Don't want to fight the price, but too conservative?

From July 10th to 30th, "CEConline" held the first "Investment Willingness Survey of Chinese Manufacturers". A total of more than 200 manufacturing elites participated in the survey, most of whom are corporate executives such as chairman, president or general manager. The survey results show that the latest investment strategies of Chinese manufacturers are biased towards innovation and branding, which is different from our traditional impression that China's manufacturing industry is mainly based on OEM and ODM. Strive to transform yourself into an "innovative enterprise". What enlightenment can this new trend bring to China's manufacturing industry in transition?

More than half of companies invest more in innovation and branding

What is the year-on-year increase or decrease in the manufacturer's planned investment in the coming year? 52% of the surveyed companies indicated that they would increase year-on-year. This ratio, Professor Lin Jiang, director of the Department of Finance and Taxation of Lingnan College of Sun Yat-sen University, believes that it is an ideal result, but it is also very difficult, because the economic growth rate has slowed down and exports have been weak in the past two years, and the manufacturing industry has also ushered in a period of low-speed growth. It takes a lot of courage and confidence to increase investment. However, we also saw that nearly 30% (29%) of the surveyed companies indicated that they would decrease year-on-year. It can be seen that Professor Lin Jiang's concerns are not unreasonable. Many manufacturers are still affected by the "cold current" of the overall environment.

So, what kind of companies would choose to increase investment? We found Guangzhou Test Enterprise Development Co., Ltd., which is mainly engaged in the R&D and production of smartphone peripheral accessories. According to its CEO Chen Honghong, due to the steady increase in the demand for orders from major American customers such as Wal-Mart and Target, the company's orders The plan is already scheduled for April next year, so companies will increase investment in production and other aspects.

When asked why companies can rise against the trend when the international demand environment is not good, Chen Honghong believes that the main reason is to keep up with the changes in market demand, through product, design and business The innovation of the model has maintained the continuous growth of orders. "For example, we have 96 types of mobile phone accessories, which are very complete, and the packaging design takes into account the different needs of different age groups; at the same time, we have registered the brand in the United States, and we can get comparisons when talking with big chain stores such as Walmart. Good display position, and can advertise in the store to attract consumers. Consumers are also willing to buy our products, which forms a virtuous circle. When chain stores see that our products can bring them popularity, they are more willing to cooperate with them. We cooperate." Chen Honghong said. During the survey, we asked the interviewed companies which links in the value chain are the key investment areas of the company in the future. The first and third places are "renovating production processes, improving efficiency and quality, and reducing costs" and "expanding or optimizing sales channels".

Professor Lin Jiang believes that the latter two are aspects that traditional manufacturing enterprises must do, while the former two indicate that enterprises are not comfortable with the status quo and have a strong desire to move towards the two ends of the smile curve. Global Sources CIO Peter Zapf also believes that R&D and design oriented to meet market demand is very necessary, "because with the rise of manufacturing costs in China, the competition model of price competition needs to be changed urgently. Product innovation, quality improvement, market insight, etc. to build advantages."

Lou Peichun, chairman of Zhejiang Haoyuan Electronic Technology Co., Ltd., is striving to rely on this road. As an enterprise that develops and produces audio and PA equipment, Lou Peichun is no longer satisfied with simply taking OEM orders. He has created his own brand and vigorously promoted it in Southeast Asia, the Middle East and other markets. At the same time, he is also constantly trying to use the Internet , Bluetooth and other new technologies to transform the traditional product of PA equipment, in order to achieve differentiation, "Now the homogeneity of Chinese-made products is too serious, so we hope to add new elements through research and development and design innovation to achieve differentiation. , to make the product more recognizable.”

More than 60% of the companies have conservative funding channels

In addition to the company’s own development strategy, the factors that determine the company’s investment willingness and direction What else? The most mentioned by respondents are "business operation and profitability", "industry development prosperity" and "macroeconomic prosperity". Professor Lin Jiang thinks this answer is not unexpected, but in his opinion, the importance of "the degree of macroeconomic prosperity" should be paid more attention, because manufacturing, in particular, is an industry that is deeply affected by international and domestic macroeconomics, such as The rise or fall of the value of the renminbi by a few percentage points may be related to the life and death of some low-profit manufacturing companies. In addition, Professor Lin Jiang pointed out that "entrepreneurial spirit" plays a decisive role in the willingness and direction of enterprise investment. "Whether an entrepreneur is willing to take risks and whether he is willing to explore new possibilities is actually the key to enterprise investment."

So, what is the risk appetite of the interviewed entrepreneurs? Is their style of running the business aggressive or conservative? We see that in the answer to the question "the most important source of investment funds", 64% chose the accumulation of corporate profits, the banking channel accounted for 26%, and the proportion of other channels was relatively low. Regarding this result, Professor Lin Jiang believes that the interviewed companies can actually be more aggressive, because this is an era where capital is paramount, and "spending other people's money to develop your own business" will gradually become the norm. It is very normal for companies to develop through borrowing and introducing investment, and this will also become a development trend in China." Lin Jiang said.

Nearly 20% of enterprises will invest overseas in the next year

Export-oriented enterprises in China's manufacturing industry account for half of the country. At present, the export growth rate is slowing down and international demand is weak. These enterprises Has growth been achieved through various forms of overseas investment? In the survey, 18% of the companies surveyed indicated that they have plans to invest overseas in the next year. The absolute number is not high, but considering the high threshold for overseas investment, companies with this proportion can take this step. Not easy. Among the preferred forms of overseas investment, 67% of the surveyed companies chose to "set up sales representative offices overseas", and Peter Zapf very much appreciates this way of going out, "This is an ideal step for Chinese manufacturers to venture overseas. Because manufacturers The most important thing is to have a deep insight into the market demand to improve product development and manufacturing. An overseas office can effectively play the role of an 'information collection outpost'." Peter pointed out.

In this survey and interview, we can clearly feel the strong desire of Chinese manufacturers to embrace innovation and branding, and also find their clear strategies for developing overseas markets. But at the same time, Chinese manufacturers are still conservative in terms of capital operation, and the concept of developing enterprises with the power of capital has not been deeply rooted in the hearts of the people. For more research results, see the chart in this article.