“Our annual output is 10 million pieces, and 7 million overseas orders have been canceled this year.” Former OEM for the international fast-selling clothing brand Zara The person in charge of Pleaya Textile Technology Co., Ltd. in Dongguan City, Guangdong Province, which produces sweaters, told reporters.
Zara OEM, Starbucks OEM, Estee Lauder OEM, Zwilling OEM, these domestic OEMs of well-known foreign brands have been busy recently. The same thing: switch to domestic trade.
The sudden outbreak of the new crown epidemic has caused a sudden drop in demand in foreign markets, which has weakened the original support Their foreign trade OEM orders were either canceled or stopped, but the production lines and workers of domestic factories could not stop. In order to expand sales, they began to explore the domestic market that they were not familiar with before.
The reporter learned from Alibaba that within a month, Alibaba’s domestic trade platform A total of more than 20,000 new foreign trade factories have been added to 1688, with an average of nearly 700 foreign trade factories settling in every day. The transaction volume of foreign trade factories on the platform has exceeded 22 billion yuan a month.
Alibaba revealed that since last year, at least 320,000 domestic export-oriented Export companies are seeking to transform into domestic trade. The transaction scale of companies originating in Fujian, Jiangsu and Guangdong on this platform increased by more than 250% in March this year compared with February.
According to the latest statistics from the Ministry of Commerce, from January to April this year, affected by the epidemic , China’s total import and export volume was 9.07 trillion yuan, a decrease of 4.9%. Among them, exports were 4.74 trillion yuan, down 6.4%; imports were 4.33 trillion yuan, down 3.2%; the trade surplus was 415.7 billion yuan, down 30.4%. Exports of seven major categories of labor-intensive products, including clothing and toys, fell by 10.2%.
The State Council executive meeting on April 7 pointed out that processing trade accounts for 20% of China’s foreign trade 1/4. It is necessary to coordinate the development of domestic and foreign trade, support processing trade enterprises in relieving difficulties, and promote the stabilization of foreign investment and employment. For domestic sales of bonded materials or finished products under processing trade, tax deferred interest will be temporarily exempted before the end of the year.
Many traditional foreign trade OEM companies The factory began to consider increasing its exposure to the domestic trade market. The relevant person in charge of Zhejiang Feijian Industry and Trade Co., Ltd., which produces thermos cups for Starbucks, Hydro Flask and other brands, told The Paper reporter, “This year’s domestic trade market is particularly important to us.” span>
According to the person in charge, the company has been doing foreign trade OEM for 16 years, and foreign trade orders account for about 80% of the total business volume. However, due to the epidemic, about 30% of overseas orders expected to be sold to North America and Europe have been canceled or suspended since March this year.
“Now overseas orders can no longer keep up with our production capacity. As As a large OEM factory, we are still well-known in the industry, but our own brand is not well-known in the domestic market, so we also want to take this opportunity to enter the domestic market and build our own brand.” The person in charge said.
However, although the company has entered many domestic online platforms to carry out internal trade, but the person in charge still said, “The current domestic trade volume is still a drop in the bucket compared to our previous foreign trade volume.”
The person in charge explained that large OEMs that have adapted to the “rules of the game” of foreign trade may encounter difficulties in many aspects in the early stages of switching to domestic trade. Parameters such as product appearance and model will be calculated by large international companies through pre-investigation beforehand. The factory can just start production according to the order. After switching to domestic trade, it must continue to design new product styles according to the preferences of domestic consumers.
On the other hand, the difference between domestic trade and foreign trade is that most of the foreign trade orders are huge OEM orders, which are supplied to multinational companies. Products are supplied to the global market, while domestic trade orders are small and fragmented. “Some orders cannot reach our minimum order quantity, but we can now customize small batches for domestic customers.”
The relevant person in charge of Shenzhen Xiongwang Technology Co., Ltd., which manufactures makeup brushes for international cosmetics companies such as MAC and Estee Lauder, also talked about the above difficulties with reporters from The Paper.
In recent years, the company has focused on OEM makeup brushes and other beauty products for well-known cosmetics companies. For makeup tools, foreign trade orders previously accounted for about 70% of the company’s total business volume. Affected by the epidemic this year, most orders have been suspended.
