New challenges for exporters

What challenges and opportunities will the continued growth of China's economy and exports bring to exporters? On the afternoon of March 27, the "2007: China's Export Challenges and Opportunities" forum co-hosted by CEConline and Global Sources was held in Beijing.

On the theme of the forum, Dr. Justin Yifu Lin, a famous economist and director of the China Economic Research Center of Peking University; Executive Officer Merle A. Hinrichs delivered speeches respectively.

Frey Wille, a famous jewelry brand from Europe, and Yosemite, a domestic real estate project, are the strategic partners of this forum.

New Challenges and Opportunities for Chinese Exporters

Speaker: Justin Yifu Lin, Director of Peking University China Economic Research Center, renowned economist There may be challenges from rising costs and challenges from rising exchange rates and interest rates.

For scholars who study economics, since 2003, there have been many phenomena that are not easy to understand in China's economy. Since 2003, China's economy has grown at an average annual rate of more than 10% for four consecutive years. Not only is the economy growing so fast, but the inflation rate is very low, and export growth and trade growth are very good.

China's high growth is driven by very high investment growth rates. With high investment growth and high consumption growth, very high inflation is inevitable in any country, but China's inflation is very low. Investment and consumption are both demands. With demand growing so fast, there should be a lot of imports and very little exports. But since 2003, not only have we not had a trade deficit, but our trade surplus has grown larger and larger. This is the opposite of any economic theorist's prediction. Why is this the case?

This is related to the excess domestic production capacity, which cannot be digested domestically, so of course there will be more exports and more surplus. In this economic situation, the government wants to stimulate consumption, so interest rates are not high. Under the circumstance that trade profits are very large, our foreign exchange reserves are the largest in the world, so the pressure of RMB appreciation is getting higher and higher.

These are the past, what will this year be like? In my personal opinion, the macro economy this year will still see high growth.

The first investment growth will be at least 20%. Overcapacity in some industries. We are a developing country, and there is a lot of room for industrial upgrading. There is still a lot of excess liquidity in the bank. In addition, this year is a political year and the 17th National Congress of the Communist Party of China will be held. At this time, everyone hopes to be happy. Rapid investment growth can drive rapid economic growth.

I believe the second consumption will also grow faster. There are two reasons: on the one hand, the income growth last year was relatively fast, the income growth in the cities was 10.4%, and the income growth in the rural areas was 7.4%; in addition, our government emphasized building a harmonious society since the beginning of this year. , The investment in new rural areas will increase a lot. Generally speaking, our investment and consumption will continue to grow relatively fast this year. As long as consumption and investment grow rapidly, I believe it will be no problem for the national economy to maintain a growth rate of around 10%.

But will there be low inflation this year? I think maybe the inflationary pressure will be a little higher. The premise of high investment and high consumption growth but low inflation in the past is that excess capacity is very strong. Now the situation of excess production capacity in many industries has passed. Under this situation, if investment and consumption grow faster, prices will rise faster.

So how does this situation affect our export enterprises?

First of all, the production capacity has been relatively balanced. Under this situation, if the demand increases production capacity, the start-up of enterprises will increase, and the number of workers employed by enterprises will increase. Therefore, I expect that wages will rise faster and increase this year. cost.

Second, when there is a lot of excess productivity, the government will hesitate to raise the lever of interest rates in order to stimulate consumption. Now that the overcapacity situation has gradually eased, when the government sees a very rapid increase in investment, it is likely that interest rates will continue to increase in order to prevent inflation.

The third point, I estimate that foreign exchange will continue to appreciate, but I estimate it may be 3%, 4%, not more than 5%. The exchange rate continues to rise, and of course there will be many new pressures and challenges for export companies.

The growth path of self-built brands

Speaker: Wang Liqun, general manager of Shenzhen Jiuli Electronics Co., Ltd.

Key points: get rid of low-price competition; focus on self-brand building and product innovation; establish effective internal management mechanism; carry out multimedia marketing plan.

After training in the retail and wholesale business of electronic connectors and selling terminal products such as wireless microphones and wireless earphones, we began to participate in the National Electronics Fair in 1997 and aimed at overseas markets.

How can a weak enterprise survive in the huge market storm? How to develop? We chose to create our own JWL brand. In 1999, we started to build our own corporate website. At the beginning of 2000, we cooperated with Global Sources to expand the market by combining e-commerce platforms and overseas exhibitions. Strengthen enterprise management.

