The "China Strategy" Of The Pricing Power Of Australian Sheepskin Trade

In the international raw material market, China's position as the world's largest importer of raw material skin has long been established. But "big" does not mean "strong". In the past 10 years, the price of international raw leather has skyrocketed. Authoritative figures in the industry and tanning enterprises have pointed out that China still has "slight words and light" in the global leather market, and lacks the pricing power in the international market, which has made Chinese leather enterprises in the international market competition have been in the low wind.

But there are also special cases. In the Australian Sheepskin international market, Chinese enterprises have absolute right to price. In the recently held 2014 China Leather Association footwear Specialized Committee 2014 and the third China footwear industry development forum, the chairman of Australia's max Group Co.

Quantitative change leads to qualitative change and lays the foundation for pricing power.

Referring to the Australian Sheepskin trade, we have to mention Longfeng fur and Australia's group.

Longfeng fur, the world's largest sheep fur tanning enterprise, is also the only drafting unit of sheep shearing industry standard in China, and has gained fame in the international fur market.

Masler, who is a brother company with Longfeng, is not as big as long Feng in terms of scale, business type and sales volume. But the huge volume of 5 million sheepskin sheepskin purchased each year also makes it an indispensable part of the industry.

Hu Yunhua introduced that the raw leather purchased by the two enterprises in Australia alone is 50% of Australia's sheepskin.

In addition, the average annual goats' skin in Australia is 80% acquired by Masler. The highest purchase year can reach 95% of the total, while Australia's sheepskin 95% is sold to China, most of which are bought by Longfeng fur.

What does this amount of purchase mean for the market pricing power? Professor Yuan Dong of Central University of Finance and Economics has interpreted this from an economic point of view.

He believes that the pricing power depends on the intrinsic value of goods and depends on the comparison between specific supply and demand.

In view of this, China is the largest buyer of Australian sheepskin and the country with the largest demand for semi-finished and sheepskin finished products such as tanned sheepskin. This shows that China is also fully capable of influencing the development of Australian Sheepskin prices to our advantage.

Quantitative change leads to qualitative change.

It is precisely because such a large volume of imports has laid a solid foundation for these giants to grasp the absolute pricing power in the raw material market of Australian sheepskin.

When it comes to the above situation, many people will be puzzled and puzzled. With the huge import volume and adequate domestic demand, why only Australian Sheepskin fully exerts this advantage and has successfully grasped the pricing power?

Hu Yunhua believes that this is inseparable from the "human and" factors.

"Although China's leather and rare animal skins and other imports are the most important in the world, they are too numerous and too scattered to buy, and they can't make a single rope in the international market."

According to the survey, there are about more than 600 tanneries in China.

Taking cowhide as an example, annual processing demand reaches 200 million mark sheets, of which 50% depends on imports.

"Even if the price of international raw material skins fluctuates slightly, it may have a great impact on China's leather industry."

Tanning experts in the industry have expressed this view.

The profit compression caused by many factors, such as rising price of raw materials, rising labor costs and increasing environmental pressure, has seriously restricted the development of leather making enterprises.

Among them, the price fluctuation of international raw materials has a far-reaching impact, but the strength of one of our enterprises can not compete in the global market.

There is a general manager of leather making enterprises that reflects that domestic tanning enterprises can not stand on the same level of interests as foreign entrepreneurs and seize the favorable position of the international market.

Looking back at Australia

Purchasing enterprises, mainly dominated by Longfeng fur and Mars, make it possible for them to reach a consensus on pricing, which will not lead to self governance. This will play a key role in pricing power.

Hu Yunhua said that the relationship between Longfeng fur and large buyers such as the max group is very good, which is conducive to the healthy and stable order of the whole industry. And such a large aircraft carrier, such as Longfeng fur, leads the development of Australian Sheepskin business, which is absolutely a good thing for other enterprises.

The research shows that in the market-oriented economic environment, the pricing power of most commodities is in the hands of oligopoly enterprises. Whether they buy or sell, oligarchs hold the initiative in pricing, while highly dispersed parties can only choose to accept passively.

In the leather trade, there are disorderly competition and large dispersion among Chinese domestic enterprises. It is difficult to form a solid alliance with unity.

This is probably one of the important reasons why Chinese enterprises can not control the price of raw leather.

Like Masler and other companies, capital chain health and liquidity are abundant, forming the important factors that these enterprises firmly control the pricing power of Australian sheepskin.

According to Hu Yunhua, after years of ploughing, he has embarked on the road of steady and healthy development. "There is no loan in any bank, and only deposits in the bank".

Hu Yunhua said, "the Australian slaughterhouses want a long-term stable partner, so they are very concerned about the credibility and financial resources of the cooperators."

Even if a company snatch their resources in Australia at a higher price than the average purchase price, the partners will not immediately hand over all their business to them.

Because they will fully assess the possibility of long-term cooperation with the other side, and conduct exploratory cooperation for a long time.

In addition, before and after 2008, during the drought in Australia, the farming situation was bad, and the slaughterhouse was in great difficulty. Masler and other enterprises bought a large number of Australian sheepskin to save the owners of the business. This "life-saving grace" also laid the foundation for the long-term cooperation between the two sides.

In addition to the strength of the enterprise in the capital, the channel is also an important condition for ensuring its everlasting prosperity.

Although the theory of channel king is not golden, it is applicable to Australian Sheepskin trade.

Therefore, the Longfeng fur and Mauser group, which has salt pickling preliminary processing plants in Australia and have mastery of multi-party sales channels in China, also have the unmatched advantages of other enterprises.

Hu Yunhua believes that, on the one hand, the Masler group can directly agree with the enterprises that purchase sheepskin to Australia to see the goods on the spot, and on the other hand, Masler can also pport salt pickled sheepskin in Australia to other countries and regions in the world, and sell them through various channels of development.

This strong distribution capability has also enhanced the dominance of Longfeng fur and Mars group in Australian Sheepskin business.

The lack of international pricing power of raw materials has always been a pain in the tannery industry in China. Therefore, finding the right pain points and breaking through has been a hot topic for entrepreneurs in the industry.

"It's hard, but we have to do it."

From some entrepreneurs' words, it is easy to smell the restlessness and anxiety.