“We produce millions of sets of makeup brushes every year, but we have stopped this year. There are eight or nine orders, and two orders have been cancelled, accounting for about 60% of the total orders. Because the ports in the United States are closed, customers cannot receive goods, so they will wait and see.” burdenThe person in charge said.
The person in charge said, “Actually, we have been doing domestic trade. The volume is not large, but this year, domestic trade may be the main focus. However, so far, the domestic market is not very active, and the volume of domestic trade has also declined compared with previous years. In other words, we are currently facing both domestic and foreign trade. The problem of decline.”
Mentioning the next step, the person in charge He said that the company’s next step is to develop its efforts in both the domestic online platform and the offline market. However, the company does not plan to promote makeup brushes in the domestic market, but wants to sell toothbrushes. “We started brewing this product last year and will launch it this month.” It can be produced because the users and market will be larger. The bristles of our toothbrushes are also made with our own technology and will be softer.”
In addition to the above-mentioned difficulties in switching from foreign trade to domestic trade, the person in charge of the company also told reporters that the only difficulty the company encountered when launching offline sales was Funds, “It’s not easy to get loans. It would cost millions to open a few supermarkets in a large area.”
The relevant person in charge of Dongguan Pleya Textile Co., Ltd., which previously mainly manufactured sweaters for Zara, CK, Polo, GAP and other international clothing companies, told The Paper: “During the epidemic, it is important to make sweaters. Completed orders can only be placed in the warehouse and cannot be shipped. All other orders that are not in progress have been cancelled. There are about 8 million pieces in total, 1 million pieces have been completed and cannot be shipped, and the remaining 7 million pieces are all Canceled.”
The person in charge told reporters about the company’s current difficulties situation. “Currently, due to the decrease in overseas orders, 70% to 80% of the factory’s workers have already taken leave. Without domestic trade orders, the factory may not be able to sustain the current situation.”
He said that the company has been preparing to expand the domestic market and reduce its dependence on foreign trade since 2016, but the current order volume in the domestic trade market The foreign trade market is still relatively small. “It’s not yet the peak sales season for knitted sweaters, and we are still in the process of negotiating with customers and making plans. The difficulty in domestic trade is that the order quantity is scattered and there are many styles. This is very different from foreign trade. For example, one order from Zara There may be 30,000 or 400,000 pieces of a style, but for domestic trade, a single order of 1,000 pieces is already considered good.”
Jinhui Knives and Scissors Co., Ltd., located in Yangjiang, Guangdong, was founded in 1989. It is currently the only “export inspection-free” enterprise in China’s hardware industry. The relevant person in charge of the company told The Paper that the company mainly manufactures knives and scissors for German kitchenware brands such as Zwilling and WMF. In previous years, it had 30 to 40 million overseas orders every month. However, this year, affected by the epidemic, foreign trade in the first quarter fell. Orders decreased by 18% year-on-year.
Since the end of last year, the company has deployed domestic trade. In March this year , the company’s own brand “Kitchen Cube” knife and scissors set was launched online. It only took 14 days from project establishment to selling the first set of products, and sales exceeded 200,000 yuan during the platform promotion at the end of March.
Previously, the China Council for the Promotion of International Trade surveyed 700 foreign trade companies and showed that 70% of the respondents Enterprises said that it will be difficult to obtain new export orders this year and foreign trade will face a severe situation. Nearly half of the enterprises have a strong intention to switch to domestic sales.
But at the same time, foreign trade companies are facing domestic market space in some industries when exporting to domestic sales. Small, difficult to build domestic sales marketing channels, high capital chain risks, inconsistent domestic and international standards, and difficulty in adapting to domestic sales in the short term. To this end, the China Council for the Promotion of International Trade recommends that e-commerce should be further developed by holding online trade fairs for foreign trade companies, building a domestic supply and demand platform with a large platform, a wide audience, and safe foreign exchange collection, strengthening the docking of production, supply and marketing, and assisting foreign trade companies to explore the domestic market. , Promote the coordinated development of domestic and foreign trade.
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