Enlightenment Of War Epidemic Self Rescue In A Foreign Trade Factory

Just after the 15th day of January this year, the government, in cooperation with Hangzhou Ruili Technology Co., Ltd., used trains and other means to send batches of workers from all over the country to the factory. This also made Ruili the first batch of foreign trade factories in China to resume work. By the end of February, Ruili's employees had returned to work by 70% or so, but the current operating rate was only about 40% - 50%.

Ruili technology is a research and development, production in one foreign trade export cosmetics enterprises. When the domestic epidemic was raging, Ruili's foreign business was doing well. However, with the spread of the overseas epidemic, Ruili encountered great challenges in the overseas market. For example, at the end of March, Ruili had to close all the offline Wal Mart stores and warehouses in the United States.

It is reported that 80% of Ruili's orders come from the US market. So far, 60% of Ruili's orders have been suspended. At this time, when Ruili was busy preparing for summer and student season products, it was all suspended.

Many products have already received deposit, so it is rare for customers to cancel orders completely. However, Ruili needs to negotiate with customers to postpone the order and make up for it by developing new products, which leads to problems such as re design of products.

At the same time, there are more "idle" people. In other words, cost consumption is inevitable, but also facing the decline of foreign trade orders and sales. "We can't lay down more than one year's employees' burden." Ruili general manager Liu Chunrong said.

Ruili's way to protect the market is also worth mentioning.

01、 Quickly adjust product line

Due to the unpredictability of the global epidemic situation, it is very important to plan the next production capacity. The decline of production capacity means that the staff capacity is excessive and the production saturation is insufficient. "At present, Ruili is afraid that the labor union will be slack, which is a big pain point. If there are enough orders, even if we lose money properly, we will let the employees run enough because we choose not to give up the employees. "

In this regard, Ruili's approach is to arrange the staff of the removed product line to the existing product line, on the one hand, it can stabilize the employees' mood, on the other hand, let them not have to work overtime, and give all workers enough rest time. Today, Riley employees may take eight or ten days off a month. At the same time, Ruili will also arrange half a day to train employees every week.

Compared with the same period last year, Ruili's overall capacity saturation in the first quarter did not drop much. Liu Chunrong was able to return to work in February, because he could still get back to work earlier. But compared with last year, it is only about 80% of production saturation. "

"The more difficult it is, the more we have to find a way. We need to make money and pay out wages. This is the ability, not the layoff. " In Liu Chunrong's view, at this time, it is urgent to study how the process can be better and whether other costs can be reduced less.

Increasing product line and increasing investment in water-based products have become a big opening for Ruili's sales expansion. According to reports, before the epidemic, Ruili's cosmetics production capacity accounted for 80% and 90% of its total production capacity. The remaining part was a water-based workshop production line, mainly making cosmetics remover, disinfectant, hand sanitizer and other products. At present, three of the original five production workshops have been affected, so Liu Chunrong has added two units to the production line of water-based products.

"The original factory capacity has been reduced by 60%, but now the production capacity of water-based products has been increased by 20%. At the same time, it is mainly used for foreign trade and export at the same time." Liu said sales of water-based products accounted for about 40% of its total sales last month, and the share of sales in the next quarter will increase even more.

The company's next strategy is to focus on the short-term growth of its products. In fact, before the outbreak, Ruili was not willing to do it because of the heavy investment in the production and processing of water-based products, without added value and competitiveness.

"Now, as long as it's not a big loss of money, I'll do it. However, if the epidemic is over and the wave recedes, the market will be flooded and the price will fall. If it withdraws late, it will definitely be a pit. " He said.

In addition to disinfectants, hand sanitizers and other water-based products, there are many foreign trade factories to do masks. In this regard, Liu Chunrong believes that when foreign trade factories transform to do other products, they must be cautious. Some of their peers who have entered this track temporarily have already appeared "danger". "It's not that it's very difficult to examine and approve the qualification. It's just that the whole process takes months from the preparation of the application to the end of the examination and approval. When the commodity prices and market conditions are on the decline, we will miss the benchmark time of high price and high volume that can be invested. Moreover, for manufacturers, hand sanitizers, disinfectants and masks, the technology content is very low, and the profit margin has been compressed to the point where it is impossible for the layman to grab the dividend again. "

In his opinion, the production of epidemic prevention materials such as masks is not a "normal" business. Unless the customers of foreign trade factories have their own existing channels and markets, it is very risky to expand the production of epidemic prevention materials directly from the perspective of investment, and it can not be regarded as a long-term layout in the post epidemic era.

At present, for Ruili, what still needs to be solved is to flatten the curve of difficulties brought about by the epidemic situation. For example, Liu Chunrong has two solutions to the problem of staff costs and sales decline: on the one hand, he can maximize sales by relying on the existing expenses; on the other hand, he can reduce some expenses and increase the layout of the sales end.

02、 Multi channel transfer to domestic sales

According to reports, after March, Ruili has increased its investment in the domestic market, that is, turning to domestic sales and arranging live sales. At present, many factories are turning to export.

