60 per­cent

China Daily (Hong Kong) - - BUSINESS | FOCUS -

of the global Christ­mas goods are sup­plied by Yiwu

Christ­mas is help­ing some Chi­nese com­pa­nies to have an ex­tended sales sea­son that has been start­ing on Nov 11 — Sin­gles Day on­line shop­ping fes­ti­val — for sev­eral years now.

What’s more, China-based mak­ers of dec­o­ra­tion items, which hith­erto re­lied on ex­ports, are find­ing new Christ­mas-time sales op­por­tu­ni­ties in the do­mes­tic mar­ket.

In fact, Yiwu Xiy­ing Trade Co Ltd has been at­tach­ing more im­por­tance to the do­mes­tic mar­ket than ex­ports in re­cent years, said Liu Peng, man­ager of its e-com­merce depart­ment.

That’s a rad­i­cal shift from the sit­u­a­tion five years ago, when 90 per­cent of the com­pany’s Christ­mas-re­lated prod­ucts were sold in over­seas mar­kets. Now, 50 per­cent of the prod­ucts — a 2.5-meter Christ­mas light chain (48 yuan or $6.90), a 1.5-meter Christ­mas tree (199 yuan), a wreath (65 yuan), a pine cone (4 yuan) and such — are sold in China.

There are sev­eral rea­sons as to why the do­mes­tic mar­ket has warmed to the Merry Christ­mas idea, which is es­sen­tially a West­ern modern cul­tural con­struct.

Com­mer­cial es­tab­lish­ments like malls, hy­per­marts, cin­e­mas and restau­rants ring in the fes­tive cheer by drap­ing them­selves with all sorts of China-made Christ­mas para­pher­na­lia, and by play­ing car­ols, songs and West­ern mu­sic in the back­ground.

That helps ex­tend the shop­ping sea­son into the New Year and boosts sales, in­clud­ing those of Christ­mas goods at the con­sumer level.

For Chi­nese con­sumers, es­pe­cially univer­sity stu­dents, sin­gle work­ing pro­fes­sion­als and young fam­i­lies with kids, Christ­mas is not a re­li­gious fes­ti­val but an op­por­tu­nity to brighten up homes dur­ing the smoggy, dull, bit­terly cold win­ter with bright, col­or­ful, mood-el­e­vat­ing things.

“There are quite some un­con­trol­lable risks con­cern­ing ex­ports. Al­though it was widely be­lieved that ex­ports will im­prove this year since the yuan has been de­pre­ci­at­ing, some other coun­tries are ex­pe­ri­enc­ing the same thing (lo­cal cur­rency de­pre­ci­a­tion) or even worse. We have lost one ma­jor or­der from an Egyp­tian client this year as the lo­cal cur­rency — the Egyp­tian pound — has been de­pre­ci­at­ing dras­ti­cally,” he said.

For in­stance, at the be­gin­ning of this year, the yuan traded at 6.50 to the US dol­lar while the Egyp­tian pound traded at 7.73. On Wed­nes­day, the yuan reached 6.95 while the Egyp­tian pound set­tled at 18.85.

Trade be­tween the Chi­nese com­pany and the Egyp­tian client is done in US dol­lars. That meant the Egyp­tian client would have had to pay $14,000 this year for the same goods it may have bought for $10,000 last year.

Last year, Yiwu Xiy­ing Trade Co’s sales revenue was 123,000 yuan ($17,690). This year, it ex­pects the figure to reach 150,000 yuan.

That rise will come de­spite clients from Europe and the United States still pre­fer­ring lower-priced tra­di­tional Christ­mas dec­o­ra­tions.

Among the ex­port mar­kets, only cus­tomers in South Korea lay stress on the cre­ativ­ity of China-made prod­ucts and are will­ing to pay more that as­sures prof­its for man­u­fac­tur­ers.

Ac­cord­ing to Liu, Chi­nese con­sumers are in­creas­ingly buy­ing prod­ucts with bet­ter qual­ity, even if they are costlier. Since ex­port items gen­er­ally tend to be bet­ter, the same prod­ucts are find­ing new buy­ers in the do­mes­tic mar­kets.

This is trans­lat­ing to higher prof­its for man­u­fac­tur­ers. Last year, Chi­nese man­u­fac­tur­ers sold Christ­mas dec­o­ra­tion items worth 3.6 bil­lion yuan, ac­cord­ing to the Na­tional Bureau of Statis­tics. The figure is 2.9 bil­lion yuan for the first 10 months of the year, down 15.9 per­cent year-onyear, but may rise by the yearend. Typ­i­cally, profit tends to be 10 per­cent of sales.

“In the do­mes­tic mar­ket, a lot of the or­ders are com­pleted on­line nowa­days. Since ma­jor on­line mar­ket­places such as Alibaba and JD.com are in­creas­ingly tight­en­ing prod­uct qual­ity con­trol, the prices of Christ­mas prod­ucts are higher this year,” said Liu.

Liu said Yiwu Xiy­ing Trade Co has been also re­ceiv­ing or­ders from re­tail out­lets such as depart­ment stores, su­per­mar­kets and dec­o­ra­tive stores in China, all of which are qual­ity-con­scious, which helps sus­tain higher prices.

Chen Jin­lin, sec­re­tary-gen­eral of the Yiwu Christ­mas Goods In­dus­try As­so­ci­a­tion, said the shift to high-qual­ity, higher-priced prod­ucts is a good omen for the in­dus­try.

Cus­toms statis­tics show that nearly 60 per­cent of the global Christ­mas goods come from Yiwu.

“The city has long been the largest Christ­mas goods pro­duc­tion base in the world. But the fact is, the prob­lem of prod­uct ho­mo­gene­ity is quite se­ri­ous in Yiwu. Only when we have bet­ter prod­ucts and well-known brands can the lo­cal com­pa­nies in­crease their bar­gain­ing power in the global mar­ket,” said Chen.


A sales­woman dis­plays Christ­mas goods at the small com­modi­ties mar­ket in Yiwu, Zhe­jiang prov­ince.

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