Why Does Haining Leather Export To Russia?

In the past 2003-2007 years and five years, the export volume of Haining leather garments to Russia has dropped from $150 million to US $30 million, and the share of trade has dropped from 80% to 15%, which is a fatal experience for Haining leather clothing, which has long regarded Russia as an "exporter".

It is understood that Russia is the largest export market of leather garments in Haining, which once accounted for 80% of the export of leather garments in Haining, and played an important role in promoting the development of leather clothing industry in Haining.

But since 2003, the sales of Haining leather clothing in the Russian market have shrunk, which has brought great impact to the leather clothing industry in Haining.

"Gray customs clearance" blocked interview reporter learned that the Haining building, once known as Russia, is also a light business, and the number and business volume of enterprises are decreasing.

"This is hardly the case with Fabio 10 years ago."

Zhao Xinwen, director of the foreign trade section of Haining foreign economic and Trade Bureau, said.

It is understood that between 1996 and 1997, leather clothing in Haining once made a profit in the Russian market.

"That's huge profits," said the head of the Haining Leather Association. Although the quantity is small, the single piece profit is huge.

The reason is, Zhao Xinwen analysis said: "this is attributable to the gray customs clearance, low cost advantages and fewer competitors."

In the interview, he referred to "gray customs clearance", and a business owner who had been engaged in leather clothing business for many years in Russia came to the spirit.

"This is a hidden rule, everyone is engaged in", he told reporters that before the 10 containers of goods, through the Russian customs clearance company, only need to pay in fact only equivalent to 2 containers tariff, and the specific operation by the customs clearance company to be responsible, the whole process does not need them to intervene personally, only to pay $ten thousand to the customs clearance company.

In short, it is through the Russian customs clearance company to conduct "abnormal" customs clearance, "that can bring considerable profits, and it has great attraction for everyone". He said, "my business started at that time."

During this process, the actual "low tariff" also came into being, and in the boss's view, all this is only a beautiful memory after 2003.

"After 2003, our export volume to Russia is decreasing year by year," said the head of the Haining Leather Association.

With the accelerated pace of Russia's accession to the WTO, the new customs law of Russia was introduced in 2003, and the tariff on leather clothing has been improved to varying degrees. Meanwhile, customs supervision is more stringent, and enforcement by law enforcement departments has been intensified.

"This is no doubt plugging the way of" grey customs clearance ", the boss said." even for a more powerful enterprise, if you want to send goods to Russia, you will need to pay a higher price, and a large amount of expenses will be used to contact more customs companies.

The key problem is that the "grey customs cargo" has arrived in the Russian market. Once the law enforcement department finds that there is no formal declaration form, it will be severely punished, or even confiscated, and the enterprise will lose everything.

The increase of risk is also a deterrent to every enterprise.

Prohibiting foreigners from selling in Russia, according to Zhao Xinwen, Russia issued a ban in April 2007, not allowing foreigners to engage in small-scale retail operations in Russia.

As a result, the original leather clothing retail business can no longer go on, without retail, leather clothing wholesale business will be deserted.

At present, except for a small number of retail outlets in Moscow, there are few other retail outlets in Haining.

To a certain extent, it has dampened the enthusiasm of some leather clothing exporters in Haining. "Some enterprises simply reduce or abandon trade with Russia."

He said.

Low price advantage is no longer the same time, Turkey, Vietnam, India, Pakistan and other countries have entered the Russian market in recent years, and the products of these countries have a certain impact on Haining's leather clothing at a lower price advantage.

"These countries, apart from Turkey, have lower raw material prices and labor costs than domestic ones. Even if they go through normal customs clearance channels or high price" grey customs clearance ", they can run our market at low prices.

Zhao Xinwen said.

It is understood that Haining leather clothing exports to Russia are mainly low-grade, low value-added products.

In 2007, the price of leather raw materials in the domestic market increased by about 40%, and labor costs were also rising. The enterprises did not adjust their development strategy in a timely manner, and the competitive advantage was no match for those enterprises.

The RMB appreciation and the export tax rebate reduction and other factors, to a certain extent, have led to the reduction of the profit margins and the shrinking share of the market.

Abandoning or struggling to guard against internal and external attacks, facing all kinds of unfavorable factors in front of us, it is urgent for Haining leather clothing to choose to leave the Russian market or stay hard.

At the moment, however, many companies remain wait-and-see and turn to the European and American markets.

It is understood that the current export of leather enterprises in Russia almost reduced by 1/3, and many enterprises have compressed export volume, only to maintain contact with the Russian market without interruption.

In this regard, Zhao Xinwen said: "the current situation is believed to be only a phased and a pitional period in the market. We will certainly not give up the market for Russia, but at the present time, enterprises are diversify their risks and turn to the European and American markets. After the market situation becomes clearer, enterprises are confident to go back."

Insiders pointed out that despite this, enterprises are forced to explore new markets in Europe and the United States with larger costs and difficulties, because Russia's environmental climate, population density and people's habit of wearing leather clothing make the Russian market much larger than that of the European and American markets.

Zhao Xinwen said that constantly upgrading product quality and added value is to actively explore new markets, implement diversification strategy, weaken dependence on Russian market and reduce the risk of trade market. At present, many enterprises are making efforts in this direction.