Slow offline market leads online push

Wu Mingxian, marketing director of Guangxi Yikai Household Products, has been preparing for the 129th Canton Fair very hard in the past two months.

He arranged staff members to film exhibition materials, prepared a 3D exhibition hall, set up live broadcast facilities at the factory and invited potential buyers to his company. Like many other exhibitors, he has high expectations for the fair.

“COVID-19 has affected our schedule to expand the offline market, and we hope to find new customers online,” Wu said.

The reason why foreign trade enterprises are eager to obtain orders is not only due to the sluggish performance of the offline market, but also the increasing operating cost. Enterprises need to improve sales performance and increase profits by obtaining new orders, according to Wu.

Wu noted the company’s biggest cost pressure comes from three aspects: firstly, the pressure of renminbi appreciation. For some time, the rising renminbi exchange rate has raised the cost of the company’s export products by nearly 8 percent.

The second problem is the rise in freight costs. Following the sharp rise in shipping cost last year, the cost rose again in April this year.

Thirdly, the price of raw materials also rose sharply. The price of iron and plastic per metric ton is now about 1,000 yuan ($153) higher than that at the beginning of last year, and the costs of painting and packaging are also rising rapidly.

Wu’s company is not the only one faced with such pressure.

Feng Tao, marketing director of Guangzhou Mona Lisa, said the company is also facing challenges such as rising human resource costs. In addition, due to friction in the foreign supply chain, it has become more difficult for the company to purchase raw materials.

Some enterprises complained that when trying to expand the market through online channels, they found the cost of e-commerce platforms even higher.

“We will seize the opportunity of the online Canton Fair this time and expand the market with more accurate research,” Wu said. “We will also provide customers with integrated resources and purchasing services and roll out various measures to resolve the pressure.”