Yiwu small commodities as one of the business cards made in China is known worldwide, has been the bridgehead of China’s cross-border trade.
Yiwu City Customs data show that in 2019, Yiwu City’s foreign trade import and export value reached 296.78 billion yuan. Take Christmas supplies as an example, the world’s Christmas supplies market, Yiwu occupies 80% of the share. Yiwu supplies two-thirds of the world’s Christmas decorations.
Even so, at the beginning of 2020, the epidemic black swan made Yiwu’s foreign trade merchants suffered a crisis, order cancellation, backlog of goods, port shutdown …… reality is full of desperation, but this desperate situation did not make Yiwu’s foreign trade merchants desperate.
A long-term study of Yiwu scholars told the Deep Web: “We generally believe that the manufacturing industry has been a big impact, but Yiwu businessmen have been looking for a way out, they are very good at finding opportunities in the crisis, they respond quickly to the market.”
The deepest perception of the current challenge is the front-line participants, “Deep Web” dialogue with some typical foreign trade businessmen in Yiwu, recording their stories of survival in the crisis in 2020 to break through.
Yiwu ancient name Chouzhou, surrounded by mountains on three sides, small traders go from street to street hand-cranked rattle “chicken feathers for candy”, after four decades of the big wave, the entrepreneurs who have grown and grown here, can survive are hardened in the competition, where competition is like the air, everywhere.
In the view of foreign trade businessmen, their channel change to explore the road has long since begun: join the WTO, do foreign trade; after the financial crisis, to domestic sales; and then the rise of e-commerce; to later live with the rise of …… reality tells them: the business world over the years the only constant is change – the survival of the fittest under the business changes.
Tormented April
Throughout April, Zhang Xiao (a pseudonym) is in a deep anxiety, she is the chairman of an ornament company in Yiwu City, the sudden epidemic like a black swan swept the world, domestic sales did not recover, foreign sales and stagnation.
Zhang Xiao’s company resumed work in early March this year, belonging to the second batch of enterprises in Yiwu to resume work, with more than 300 employees, mostly from Anhui, Henan, Yunnan and other provinces. A week after the resumption of work, the staff reached 70%, 80% of the return rate.
Zhang Xiao told Deep Web that the production orders for the first quarter were all orders received at the end of 2019. In the past, March, April and May of each year, is the busiest time for Zhang Xiao, which is the biggest purchasing season of the jewelry industry in the coming year, to prepare for the second half of the year or next year’s Spring Festival.
In previous years, these months, many large customers in the jewelry industry at least half will come to Yiwu, but this year these customers can not come. mid-March, Yiwu City Government invited some very resident international buyers, especially those holding trade visas to Yiwu procurement, but most of these customers are Middle East. Zhang Xiao’s business is to do the middle and high-end jewelry, past customers are Europe and the United States.
Zhang Xiao also has some domestic customers, doing terminal chain stores in China. In these two months after the Spring Festival, their goods were not sold at all, and the relationship between their cash flow and Zhang Xiao’s was a cold one. Some customers had no choice but to talk to Zhang Xiao to cancel the order, in her opinion, did not do the list can be canceled, after all, we are not easy.
Late April Zhang Xiao faced the status quo – orders plummeted, no orders in May. She had to consider streamlining the staff, “let the staff back, they are sure to come back, but now there is no work to do. Let them go, it is quite reluctant, do not go, it is very tormented.”
Zhang Xiao is an Anhui native. A look like 80 after 70, is a literary female boss, in her spare time she likes to look at the blue sky and white clouds and evening sunset, business suffering she rarely to confide in, for her, as long as the return to nature seems to all dissolve.
Zhang Xiao came to Yiwu gold in 2000, the year Yiwu China Commodity City commodity turnover has been ranked among the top ten markets in the country for 10 consecutive years. And the sixth Commodity Fair held that year attracted 25 countries and regions of the world, 33 provinces and municipalities, with a turnover of nearly 3.9 billion yuan.
Zhang Xiao’s impression, then Yiwu than today’s prosperity, but the feverish busyness is consistent. After dark, you can not find a cab on the street, are tricycles running, the second year of Zhang Xiao’s business, China’s accession to the World Trade Organization (WTO) in 2001, internationalization has become a major trend.
Since 2002, Yiwu’s “sock king”, Langsha, has been cooperating with Wal-Mart, and their socks have entered the global sales system of Wal-Mart. Weng Rongjin, the founder of Langsha, was one of the “chicken feathers for candy merchants” in Yiwu 20 years ago.
Like most enterprises in Yiwu, Longsha mainly does foreign trade by OEM, and Zhang Xiao also got on the train.
