Why Not Consider "Export To Domestic Sales" In China?

At the beginning of this year, I read a book called "leaving China made one year". In this book, the American housewife and reporter Sara discovered that her life was full of "Made In China" products, so she suddenly decided to make all the products made in China out of the house.

But in the process, Sara found that after leaving China, her life was full of expensive and inconvenient, so she used the whole book to pour out her experimental experience to the people of the world.

But soon after I heard Sara's complaints, Chinese factories that made cheap goods for Americans like Sara began to fall into production difficulties and shut down.

Of course, this is not because Sara's complaints have worked.

Since the second half of last year, with the appreciation of the renminbi, the adjustment of the national export tax rebate and the soaring price of raw materials, and the downturn of the global economy has hit the shopping enthusiasm of European and American consumers, the Chinese products that once won the price advantage have lost their luster.

For those Chinese manufacturing enterprises who rely heavily on exports and exports, it will be more natural.

The first time to feel the pressure of rising costs and the depreciation of the US dollar will also be the Pearl River Delta's manufacturing city of Dongguan.

Dongguan is the largest IT product manufacturing base in the world. Besides, Dongguan's shoes, furniture and clothing export is also famous.

However, the first half of the year's economic data released recently showed that in the first half of this year, the Dongguan contract made the first negative growth in the use of foreign capital and the actual utilization of foreign capital in 30 years, and the investment contract was reduced by 57. The negative growth rate was 13%-14%. From 1 to May this year, 405 cities were closed down and pferred to foreign-funded enterprises, an increase of 36.4% over the same period last year.

For a long time, China's manufacturing industry relied on national policies, especially when China had just joined the WTO, and relied on the low cost, low exchange rate and low labor wage policy advantages to gallop in the global market.

The manufacturing crisis in Dongguan has exposed the weakness and risk of China's manufacturing industry, which relies on a large number of laborers to earn profits through simple labor.

In this crisis, China's manufacturing industry not only exposes the weakness of lack of independent technology and private brand, but also exposes the danger of single product and sales channel.

In this wave of Dongguan's shutdown, a representative case has aroused the attention of the multimedia - Golden Reuters Industrial Co., Ltd., a well-known export enterprise in Dongguan and the largest supplier of the WAL-MART barbecue furnace in the world.

In the glorious 2004 to 2005, the golden ox company had 4 million 500 thousand different types of barbecue stoves sold abroad, and these products were exported to five countries such as the United States, Canada, Australia, the United Kingdom and Germany.

But in March of this year, the seemingly powerful company had already gone to a stop production. The price of raw materials even made the company unable to fulfill the contract signed with WAL-MART. Those Sara complained about the "Made In China" barbecue lying quietly in the finished product warehouse, not knowing what kind of fate tomorrow will face.

Although the company owns its own brand, the company only produces the barbecue stove used in Europe and America as the sole product of the enterprise, which has led the company to rely too much on the sales channels of foreign distributors. When the enterprises are facing the pressure of rising production costs, the sales channel companies are carving out cheaper enterprises, while Jin Wo Niu, because of the lack of other decompression channels, has led to the eventual shutdown of the enterprises.

"Channel is king" is not a new word in China, but many manufacturing enterprises in China are often willing to choose ready foreign distributors instead of establishing their own marketing channels, especially in the domestic market.

The imperfect market channel has led enterprises to rely on price advantage to please foreign distributors. The most direct consequence of this dependence is that when the market is in trouble, foreign dealers are likely to abandon the downstream manufacturers because of price and cost, and find other enterprises with more advantages.

The enterprises that have been cut off the sales channels will naturally face the danger of malnutrition.

At the time of the arrival of the Beijing Olympic Games, for the domestic manufacturing enterprises which are too dependent on export oriented, if we can fully seize the opportunity of the Olympic Games to expand domestic demand, establish domestic sales channels for our products, and pform the risk of over reliance on foreign channels, we will be able to get out of the shadow of the survival and development of enterprises.