to build a brand. Most of the respondents believe that developing new customers is the best strategy.

Finding 3: Test the waters of e-commerce - spend small money, get small profit

Then the buyer who is it? The problem is more complex than it was five years ago. There are several types of suppliers, including manufacturers, traders, exporters and brands. What kind of customers do they sell to, what kind of buyers? It used to be sold directly to the retailer or to the middleman, the wholesaler, and sometimes to the manufacturer. There is also an emerging channel, which is the kind of cross-border sales to local e-commerce, the so-called B2B, B2C, skipping the traditional channels. This emerging channel has brought some changes to the whole system, and our choices have become more and more complex. Every enterprise should choose which channel to use. The choice of every enterprise may be different. It depends on the product and its own positioning.

B2B, B2C direct sales, what is the advantage of selling to consumers through the Internet? more directly. Where is the bad? A lot of issues are involved. For example, I need to be able to accept small batch orders, and I need to find a way to protect my brand. Because on the Internet, the brand is not very good to express. Because the Internet is mainly based on price to sell. There are also issues of assimilation, as well as sales services, inventory risks, pricing strategies, and different needs in different regions overseas. So if you're going to sell directly, you have to take these things into consideration.

Another problem is channel conflict. Because of so many channels, if I sell a product and sell it directly to the consumer, he uses the price to buy it. Trouble if his price is cheaper than what I'm selling to the retailer. There will be a serious conflict, so when you choose the channel of the product, you must consider how you can manage the conflict between such channels. As Global Sources, anyway, we know that there are a lot of options, a lot of channels. And our task is that when you choose your channel, we should help you to promote it, to express what channels you have, the advantages of your different channels, and the advantages of your own business.

In our survey, we found that 58% of the businesses surveyed have started using so-called e-commerce platforms for small transactions. In fact, what kind of enterprise will try these, maybe because the price competition is very fierce, it will think of different emerging channels. However, the benefits obtained by these companies are not so great. Of that group of 46% who participated in direct online sales, 46% of suppliers invested less than 25% of their promotional budget as direct online sales.

E-commerce is a future trend, but only a very small part of sales and transactions are currently through the Internet For example, in China, the online transaction volume only accounts for 4.2% of the retail industry. In the United States, it is similar, accounting for 4.6%, and its growth rate is quite fast. But only a small part of the overall retail industry.

Channels are becoming more and more complex, bringing many new opportunities and new challenges. Faced with today's environment, what should export companies do? There are some general principles for your reference.

Step 1: Decide where you are.

Who do you want to be? Is your positioning on price, i.e. producing a product that is cheaper than any competitor. Or you may be positioned to win by value, producing products that may often outperform other competitors in terms of design.

Nowadays, many buyers repeatedly tell us that China cannot produce the cheapest products in the world. So the next question is what should buyers think about Chinese products, and more importantly, what should they think about your products. What are your advantages? Maybe when buyers came across Chinese products in the past, his reaction was that they were cheap. The question we need to consider today is that when buyers encounter Chinese products, what is the response we want them to produce? Maybe the response we want it to generate should be that this product is good, very good, and the price is okay. So to put it simply, we were selling price, now we're going to move to saying we're selling value. Let the buyer feel that it is cost-effective and worth buying. Although it is not the cheapest in the world, I want to buy it.

Step 2: Identify your target buyers

You need to know what kind of market ideas your target buyers have, where in the world they are in, and then define their competitive advantages. Find a selling point to attract the ideal buyer you want.

Next, you need to consider what kind of promotion channels you use. All promotion channels are to surround your target buyers, so that they can keep hearing your voice. So it's a big frame.

We have to admit that business is getting more and more complicated, and business is getting harder and harder to do. Nevertheless, it must be understood that many buyers today are not your target, and even if you have to reject many orders from buyers, you have to say NO, I cannot accept it. The world is complicated, and you can choose what buyers you want, but there is a precondition that you should have a list in your pocket. You should take the initiative to find the buyer you want. Otherwise, how can you say NO to the buyer. So we must emphasize the importance of promotion.

In the past, promotion was not a problem that a boss spent a lot of time thinking about. Because at that time your value advantage will attract buyers to come, and buyers must come. But today when you don't have that advantage, buyers have options. You have to spend a lot of time explaining why this buyer came to you. The reasons can be design, experience, service, or anything other than product price.

Step 3: Identify your target market

This graph reflects the answers of our interviewed companies. We found that the vast majority of companies still put Europe first, and the United States second. Emerging markets should go further down. I believe that every company has different products. So each company's answer to the target market is definitely different. In my judgment, emerging markets must be cultivated, and new countries must be developed. But to find my own balance, I refer to the overall Chinese export data. I found that China's share of exports to emerging markets is only around 16%. Although the export growth of this emerging market may be 40%, 50%. But it cannot immediately replace the overall traditional European and American markets.

Step 4: Identify Your Competitive Advantage

That is to find the unique selling point. I don't think this problem can be spent too much time because it is too complicated. And everyone's answer is different. But if we cooperate with me, the first step is to find the competitive advantage and unique selling point of our company. Let your creativity express such a selling point.

Step 5: Find the most suitable promotion channel

Here are a few pictures to share the findings of our survey, which are very interesting. The first question we asked was if you wanted to get leads, what channel would you use? Which channel is the best? Because every channel has its advantages and disadvantages. We found that if you want to get sales leads, the first is the exhibition, the next is through channels such as email, and the third is the online trade platform. Here is a result. If you want to get orders, different channels may have different roles. We found that the first place in the list is the exhibition, which can also be understood. Because we sometimes negotiate business at the exhibition, but there is a very interesting fact that many people are also considering their own brands and want to build their own brands. However, we found that 51% of the surveyed companies believe that exhibitions are the best way to build their brands, and the key and important customers are also the exhibitions.

We found that although exhibitions are ranked first, almost all of the interviewed companies do a lot of other promotions besides exhibitions. It is a matter of priority, you must expose yourself first. There may be various channels, but the exhibition may be more direct and able to talk about the results, so the exhibition is more important. Anyway, everyone has to find that there are many ways to promote themselves. And if you think about your buyers, and your market. You just have to adjust your own promotion methods, which is also the core business of Global Sources. Help you to choose what kind of plan, let you promote or express your unique selling point.

Returning to our survey, it is true that many interviewed companies already know that they must build their own business development through multi-channel integrated promotion. But some are still concentrating on attending more exhibitions or increasing their budget or maintaining their existing clients. But most of them think that today is an era of integrated promotion and 49% think so. They need to use multiple channels and means to promote.

It is much harder for you to differentiate yourself today than it used to be, but it is much more important for you to differentiate yourself today. If you don't have a price advantage, you have to find something else to attract the other party. The things other than the price are the image and the brand. So building your own image and establishing buyer preference for you is much harder than it used to be. But it's much more important than it used to be, and if you don't fix it, you may have no way out.

Simply make a brief summary. Today, as an export company, you must think clearly about what method you want to use, what kind of buyers you are targeting, and what channels to use to sell and what channels to use to promote . In today's complex market, many different media can be used for promotion anyway. Take advantage of them and make their pitch around true positioning and competitive advantage.

No matter how much the world has changed, some principles remain the same. For a business, you have to find your buyers, you have to expose yourself, you have to get the buyer to start paying attention to you, and then have some communication with him to make him have a preference for you. I think these principles will not change, but there are still many new challenges and opportunities.