CHRIST­MAS CHEER BE­COMES MORE EX­PEN­SIVE AS COSTS RISE

China Daily (Hong Kong) - - BUSINESS | FOCUS - By SHI JING

Con­sumers who are busy pre­par­ing their home for Christ­mas are sure to find that this year’s fes­tive dec­o­ra­tions are more ex­pen­sive than ex­pected.

Man­u­fac­tur­ers in Yiwu of Zhe­jiang prov­ince, known as the global hub of small com­modi­ties such as Christ­mas dec­o­ra­tions, said that the rising prices were in­evitable.

Luo Weit­ing, gen­eral man­ager of Yiwu Ku­pai Crafts Co Ltd, has been sell­ing Christ­mas dec­o­ra­tions for more than seven years. As the prices of raw ma­te­ri­als have sig­nif­i­cantly surged this year, they have had to raise the prod­uct prices ac­cord­ingly.

“The price of car­tons is up by 70 per­cent and that of plas­tic up by 50 per­cent. As the ad­min­is­tra­tive bod­ies are rais­ing their re­quire­ments on elec­tronic prod­uct qual­ity, the prod­ucts that are not ecofriendly, for ex­am­ple those that con­tain mer­cury, can­not be put into use now,” he said.

“So the cost of elec­tronic parts has gone up by 80 per­cent. Even though we have raised our prices, the profit mar­gin is now much lower than pre­vi­ous years, which is less than 10 per­cent,” he said.

Even though the profit mar­gin is less lu­cra­tive, the com­pany prof­its have not been im­paired, mostly be­cause re­tail or­ders have in­creased quite sig­nif­i­cantly this year, thanks to the pro­lif­er­a­tion of in­ter­net and on­line shop­ping, Luo said.

“There is an in­creas­ingly no­tice­able trend in the Christ­mas dec­o­ra­tions in­dus­try: large whole­sale or­ders are fall­ing while re­tail or­ders have grown. As we mainly tar­get the mid-level mar­ket, where the price war does not ex­ist, con­sumers are less sen­si­tive to price fluc­tu­a­tions. That means, our profit can be sus­tained,” he said.

Most of the or­ders at this time of the year come from the do­mes­tic mar­ket and neigh­bor­ing coun­tries and re­gions such as Ja­pan, South Korea and South­east Asia, said Luo. Since the hol­i­day is round the cor­ner, prices will be rel­a­tively higher, which means prof­its would likely be higher. The whole­sale or­ders to Europe and the United States of­fered at lower prices are com­pleted dur­ing the sum­mer ev­ery year.

“Al­though the yuan has been de­pre­ci­at­ing since the be­gin­ning of this year, our ex­port or­ders have not been stim­u­lated. Christ­mas dec­o­ra­tion prod­ucts are quite cheap in gen­eral com­pared to other prod­ucts,” he said.

“What’s more, Christ­mas is a very im­por­tant fes­ti­val in the West and peo­ple need dec­o­ra­tions to cel­e­brate ev­ery year. It is a kind of rigid de­mand. So, over­seas buy­ers are not eas­ily af­fected by the ups and downs in for­eign ex­change,” he said.

Christ­mas goods’

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