For a small business like us doing international trade, if we rely on traditional methods to find customers, it will undoubtedly be like looking for a needle in a haystack. Cooperating with Global Sources is like finding a good location in a famous commercial distribution center, and you will not have to worry about not having good customers to come to you.

In order to be successful, an enterprise needs to pay attention to four factors: 1. Get rid of low-price competition; 2. Pay attention to the innovation of its own brand and products; 3. Establish an effective internal management mechanism; 4. Carry out a multimedia marketing plan.

Let's talk about my experience.

Get rid of low-price competition. At the same time, the large-scale improvement of China's manufacturing capacity will inevitably bring about fierce industry competition, and even ultra-low price fights. We've seen people sell a container of patch cords, and there are quite a few varieties that are at a loss, but combined with a slight profit. This is a very scary phenomenon. How can the quality be guaranteed? How is the service guaranteed? How does the business last? There is no shortcut to get rid of low-price competition. From the very beginning of starting a business, we believe that doing business is a long-term business, and there should be long-term plans and strategic arrangements.

Focus on the innovation and improvement of its own brand. We have a product portfolio innovation strategy. Since 2000, we have established a good relationship with many customers with this market strategy.

What is a portfolio innovation strategy? When we put new products into mold design, we will consider a variety of product combination schemes, so that one mold has multiple uses and makes full use of limited resources. We make different combinations and configurations of newly opened molds and parts made from some previously opened molds, and make products with the same function into different appearance processes, and soon form a whole series of products. Sometimes customers don't just buy one product, but buy a whole series, because buyers are also facing the consumption needs of different customers.

Combining traditional technology with new technology. We keep accumulating traditional wireless technologies and integrating them with the latest technologies emerging in the market. Over the years, we've grown accustomed to dealing with customers who demand tailor-made products, often quality buyers.

Establish an effective internal management mechanism. We know that a factory must have good business personnel to communicate well with customers, good engineering R&D personnel to provide technical solutions required by customers in a timely manner, good production management system to ensure delivery time, good quality control system to ensure product quality, and The various systems throughout the plant must operate efficiently between them. Recognizing these, we start from cultivating cadres, cultivating technical talents, establishing and improving various efficient management mechanisms, step by step, and gradually improve the ability to serve customers.

Develop a multimedia marketing program. There is a customer who has been working with us for three years, but so far they have not sent anyone to visit the factory. At an exhibition a few years ago, the boss of this big buyer said that he has been paying attention to us. As long as there are suitable new products, he will definitely order samples for evaluation. So how do you pay attention if customers don't come to our factory? Where to pay attention? I think there are no more than three places: website, magazine, exhibition. So we have to market from a variety of media channels.

Winning competitiveness with quality and design

Speaker: Chen Yonghe, President, Far East, Brooks East Company, USA

Key Points: Sellers should take a long-term perspective and establish cooperation with high-end buyers. The conditions of cooperation are: Unique design and high quality.

Brooks East has been established in the United States for more than 30 years, and its stores are located in all large shopping malls in the United States. Our customer base is 20% and 25% of the upstream income group in the United States.

I give you a future development direction, that is, quality plus design equals profit and competitiveness.

You have to look very, very far. There are Dollars Stores in the lower level of the United States, and there may be many sellers who rely on these stores to live. Next is Wal-Mart, then Target, Shopko, and further up there are Macy and Bloomingdale. When all manufacturers are working hard to sell products to lower-level stores, don't forget that this is just a process, and you should accumulate all the money you make and move towards the upper goal.

There are two secrets to breaking into the world stage and stabilizing your own business: the first is design, and the second is quality. Many manufacturers want to enter the order of Brooks East. The first thing we do is to test. We have more than 50 engineers in Shenzhen, and all products must be tested. All parts, switches, we have to test five thousand times. All motors must be powered on and run continuously at high speed for more than 250 hours. If you pass it means profit stability, why? Because not everyone can do it.

The first thing I did when I took over as the president of Far East, the president told me, "Price is not a problem, it's mainly whether your product is good enough". If you buy a premium leather bag for $1,200, you're definitely not going to be red-faced with him, hoping he'll give you twenty or thirty dollars cheaper. When your quality and your design are good enough, no one is willing to bargain with you.

