Not an easy turn
Wang's company, which has wholesale and supermarket clients in Africa, South America, the Middle East, Southeast Asia, and Europe, is now turning to the Chinese market. He began to advertise products domestically and re-tailor them for Chinese consumers, all to fortify his business through the domestic market.
Wang Minfeng's tool store in Yiwu, Zhejiang province, on April 24, 2018. [Photo by Sun Tao/China.org.cn]
However, Wang said the development of new products usually takes a long time. For a company that had been entirely outfitted for businesses overseas, turning domestic is not an easy turn to make.
For some businesses in the Yiwu International Trade City, this difficulty may stop them from turning domestic altogether.
Liu Junming, who owns a sanitary ware business located in the complex, said although the company had started looking inward even before the outbreak, he had no plans to increase the size of domestic business from the current 12-13%. He explained that this kind of transition was not something that could be done in merely one or two months.
Instead, Liu is counting on new media and online platforms to help to increase sales. In March, the company began making moves that go with the digital trend, developing hundreds of short video clips that introduce the application of its products in government projects, hotels, and hospitals worldwide. The videos are customized for clients in various countries and promoted locally.
Liu said he has received many positive feedbacks on the company's multimedia promotion campaign. Though he could not link video viewership directly to orders placed, Liu said that more potential clients have gotten to know about his products this way, and that was exactly the effect his company intended to achieve.
"In the crisis lies opportunities," Liu said. He took the current trend that people go online and use mobile phones as a silver lining, and said that what companies should do is upgrading their ways of communication accordingly. Lately, Liu has been preparing for a new product launch through WhatsApp, which will be held soon.
Nevertheless, the company also faces a lack of demand like other businesses in Yiwu. Liu said that the total order value through mid-May registered only about 40% of what it was a year ago, and most of the orders have been small.
The decrease of demand also led to the decrease of the company's production resumption rate from 80% in late March and early April to 60% in May. Previously in February and March, his company saw the order value increase after effective communication in advance of the work resumption.
Seeing the pressure of cash flow on the companies, the Yiwu government had offered companies registered in the city a two-month interest exemption for loans already taken out, and a reduced interest rate for future loans. The trade hub also launched a policy to exempt the rent of the tenants for two months.
Liu said the policies did prove helpful, and that the two-month rent waiver theoretically can allow his company to run for 10 days. Despite so, he said companies should rely mainly on their own efforts.
Looking ahead
According to the latest data, China's foreign trade of goods inched down 0.7% year on year in April, narrowing from a drop of 6.4% in the first quarter, with exports rising 8.2% from the same period last year.
However, officials from China's Ministry of Commerce said days ago that foreign trade is still under considerable downward pressure despite improvement in April trade data.
UIBE's Hong suggested that the companies should have faith, be on alert for risks amid the global crisis, and get used to the new normal of dealing with the virus.
For small business owners like Wang, things seem to be looking up. Although little has changed on the accounting sheet as of mid-May, he has seen more inquiries recently, and that the delivery of his company's products to some countries previously on lockdown has resumed.
Wang said he believes that, by offering medical help and donations to many countries during the pandemic, China is allowing more peoples in the world to learn about the country, which would help to shore up trade after the pandemic is brought under control globally.
Now, Wang is looking forward to the online China Import and Export Fair in mid-June to bring him more business opportunities. Until then, he said he is encouraging himself and other SMEs with a notion also shared by experts, "Survive, and all will be well."
