Closing of the Second Phase of the Canton Fair Decreases Asian and African Exports Growth in Asia and Africa

On the 27th, the second session of the 110th Canton Fair concluded at the Canton Fair. In this issue, consumer goods, gifts and furniture accessories were mainly exhibited. Most of them were labor-intensive products. Exhibitors were more sensitive to rising costs. According to statistics, as of October 26, this year's Canton Fair reported a total of 166,000 merchants, and the number of visitors to the museum was 76,000.

The relevant person in charge of the National Light Industry and Commerce Association told reporters that the total turnover of the Light Industry and Commerce Fair was 3.86 billion U.S. dollars in the three days before the current Canton Fair, an increase of 7.1% over the same period of last year. Affected by the current economic weakness in Europe and the United States, this year's trade in Europe and the United States has declined compared to the previous session, down by 6.1% to Europe and 7.4% to the United States. Exports to Asian and African countries and regions increased by 16.3% and 10.2%, respectively.

However, in an interview, the reporter found that labor-intensive enterprises have resorted to different ways to break through due to weak external demand and rising domestic production costs.

The third phase of the Canton Fair will be held in the Canton Fair Complex from October 31st to November 4th. It will mainly exhibit textile and apparel, footwear, office, luggage and leisure products, medicine and medical care, and food.

【The Way of Breakthrough 1】

Reduce market demand? Use your own design to “gold rush”

The sluggish external demand is the biggest problem encountered by foreign trade companies at the current Canton Fair. However, there are still many companies that "come up with difficulties", use innovation to win the market, and use better technology and products to impress customers.

“You see that these samples we exhibited were each selected from at least 30 designs.” The head of the Fujian Provincial Furniture Import and Export Company pointed to the samples displayed on the scene and told reporters. According to reports, the company's designer team will produce more than 1,000 sofas, armchairs and accessories every year, but only one out of every 30 ideas can pass through strict selection and enter the prototype production stage.

Some companies even use "outside the brain" to help companies improve product design. The person in charge of Shanghai Maglond Bone Porcelain Co., Ltd. told the reporter that the company invested more than 5 million yuan and hired French designers to research and develop new products. The sense of product design was better and the competitiveness was greatly enhanced.

Nanlong Group, located in Zhejiang Jinhua, is the largest stainless steel vacuum insulation cup manufacturer in China. In order to find new profit growth points, the company not only set up a stainless steel product research institute, but also invested nearly 30 million yuan to implement technological transformation, develop new non-stick pan products, and maintained a steady increase in profits.

Breaking Road 2

OEM processing without the right to speak? Another challenge that Chinese foreign trade companies face in promoting brand building channels is that the traditional OEM process allows companies to be at the bottom of the “smile curve”, with no brand or channel, and no voice in trading.

Jiangsu Zhongjiang Company independently established the HomeArt brand, and specifically hired a professional brand packaging design company in the UK to send Ruiang company to plan for corporate brand promotion. According to the person in charge of the company, according to the new brand plan, the company's products changed from the original bright colors to more peaceful colors, which is more in line with the aesthetic habits of European and American people. "Investment was only over ten thousand yuan, but the effect was obvious." The transformation of Chaozhou Qingfa Ceramics Co., Ltd. is even more complete. The company started its transformation from domestic sales to domestic sales three years ago. Today, it has opened 12 ceramic product stores in the Yangtze River Delta region to promote its own brands and build domestic sales channels.

“China’s manufacturing industry will eventually lose its cost advantage. Now the monthly salary of the senior technicians in the ceramics industry has approached European countries such as Portugal, and the technical content of ceramic products is not high. It will be replaced by other regions sooner or later.” Cai Anyang, head of the company, analyzes that the consumption power of the domestic market has grown rapidly in recent years, and domestic sales now account for 30% of the company's turnover, and it is still growing rapidly. "Our ultimate goal is to realize the full bloom of import and export, domestic and foreign sales. We will use built-up domestic sales channels to introduce international brands," Cai Anyang said.

【The Way of Breakthrough 3】

Europe and the United States market sluggish? Extending the status quo of the emerging markets in response to the downturn in Europe and the United States, many manufacturing companies have focused their attention on emerging markets.

“At present, orders in the Middle East market are relatively stable.” A person in charge of a company in Jiangsu told reporters that enterprises have focused on the development of emerging markets in Asia, Africa and Latin America at this time of the Canton Fair.

The products of Qingdao Guoqiao Company are typical “European court style” and they are very popular with European merchants at the previous Canton Fair. However, Zeng Limin, the person in charge of the company, told reporters that since the financial crisis in 2008, European and American merchants have significantly decreased, especially in Greece, Spain, and other countries, but orders in countries such as Eastern Europe, South America, Japan, and Russia have increased significantly.

“The current situation of the Canton Fair is not good, but our orders have increased, relying on emerging markets. Although their orders are relatively small, but the number of wins, 5 small orders, add up to a total of a large order "Zeng Limin said that the company's market structure has now accounted for 80% of the market from Europe and the United States, 30% to Europe and the United States, 30% to emerging market countries, and 40% to Japan and Southeast Asian countries.

【The Way of Breakthrough 4】

Barriers to trade? Actively transform the production process in Europe and the United States market, "Made in China" is facing more and more trade barriers.

Starting from July 1 this year, the United States adopted the "Complex Wood Products Formaldehyde Standards Act," and the new limit standard has increased substantially, 3-4 times more than before. This has raised higher quality requirements for China's export furniture products.

In order to cope with these changes, Caopu Technology Co., Ltd., which is mainly exported to Europe and the United States, has scientifically adjusted the types of export products and production plans in accordance with the provisions of the new act. On the other hand, it has increased the management of raw and auxiliary materials and purchased man-made products that meet the requirements. Board raw materials and environmentally friendly adhesives.

However, the impact was obvious. Some exhibitors stated that after the implementation of the new bill, the comprehensive cost of raw materials increased by 5% to 7%, and more than 30% of furniture exporters were affected.

In Europe, the "European New Zealand Toy Safety Directive" places stringent demands on toys, such as the strict limitation of harmful metal content. Guangdong Converse Toys Co., Ltd. listed the children's age range applicable to toys on the product packaging, and the company also passed the relevant environmental protection system certification to ensure that the raw materials used in the toy, the production process, and the discarded will not pollute the environment.

[Stop 5]

Large changes in exchange rate losses? Three strokes to reduce the exchange rate risk gradually increased, plus the previous US Senate passed the exchange rate bill, many companies lamented that the exchange rate changed, the hard work of a few months gone. For this reason, export processing companies have responded to various tricks.

According to the relevant person in charge of the Jiangsu Trading Group, companies generally adopt three methods to deal with exchange rate risks. One is to sign a currency exchange lock contract, commonly known as “locking exchange”. The second is to sign short orders to avoid long orders. The third is to use financial derivatives and export credit insurance.

At this session of the Canton Fair, the Ministry of Commerce and the People's Bank of China also jointly organized forums to actively promote cross-border settlement and help companies reduce foreign exchange losses.

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