Fortunately, as early as last year, Ruili has started a part of the layout of export to domestic sales, for example, with 1688 daily sale factory project cooperation. Today, compared with only six or seven categories when joining the daily special sales factory, Ruili has invested more than 20 categories in the domestic market. At the same time, Ruili is also increasing the investment and operation of platforms such as tmall, pinduoduo and Jingdong.

At that time, according to the introduction of the store, Liu Chunli did not have its own normal location before it opened. Now, under the epidemic situation, and with the layout of live broadcasting, it has rapidly "spread out", including the operation of pinduoduo, Jingdong and other platforms. Ruili has increased its investment, and has expanded its domestic trade e-commerce team to more than 30 people.

Whether it's a small domestic trade order from to C, a large foreign trade order from to B, or a customized order, Ruili is willing to come. "There is no way to sell." Liu Chunrong said that due to the small amount of C-terminal to domestic sales, Ruili is also carrying out the layout of "large single" to domestic sales, and has discussed with some institutions, including considering the merger and acquisition layout of enterprises in the domestic market.

Liu Chunrong believes that there will be oversupply in the following situation: the current support plans of major platforms to help foreign trade factories switch to domestic sales, and the situation that the whole market is "swarming" into domestic sales, Liu Chunrong believes that supply will surely exceed demand. However, at present, Ruili will do it no matter whether it is cooperating with the platform or looking for online Red institutions to process and supply goods for them. The reason is "to live".

"But it's not going to be the main direction. From a long-term perspective, Ruili's domestic market, even if it takes a few years, should step by step in accordance with the normal rhythm, rather than overthrow all the previous, as long as short-term interests. " He said.

The lack of e-commerce operation capability has always been a pain point in the transformation of foreign trade manufacturing enterprises, and Ruili is no exception. It is reported that due to its weak e-commerce operation and lack of talent reserve, Ruili has already lost more than 2 million yuan when trying to operate domestic e-commerce terminal last year. Liu Chunrong said that due to the unsatisfactory performance of several stores that were asked to do business on behalf of e-commerce service providers last year, in the long run, if you really want to do business well, e-commerce operation must be mastered by yourself.

At present, Ruili's talent cultivation is mainly based on the current situation of operation. In March, Ruili's performance in 1688 has increased by about 40%, and other platforms are also starting to grow: tmall's daily sales amount to 67000 orders, and pinduoduo's 1000 orders.

"The three platforms, tmall, Jingdong and pinduoduo together, can maintain a daily order volume of more than 20000. Compared with some well done businesses, this single volume is not enough for the road. We have just started. It is better to have a single order than not to have one. It can keep the factory running. In short, it's a little bit more to sell. " Liu Chunrong said that at the initial stage, no matter which product line or channel growth is, compared with the loss of foreign trade orders, it is like a drop in the bucket. It can not solve the big problem, but it is important to adhere to it.

03、 Focus on products at home and abroad

"For some losses, there is no way to turn around. Overall, some orders should come back in July, but I don't know how much it can recover. It's just not as painful as it is now. " In Liu Chunrong's view, nowadays, the whole foreign trade industry does not have many good self-help ways. At the same time, Ruili has to speed up the development of domestic and foreign products, and to keep rapid communication with domestic and foreign customers.

Due to the seasonal problems of color cosmetics products, the color or packaging design style of the products should be considered. However, the whole order cycle takes about 3 months from the purchase of raw materials to the production, transportation and marketing of the products. Therefore, Liu Chunrong pointed out that at present, the United States in June may not be able to take off the mask, some color cosmetics such as lipstick have no time to produce and go on sale in summer. "We can only redesign the packaging and color to make products for the next season. At the same time, we will predict with customers whether the Christmas season can be retrieved after July, and do a good job in the analysis of hot selling products in the Christmas season. "

In terms of domestic products, Liu Chunrong said that the product grade developed by Ruili is much higher than that of last year, and it is more suitable for the domestic market, and the product price is not only "10 yuan 9".

"At present, some of our domestic products have nothing to do with foreign trade. Foreign trade products must still be in the hands of foreign trade customers. How to change the design of customers' orders and convert products with minimum waste, Ruili will adjust and change. "

At the same time, Liu Chunrong believes that the foreign trade market is still a big space, and we still need to find ways to go out. From the perspective of enterprise profits, it is not immediately effective to switch to domestic sales, and it is impossible for enterprises to completely subvert the proportion structure of foreign trade and domestic sales. After the end of the epidemic, the demand leverage in the U.S. or European markets will remain, and the U.S. may have a high unemployment rate in the next few months, and consumers will lack funds, so they will pay more attention to the cost performance of products. Then, it may also be more beneficial to some Chinese manufacturing enterprises.

"Some of the enterprises I know are suffering. For those enterprises that can't make inventory of their products, if they can't sell them, they will lose money. They have to pay bank loans and interest, so they can only choose holidays." Liu Chunrong pointed out that as a result, Ruili factory will not change market decision-making in a large area, but can follow the rapid development law of the domestic market and find phased self-help methods.