Elec­tron­ics mar­ket in Shen­zhen strug­gles to cope with e-on­slaught

China Daily (Hong Kong) - - BUSINESS - By CHAI HUA in Shen­zhen grace@chi­nadai­lyhk.com

The Huaqiang North Elec­tronic Mar­ket in Shen­zhen used to be bustling but now coun­ters are gath­er­ing dust and stores are shut­tered with rolling doors.

Even the open­ing of Shen­zhen’s new Metro Line 7, in Oc­to­ber, failed to bring the area back to life, though it of­fers greater ac­cess to Huaqiang­bei from all parts of the city.

Ten­ants have been forced to close their busi­nesses due to slump­ing prof­its.

Ac­cord­ing to re­search by Shen­zhen Univer­sity, 40 per­cent of 238 sell­ers in­ter­viewed said they earned zero prof­its in 2015 and 39 per­cent had a profit of 100,000 to 200,000 yuan ($14,500-$29,000).

An over­whelm­ing ma­jor­ity, 88 per­cent said their prof­its de­clined com­pared to a year ear­lier and they could barely make rent pay­ments, which in fact are de­creas­ing this year.

Shen­zhen Evening News re­ports the rent at SEG Elec­tron­ics Mar­ket, one of the most pop­u­lar mar­kets in the dis­trict, has de­creased four times in the first seven months of this year.

Yuan Yim­ing, deputy di­rec­tor of the China Cen­ter for Spe­cial Eco­nomic Zone Re­search, Shen­zhen Univer­sity, says one of the main rea­sons for the de­cline in Huaqiang North mar­kets is the cur­rent up­grad­ing.

“Dur­ing the trans­for­ma­tion, pain is in­evitable,” he said.

Shanzhai (imi­ta­tion and trade­mark in­fringe­ment brands and goods) used to be com­mon in Huaqiang North, but since last year the lo­cal gov­ern­ment has been crack­ing them down and car­ry­ing out con­stant in­spec­tions, lead­ing to the clo­sure of many stores.

“Any prod­uct with a logo has to be ex­am­ined,” said a ven­dor sur-

Dur­ing the trans­for­ma­tion, pain is in­evitable.” Yuan Yim­ing, deputy di­rec­tor of the China Cen­ter for Spe­cial Eco­nomic Zone Re­search, Shen­zhen Univer­sity

named Chen at an elec­tron­ics store in the dis­trict, adding that the lat­est in­spec­tions just two months ago were the strictest yet.

Elec­tron­ics com­po­nents are a ma­jor as­pect of the mar­ket, but the rapid de­vel­op­ment of in­ter­net and e-com­merce has eaten into prof­its of small dis­trib­u­tors.

Zeng Long, in­vest­ment man­ager of the Huaqiang North In­ter­na­tional Maker Cen­ter, said the rapid de­vel­op­ment of in­ter­net-based phone, tele­vi­sion and other elec­tronic brands has sub­stan­tially squeezed prof­its of up­stream com­po­nent sup­pli­ers.

Many small and mi­cro-sized dis­trib­u­tors in Huaqiang North mar­ket de­pend on these sup­pli­ers, he added.

Some sell­ers and dis­trib­u­tors choose to adapt to mar­ket trends and up­grade through in­no­va­tion. Tak­ing Zeng’s Maker Cen­ter as an ex­am­ple, smart­phone and elec­tron­ics com­po­nent sell­ers come here to cre­ate their own prod­ucts and brands.

Yuan from Shen­zhen Univer­sity said Huaqiang North dis­trict is also the epit­ome of in­dus­trial up­grad­ing in the Pearl River Delta area.

He sug­gested the area in­te­grate with the Pearl River Delta’s in­dus­trial up­grad­ing to high-tech, high added-value and high-end man­u­fac­tur­ing.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.