In 2019 the company’s company sales did 80 million, foreign sales and domestic sales accounted for 50% each. The world’s average of every 10 pieces of jewelry, there are 7 pieces of production from Yiwu. Zhang Xiao’s company’s first quarter order delivery, but the delivery date is still delayed, because of logistics.
Delays in Yiwu’s foreign trade merchants is not the case. (hereinafter referred to as Baojie), the founder of the company’s main business is women’s products, in his words, in addition to clothing is not done, girls from head to toe products are done.
The main markets of Baojie’s products are Europe and South Africa, with 11 brands and 15,000 stores, and more than 200 cooperating factories in Yiwu, with the mode of ODM and OEM, mainly ODM. Wang Benjian calls himself an integrator of fashion accessories.
Wang Benjian told “Deep Web”, they do brand stores, basically in will be placed a year in advance of the order, before New Year’s Day guests placed orders for goods, basically the end of 2020 to early 2021, but now face the situation is 80% to 90% of the goods delayed.
The delay of the goods has affected the orders. Ltd. (hereinafter referred to as “Ruopei”), which produces simulation trees, 90% of the products are exported and 10% of the products are sold domestically. Ruopei’s products are mainly exported to Germany, the United Kingdom, the United States and Saudi Arabia.
In July 2019, Qishui spent about 7 million to buy machinery and equipment and expand production capacity; the factory’s staff also increased by half, more than 120 people. 2019 sales of Ruopei were 35 million, and in 2020 Qishui set a goal to increase by 50% and reach 100 million in sales in three years.
The epidemic made Ruopei’s orders at the end of March and the beginning of April affected, and Qi Quanshui felt that the growth was hanging, but he still had the confidence that the sales were the same as last year, which was because he had been seeking changes and did not put the eggs in a basket.
Hold the sales channel in hand
Qi spring water is Shangluo, Shaanxi Province, after dropping out of junior high school, first in Xi’an City, Chang’an County, burned three years of boilers, and then spent five years in a furniture factory in Guangzhou, and later, he went to Xuzhou. Stumbled through ten years, and did not earn any money.
In 2006, relatives called Qi spring water to Yiwu, he was shocked, think this place is small and broken, the size of the plant is very small, with the private house; Qi spring water had seen in Guangzhou when the boss are sitting in a small car, but in Yiwu he saw the boss are sitting on a motorcycle.
Qi spring water to see these sitting on the motorcycle boss of the ordinary pragmatic, he did not see is that these sitting on the motorcycle of the small boss as early as a few years ago has been sold to the Yiwu small goods around the world.
In Christmas 2004, the American media Sarah found: 39 Christmas gifts, “made in China” of 25 pieces. At the same time, the family’s shoes, socks, toys, table lamps are all from China. In this situation, she could not help but think: If there is no Chinese products, can Americans still survive?
In December 2005, based on her own experience, Sarah published an article in the Christian Science Monitor, “The Year of Leaving ‘Made in China The Year of Leaving ‘Made in China'”, concluding that Americans simply cannot get rid of “Made in China”.
The hot scene of foreign trade in Yiwu City made Qi Spring Water have the idea of starting a business. After three months of working, he resigned. Qi spring water is responsible for the management, relatives out to run business. They borrowed 20,000 yuan, rented a three-room three-storey private house with a small yard, and then recruited more than 20 workers from their hometown of Shangluo, Shaanxi Province.
Qi spring water business in the first three years, very hard and tired, and did not earn any money. 2008, in the minds of many Yiwu foreign trade businessmen, is a very important watershed. A typical event is: the eve of the financial crisis, in July 2007 Longessa and Wal-Mart to stop cooperation. In the past, Langsha would provide Wal-Mart with 5 million dollars of socks every year.
The termination of cooperation between Langsha and Wal-Mart highlighted the Yiwu model – thin profit and more sales. Subsequently, the financial crisis swept the world, Yiwu’s foreign trade orders once fell off a cliff. Previously, they feel that doing business in Yiwu like picking up money, after that, they feel that doing business in Yiwu is a money grab.
Qi spring water in the start-up period, those years, lived very hard, very tired, but also very confused, he could not find the direction. Qi spring water for the first time to taste the sweetness, because the product innovation.
In 2009, the 60th anniversary of the National Day, Qi spring water company developed a product – light cube flower ball. That flower ball is 60 centimeters, which means the 60th anniversary of the founding of the country. That product was selected by the National Day 60 years party, that single done, Qi Quanzhou bought the first car in life, Geely DeLuxe.
Qi spring water business is gradually on the right track, the process, Qi spring water still found some problems, he produced the goods on behalf of others to sell, it is easy to be subject to. These bosses who hold the channel like to press the account period, but also like to wipe out the fractions of the borrowed items.
Let Qi spring water is impressed by one thing is that in the Spring Festival of 2011 he went to close the account, 15600 single, the boss said to him, “you next year to close it, before the end of the year, you can only give you 10000, 5600 will be erased.” Qi Quanshui was in a hurry to use the money, and agreed with all reluctance.
