“There are currently no countermeasures, we can only lie down for now.” Yu Zheng said. Yu Zheng is the head of a foreign trade company in Shaoxing. In the past ten years, he has exported fabrics to 45 countries around the world, with sales of 400 million yuan last year. However, in just one month during the epidemic, 90% of orders were canceled, instantly falling from the “golden age” to the “iron age”.
Yu Zheng’s company is located in the urban area of Shaoxing. While he is worried about the disappearing orders, the daily traffic of China Textile City, 11 kilometers away, has also shrunk from 100,000 to 10,000. A local industry survey report in Keqiao showed that 78.4% of textile companies said orders were decreasing, and 64.8% reported that existing orders had been canceled by customers.
Sudden life and death crisis
Yu Zheng looked physically and mentally exhausted due to being busy with order cancellations, payment stops and other matters. , people lost a lot of weight. The destructive power of the epidemic on exports is something he has never encountered in his entrepreneurial career.
In 2007, he rented an office of 200 square meters and started a foreign trade company that provided fabrics to European and American clothing companies. At that time, it was the golden period of “Made in China” exports, and the foreign trade industry was advancing rapidly. Yu Zheng took advantage of the trend and grew rapidly. Within two years, he bought an 800 square meter office building. Five or six years later, he bought the building where the company is now located. 27 acres of land. Before the epidemic, his company’s export volume ranked among the top five locally.
Before the end of February, Yu Zheng still had a lot of orders in hand. Foreign customers were chasing him and asking if they could speed up production. He desperately urged the factory to “recruit workers quickly and resume work quickly.”
At that time, Yu Zheng was worried about whether an epidemic would occur after the company resumed work. His company was one of the first local companies to resume work. It started working normally on February 17, and all employees returned to work on time.
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Everything happened unexpectedly
Since March 10, local time, all of Italy Since then, Spain, France, the United States and other countries have successively adopted control measures, not only restricting the movement of people, but also halting the flow of non-anti-epidemic materials.
Order cancellation emails were sent to Yu Zheng’s company one by one. “If a foreign businessman sends an email, the orders we are currently making will be stopped, and orders floating at sea will also be rejected. The United States is the most powerful, and there is no room for negotiation.” Yu Zheng said that these canceled orders were due to the Spring Festival The order was placed before, and the preparation work related to the order, such as proofing, had already started around November last year.
Today, Yu Zheng is no longer so calm and begins to hold emergency meetings and sort out orders. “Stop what should be stopped, and how to deal with what cannot be stopped? For example, we have suspended half of the orders ourselves, because it takes time to verify the situation with foreign customers.” By March 29, this foreign trade company The company’s stopped orders amounted to 3 million yuan.
Yu Zheng is still receiving news about customer refunds and delayed payments. “The payment time for previous orders has come, but the other party asked for an extension of 90 to 120 days, or even 180 days.” As a result, his financial pressure is steep. increase.
Orders were suspended and balance payments were deferred, but daily expenses continued as usual. Manpower expenditure is the biggest cost that Yu Zheng currently faces. Many colleagues have begun to implement the system of “one day off and half salary”, but he did not follow this policy. His employees used to work 6 days a week, but now work 5 days a week, and they receive not a penny less in salary every month.
“The year-end bonus may be adjusted according to the actual situation.” He said that business leaders must shoulder their due social responsibilities. “The big deal is to take out the money earned in the past.” Calculated based on the current daily operating expenses and employee wages, Yu Zheng lost 1.5 million yuan a month.
From struggling to resume work to being forced to reduce production
The “pause button” pressed by foreign businessmen hit Chinese factories that had just resumed production on the other side of the ocean.
On March 18, Chen Honghua received a call from the boss of a large local textile export company. The other party hoped that he could produce an export company research report and submit it to the local government as soon as possible. Chen Honghua is the secretary-general of a regional home textile association in Zhejiang. After receiving the call, he conducted a centralized survey of member companies in just a few days.
The results of the survey are not optimistic. Among its member companies, half of the companies have had more than half of their orders canceled; 20% of companies have had their orders canceled between 20% and 50%, and 40% of companies have had their orders postponed.
On January 21, at the 21st China Textile and Apparel Trade Exhibition (New York) Spring Exhibition held in New York, the United States, a foreign trade company Company staff (left) introduce products to visitors.
On the one hand, a large number of orders have been canceled or delayed, and on the other hand, new orders are almost zero. Chen Honghua told reporters that home textile companies mainly obtain customer orders through international exhibitions. But now this channel has been temporarily blocked by the epidemic. All international exhibitions in the home textile industry in the first half of 2020 will not be able to proceed as planned. “Shenzhen in March�A friend entered a mask production line.
There are many companies that have made similar choices. Whether it is companies engaged in yoga clothing exports or member companies of the Home Textile Association, they are currently trying to shift to the production and sales of protective products. In Teng Jinyu’s view, although the profits from the mask assembly line are no longer as impressive as in the previous two months, they can at least keep the factory alive. “Only by staying alive and waiting for the foreign epidemic to end can customers find you again.”
But there are exceptions. Yu Zheng has donated nearly 10,000 masks to customers in different countries, but he is not prepared to treat this as a business. “It is more appropriate to let a professional foreign trade company do it.” He said that the supply of goods is now tight. If one more foreign trade company enters the market, there will be more pressure to increase prices, and the market order will only become more chaotic.
“I won’t cause trouble.” Yu Zheng showed a wry smile.
In his opinion, switching from foreign trade to domestic sales is not a good choice. “The domestic sales market is still sluggish right now.” Yu Zheng took Keqiao’s so-called “cloth selling king” as an example. Its sales this year dropped to 30% of the same period last year. “Besides, there is no sales team and no sales network. How can you switch to domestic sales all at once? Others have already trained their muscles and bones very well, so what can you do to compete with them?”
Chen Honghua also believes that moving from export to domestic sales is the key to success. There is a long road ahead. “If it was originally supplied to the US market, its products are American-style and may not be suitable for the domestic market. Domestic demand has not yet rebounded.” Obviously, Chen Honghua does not believe that domestic sales can be boosted in a short time. Performance of foreign trade factories. “And as far as fabric factories are concerned, after switching to domestic sales, they will be supplied to garment foreign trade factories, and the final payers will still be overseas customers.”
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The home textile industry is one of the major block economies in Zhejiang and one of the backbone industries for exporting and earning foreign exchange in Zhejiang Province. What is comforting is that before the epidemic, the home textile industry here had already started to change its domestic and overseas markets in order to seek breakthroughs.
Even though the road ahead is bumpy, Chen Honghua can still feel that these entrepreneurs are working hard to shoulder their social responsibilities. More than 50% of them said they would not lay off employees, 20% said they might lay off 10% to 30% of their employees, and some companies were waiting and watching. “They have repeatedly stated that they will try their best not to lay off employees without laying off employees, so as not to cause trouble to the country.”
Of course, they also hope that the country can come up with more supportive policies to tide over the difficulties together with the enterprises. Among the demands of enterprises, the most concentrated opinions are whether the government can provide more support to enterprises in terms of subsidized loans, Sinosure premium subsidies, exhibition subsidies, etc., and whether it can make appropriate reductions and exemptions for social security, taxes, rent, etc. .
In Yu Zheng’s view, in this crisis, the companies that can survive are those companies with relatively healthy finances and without excessive development and investment. These companies can grit their teeth and persevere. “This is the only way out.”
At the request of the interviewee, Yu Zheng and Chen Honghua are pseudonyms in this article</p
