Buyer purchasing new trend, are you ready?

The international trade environment is not what it used to be. "Made in China" urgently needs to be transformed. How can foreign trade companies create their own development strategies? Global Sources, together with its "CEConline", continues to create a series of "Outsmart the Future" export forums, providing an excellent exchange and learning platform for foreign trade enterprises. The following is the keynote speech of Mr. Mark Hayden, CEO Consultant of Linmark Group (Hong Kong), who gave us an in-depth analysis of buyers' purchasing trends in the future:

Mark Hayden: Now our customers are asking for it It is more demanding, and there are often more designs to choose from for the products we want from their suppliers, and there are higher quality choices of materials and processes. We need to be a smaller minimum order quantity, and they hope they have the conditions to check the working conditions of the factory from time to time. And we have to check the supplier's salary payment records, and shorten the time from order to delivery. In a word, after all the above conditions are met, I hope the price is lower than last year. If the supplier can't meet these requirements, they often say Transfer orders to some markets in India, Bangladesh, Indonesia, etc.

So the buyer's market and the sales market that we buy now have undergone very big changes. In the past, we have seen that buyers are very easy to please, they just want a good product, good price, good quality, And the delivery is on time and on time. Now there are more changes and demands, so what kind of changes are there?

The first is that the supply exceeds the demand, that is, the number of major importing countries has not changed significantly, but the number of major exporting countries has increased significantly;

The second is the emergence of emerging technologies, This enables the current buyers and suppliers to get closer to each other and obtain more information from each other. That is to say, buyers can obtain information on many suppliers, including suppliers in some remote areas such as India, Bangladesh or Indonesia, which can be easily obtained. In terms of a change in the apparel industry, we saw that in the 2005-2008 period, the quota system for apparel products was cancelled, which once again intensified competition among our suppliers.

The third change is that competition in the European and American markets has prompted the emergence of a new form of retail, which is what we call discount stores for out-of-season products, which require suppliers to supply prices for products Lower, but the quality is to ensure a certain quality, these products are with the reputation of brand products on it, so the value of the brand must be maintained. This will also cause suppliers to feel more pressure in terms of price;

The fourth new source of change is the change from the clothing industry. You can see that there is a fast fashion trend now, and some brands are from Spain. zara also has the Swedish brand H&M, updating their designs and products every few months. But in the past, these traditional clothing industries tended to update their products only twice a year, such as spring and summer clothing or autumn and winter clothing, which also contributed to the rapid changes in the market.

The last big change is actually what we call the change in e-commerce, which has basically completely changed our retail industry. Because in the past, there may still be a lot of retailers trying to understand how to conduct e-commerce, because we saw that in the past, retailers may have physical stores and online websites, and the use of websites is to boost their physical stores. promotion of. But now the situation is often the other way around, and the retailer is now using its brick-and-mortar stores to boost its online sales. Because there are such brick-and-mortar stores, customers go in to see the products and prices of the brick-and-mortar store, and they go home and place an order online. There is a risk from this point of view that if your brick-and-mortar store is in a very busy or high-rent commercial area, your sales will not be able to pay your rent at all.

So we see that the biggest retailer in the future may no longer be Walmart, but an e-commerce like Amazon, eBay or Taobao. I just talked about the impact and impact of these changing trends on our business:

First of all, the market has changed from a seller's market to a buyer's market, and the buyer has a greater right to decide in the transaction process. So the sellers do everything possible to retain buyers to increase the added value of their products, provide some better packaging and boxing services, and even carry out partial shipments and so on. And in order to shorten the time of his inventory as much as possible, the buyer will only purchase the goods when they are ready for sale or at the time of sale.

There is also a trend that some buyers will reduce their own design costs and push the design work to the supplier side to complete. Chinese suppliers have done a good job in this regard, they are quickly aware of these changes, and respond in a timely manner. For example, their products are of better quality, lower prices, and then have newer designs. Therefore, the business of Chinese suppliers is getting bigger and bigger, but in the process of expanding, he is accompanied by a kind of worry, that is, on the buyer side. Because they think that they don't want to rely too much on the only big Chinese market, and don't want to put all their eggs in one basket. Therefore, while their business in China is expanding, there is such a trend that international buyers are now consciously distracting their buying behavior. Is willing to buy from other markets.

Today's buyers, who used to be a deep-dive-like behavior, are now buying faster and making faster purchasing decisions. Maybe it used to be a purchase, two or three times a year, but now it is a number of times every month or a few months. So this is also putting a lot of pressure on our suppliers, who need to have such a large number of employees and have a very diverse production line and be able to make timely adjustments to the requirements of the buyer. China has done well in this regard.

Current buyers don't want to focus all of their attention on the Chinese market or Chinese suppliers, so they want to enrich themselves and have a market with more suppliers. So they are now adopting a strategy that we call "China + 1", so the focus is on India, but India is not doing well compared to China. The efficiency of one productivity is not high, the second equipment is relatively old, and the third is that its production line cannot be established in time.

After India, Bangladesh is considered. Bangladesh has a large population and low labor costs, making it more suitable for the production of labor-intensive products. But it soon became clear that Bangladesh was not an ideal place, because it was politically unstable, and then there were many natural disasters, plus strikes and so on.

But these people just want to say that they can't go back to China, they still have to go to a third place, and now they see that it is Southeast Asia, including Indonesia and Vietnam. These places are now hot markets. Their advantage is that the workers are very hardworking, and then there are many Asian companies to invest in these places. In addition, Vietnam is currently in the process of negotiating a trade agreement, which is the TPP Trans-Pacific Strategic Partnership Framework Agreement that everyone has heard of. Then he includes countries such as Vietnam and Malaysia, but does not include Chinese works. So we see that this is also an emergence of a change.

So what I said just now is that our cost is not the most important thing. Because everyone sees the cost of labor, if you set up a factory in Africa, the labor cost in Ethiopia in Africa is only $23. The most important thing is your product quality and productivity. This is your core competitiveness. China has done a great job in this regard and maintained this advantage. But China should continue to make persistent efforts, such as making some investments, investing in your product lines and equipment. And constantly guaranteeing your quality, there are no conditions to talk about in this aspect, and the way to compete can be relied on, such as constantly mentioning productivity, as well as on-the-job training for employees, as well as continuous adoption of new technologies and so on.

It is also very, very important that not all buyers are suitable for your products, so customers such as mail order or e-commerce are not suitable for your sales channel. Maybe you are a big factory and you need big orders to keep your business going. So one way is that you have to find a way to get more information to see what the buyer is like in a situation of a company. Then he has a vision for his future development and what is his business plan. Then finding the right buyer for your company's development is the most correct way, and working together, you can achieve success.

For example, you can see if your buyer has an agency or department in the local area, and then you can get in touch with him. Another very important way is to use companies like our Global Sources and some of their media platforms to get in touch and find some buyers that best match your business.

I think one thing I would stress is the importance of integrity, because in a buyer's market like this, the role of integrity cannot be underestimated. If you go to the exhibition, you must be honest about the strengths and weaknesses of your products. Also, the products that must be exhibited at the exhibition are products produced by your company. Never make promises that you cannot fulfill. For example, don't set your price unrealistically low, and promise to deliver in a very short time, these can't be done, it's better not to say.

In today's buyer's market, when buyers seek suppliers, they want to find such suppliers. They can give us peace of mind and reassure us. We like such suppliers very much. For example, suppliers are very law-abiding companies that follow Chinese laws. In the future, they will talk about environmental protection, etc., and social responsibility issues such as treating employees well. Such suppliers are the partners we most want to cooperate with, and integrity is the most important.