Since then, Qi Quanshui has a perception that business sales must be in their own hands, otherwise it is equivalent to being stuck in the neck, Qi Quanshui want to change this passive situation.
Unlike Qi Quanshui, Zhang Xiao has been the sales channels firmly in their own hands.
For Zhang Xiao, entrepreneurship over the years, the only constant is change. The first ten years of business, are customers from around the world to run to Yiwu to order. After the financial crisis, many foreign customers do not come, starting in 2009, perceived the pressure of competition Zhang Xiao, took the initiative to go to the United States Las Vegas and Hong Kong to exhibit.
At first, the frequency of her exhibitors is very high, a year to Hong Kong exhibitors five times. Zhang Xiao found that some foreign customers are also in transition, they have turned from professional jewelry stores into integrated stores where jewelry only accounts for a part, followed by the emergence of domestic consumer goods chain stores represented by the famous brand.
The style difference between foreign and domestic sales of jewelry is relatively large, and since 2015, Zhang Xiao has increased the research and development of domestic sales products. She did so because she saw the trend of declining exports and “sunny repair of the roof.”
The fact is also true: in 2014 and 2015, Yiwu City’s total export growth rate reached 29.2% and 44.3%, respectively, in 2016 and 2017 slowed to 4.7%, and in 2018 and 2019 slightly rebounded to 9.2% and 13.7%.
Not putting eggs in one basket
Despite the continued growth of foreign trade market, Zhang Xiao still decided to expand domestic sales, she believes that eggs can not be placed in one basket. After four years of development, Zhang Xiao’s company sales of foreign sales and domestic sales accounted for 50% each.
At present, Zhang Xiao also participated in fewer and fewer exhibitions, in March 2019, after participating in an exhibition, the exhibition was canceled later, an exhibition costing hundreds of thousands of dollars. Foreign economic downturn, the effect of the exhibition is getting worse, some customers will go directly to Yiwu to find cooperation, coupled with the rise of various cross-border e-commerce, part of the customer has not come to place orders.
Zhang Xiao perceived that competition is getting fierce, the past 20 years, she put more energy on product development, production and sales. Now she feels that something has to change, although Alibaba International Station is doing, Amazon is also doing, and there are self-branded Tmall stores have been doing for two or three years, but only a slight upturn.
At the end of 2019, Zhang Xiao thought about the layout of the live broadcast, and she also went to talk to many organizations to strengthen cooperation.
Compared to Zhang Xiao’s passivity, the response of Qi Spring Water, which had played a good e-commerce foundation after the arrival of the epidemic, was much more comfortable.
Ruopei was back to work on February 12, the entire factory of more than 100 people, one by one at the end of February, came back at the end of March to fully resume. Orders were affected at the end of March and the beginning of April, but they resumed in the second half of April, and customers added orders and asked them to hurry up production.
Qi spring water that the pattern of the market has been changing over the years, the factory is now more and more vertical, and consumers are getting closer and closer, therefore, the middlemen must be increasingly difficult to do. In the past decade, the Internet economy has exploded, e-commerce giants are also developing the traditional offline wholesale function.
In 2012, Yiwu, the original China Commodity City network revamped and upgraded, named “Yiwu buy”, positioned to serve the physical market, the 70,000 online stores and physical stores bound. There have been media reports, “Yiwu purchase” after the implementation of the September 2014 to August 2016, Yiwu Trade City, an average of 1,039 stores closed each month.
The rise of e-commerce on the trade city has brought the impact, Qi spring water also perceived the trend of e-commerce is representative of the future. E-commerce to Yiwu’s foreign trade merchants have brought new challenges.
From the beginning of 2017, Qi spring water has been figuring out how to do e-commerce. At first, Qi Quanshui opened three accounts on Amazon, and had a good start, an account can sell more than one thousand dollars a day, Qi Quanshui calculated an account and found that there can be more than ten million RMB revenue a year.
If Pei’s products are super large, they can only go by sea. Qi Quanshui began to lay a large number of goods, a push of three containers, his channel merchants to find expensive, more than 100,000; super large pieces in the process of transport packaging requirements are very high, a little carelessness will be damaged, Amazon’s rules are inclined to the consumer, therefore, the return rate is very high.
The return rate is high, Amazon’s overall recommendation is much weaker, therefore, the goods will not sell, as well as Amazon’s logistics fees and storage fees. Amazon’s rules are if the goods turn over quickly, the first month of storage costs are cheap, if it does not sell, the second month will double, the third month will also double ……
Qi spring water finally could not carry the money, it spent money to dispose of the goods, the entire 2018 RuoPei on Amazon before and after the loss of more than 1.8 million. 2019, Qi spring water learned a lesson, there is no large number of laying, according to the Amazon platform sales, ten days, half a month of rapid replenishment, there are hundreds of thousands of profits. In addition, the domestic channel, Qi spring water and others joint venture company in Poundland has been doing more than two years, sales in 2019 also reached more than ten million.