Many people say, Mr. Chen, can you briefly introduce how we can be an excellent manufacturer and how we can improve. There are four requirements: whether the quality control system is perfect, how is the production capacity, how is the ability to develop products, and how is the factory equipment. You have to establish these basic steps, without which you will never be a qualified vendor for buyers above the upper mid-range.

For example, when making disposable chopsticks, you need to ask yourself what kind of chopsticks are in the middle class and what kind of chopsticks are in the high-end market. This is the improvement of quality, and go up. If you still hold on to the disposable chopsticks, one day your market will disappear when there is not enough bamboo and wood in China, and it will be too late to go up.

Advancing Chinese suppliers to improve their value proposition

Speaker: Henry H.H., Chairman and CEO of Global Sources

Key Points: Global Sources, through an integrated ” magazine and education and training courses to help Chinese export companies learn the best management experience and give them the support they need to help them move up the value chain.

2007 was a year full of challenges for Chinese suppliers, the most important of which included the appreciation of the RMB, rising labor costs, rising raw material prices, and fierce price competition. But China is not the first country to encounter these challenges, which will happen when the economy reaches a certain stage.

In the 1960s and 1970s, Japan was the lowest cost manufacturing country in the world. In the 1980s and 1990s, Hong Kong, Singapore and South Korea, known as the tigers of Southeast Asia, all played the same role. However, their manufacturers are quick to realize that low-cost manufacturing is a temporary strategy that will only lead to short-term success. They understand that if they want to achieve long-term success, they must focus on product quality and innovation, promote investment in R&D and design, and also focus on sales strategies and value-added services, thereby moving up the value chain.

However, based on the experience Global Sources has gained in working with Asian exporters over the past 36 years, you cannot rely on any one of these areas alone to succeed. They must be fully developed as a whole.

We've seen some exporters fail. They try to sell innovative products to low-end buyers, but they don't like them; they try to sell to high-end buyers, but at the same time produce low-end products that don't meet their needs; and some Exporters produce high-quality and innovative products and sell well, but also fail because their management lacks rules and professional guidance to maintain relationships with high-end buyers.

Innovative products, management rules and marketing must be closely integrated to help suppliers out of the dead end of deadly price wars. These three elements are like the three sides of a triangle. Without any of these, the triangle would fall apart.

Over the past 25 years, Global Sources has helped Chinese exporters build their triangles and ensure their future success in world markets. The benchmark for our solutions is an integrated multi-channel media marketplace that includes innovative design, consulting services to help Chinese exporters deliver the right message and attract the right quality buyers.

But the right marketing to the right buyers is only the first step. The second step is to establish governance rules that translate the relationship with buyers into product ideas. 15 years ago, we started publishing CEConlines to help exporters in mainland China learn the best management practices and find the tools they need to maintain and develop the buyer relationships found in our buyer community. In the mid-1990s, Global Sources began offering its first training courses in China for managers on how to work with international buyers. These courses translate the management theory expounded by The CEConline into projects that can be brought back to the factory for implementation.

As a strong believer in integrated multi-channel media marketing, Chinese exporters can promote their products and company image in different ways in today's market.

The Internet can help buyers find your products quickly. It makes it quicker and easier for buyers to compare your product with similar products from other suppliers. It can promote low-cost, fast and timely communication in the market, but it does not play a big role in establishing the company's overall brand image or values.

Print media can provide a visual space to help you promote your corporate image and services to buyers, and you can emphasize the same message month after month on the view to ensure that buyers are impressed.

During our exhibitions and other face-to-face meetings, such as buyer-only purchasing meetings, you can build strong trust with buyers. You can introduce your products and business directly to buyers, as well as have a more personal touch. Buyers can see and touch your products so they can place orders on the spot.

The most important thing is that your company promotional message is consistent across every channel you use. Whether on the Internet, in magazines or at exhibitions, the same message of value must be delivered. Your employees must deliver the same message when they encounter customers.

This is the goal of Global Sources. Our innovative services can help you coordinate your promotions in our print media, online and trade shows so you can reach and attract the world's top buyers. Together with the CEConline and educational training courses, no matter what challenges Chinese exporters face, we will give them the support they need to move up the value chain.

China's suppliers will find outlets in today's price war and cost pressures. China's future will not only be the best low-cost manufacturing center, but tomorrow's global product innovation center. To this end, Global Sources, as always, strives to make positive contributions to the success of China's export business.

The author is an associate editor of CEConline Magazine.