Wang Benjian also did not put eggs in the same basket, foreign trade is his main business, in addition to foreign trade, he is also the founder of Noe organic agriculture, this year his foreign trade business is not good, but the organic agriculture business this year has been explosive growth.
Noe Organic Farming started in Anhui in 2012, and its customers are now mainly China Resourcesola, Haitun Fresh and Yonghui Supermarket. “Not only have all of our products passed organic certification for eight consecutive years, but we have also passed strict third-party base certification.” Benjamin Wang introduced.
In Wang Benjian’s view, the whole society is getting finer and finer division of labor, and it is enough to do a good job with the products.
Expanding domestic sales, living is the first
Wang Benjian also has an identity, is the president of the Anhui Chamber of Commerce in Yiwu, he has been engaged in foreign trade for 30 years. Wang Benjian believes that “this year the global economy may be backward, we encourage enterprises to live is the first, for most enterprises, this year, try not to do more investment, nor expansion, the cash flow to stay, do more upgrades, from management, development, operational excellence, and then wait for the arrival of spring.”
Throughout March, Wang Benjian as the representative of the Anhui Chamber of Commerce and Yiwu Mall Group, Yiwu City Government and the Federation of Industry and Commerce sat together to discuss how to expand domestic sales. Wang Benjian believes that Yiwu was to do the growth of domestic sales, and only later began to do international business. From the past history of Yiwu, it is indeed so.
In September 1982, Choucheng Town small department store market officially opened, became the first generation of Yiwu small commodity market, goods sold to surrounding counties. By 1984, the turnover of this market reached 23.21 million yuan, since then, more than a decade, Yiwu is still a domestic market, in 2001, China’s accession to the WTO has become an opportunity for many businessmen to transform into foreign trade businessmen, but the transformation is a gradual process.
At present, the expansion of domestic sales has become the first priority.
In March, the relevant departments in Yiwu integrated resources, sent 20 investment working groups to the country’s many provinces and cities to attract buyers to Yiwu. “We invite customers to Yiwu, free buses, high-speed rail and airplanes, providing three days of accommodation and food, so that they know that Yiwu customers have normal business and the market is open”, Wang Benjian introduced.
The government also gave various kinds of support to the enterprise, interest rate reduction, lowering, and some tax rebates, but for Zhang Xiao, the fundamental problem she faced was the reduction of orders. in April, Zhang Xiao received some small orders from countries where the epidemic was not too serious, but they were too small; she also thought of lowering the unit price of products to attract customers, but with little success.
In mid-April, the company contacted Sinba, the head netizen of Racer, who valued five products and asked the sales staff to give a minimum price; and then Sinba’s side left hundreds of samples, saying that they were for its small anchors to sell.
Even though the profit was suppressed to a very low level, it still seemed to Zhang Xiao that this was a very good news and it might be a turnaround for her.
Zhang Xiao is under a lot of pressure every day and sleeps very little, she has only one belief in her mind, to keep the business alive. Zhang Xiao had to go to change the business license and increase the operation of epidemic prevention materials.
The company’s salesman communicated with old customers abroad and could send them some masks for free. The operation on Amazon and international websites also became a way to buy accessories and send masks, which attracted some customers, but the logistics was too slow and the price of masks changed rapidly.
The biggest difficulty Zhang Xiao faces at the moment is money. What makes her most painful is laying off staff, which is only Zhang Xiao’s initial plan. She is also contemplating another way out. If she can make epidemic prevention materials, she may not need to streamline her staff.
Of course, someone has already done so. Statistics from the relevant departments of the Yiwu municipal government show that from January to March 2020, more than 30,000 new enterprises were registered in Yiwu.
A long-term study of Yiwu scholars told “Deep Web”: most of these enterprises are related to epidemic prevention supplies, in Yiwu has formed a manufacturing mask industry chain, “we generally believe that the manufacturing industry has been a big impact, but Yiwu businessmen have been looking for a way out, they are very good at finding opportunities in the crisis.”
The fact is also true, Wang Benjian told “Deep Web”, the end of 2020, looking back on the year, the entire foreign trade business from the end of May began to pick up, July reached their normal level for the same period, the entire performance is very stable, and last year the overall level.
Zhang Xiao’s company’s business in 2020 is also the same, she carried down. And the entire year 2020, Qi Quanshui company sales reached 80 million, the successful completion of his initial goal, the upcoming 2021, Qi Quanshui set a small goal for himself – sales of 100 million.
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