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Domestic Down Sales Rising Under Financial Crisis

2008/12/6 13:48:00 21

The financial crisis is sweeping the globe, and many enterprises are crying out for cold.

However, in this unusual cold winter, some enterprises have discovered the business opportunities in winter, and it is a blessing in disguise.

"When the financial crisis brings social demand and consumption cuts, luxury and high-end products are cut first, but demand for essential goods and inexpensive products rises."

This is what the economist Fang Gang called "potato effect".

He said that economists found that during the Great Depression of last 30s, the price of potatoes increased, because people who used to eat bread would choose more potatoes to buy potatoes, which led to the business of selling potatoes, which was known as the "potato effect".

He believes that the "cheap Chinese made" is the beneficiary of this effect - China's advantage is low cost, and in the face of depression, the price and sales of low cost products will rise.

Therefore, he said, "China's economy is full of potential for growth, and now is the time to plan for the next round of growth."

"Our duvet is difficult to compete with many international brands when exporting to overseas markets. We know that our products are not inferior to them. But because brands are not as good as others, they can only compete for customers with high quality and low price.

But now the international market is becoming more and more popular for our cheap and affordable quilts, making our overseas orders not to rise in this financial crisis.

Xia Jiguo, chairman of Anhui Hongrun group, is in a good mood in this financial crisis. In his own words, it is the most gratifying thing for him to be a boss.

China is the world's largest exporter of down products, and 70% of the world's down products are produced in China.

In the face of the sudden global financial crisis, China's export of down products has also been subjected to severe tests.

The Hongrun group, which is led by Xia Ji Guo, is the largest Chinese feather and down producer. This is a typical "made in China" enterprise. Its production and export volume accounts for 24% of the national total.

What's more proud of Xia Ji Guo is that since the second half of this year, the Hongrun group, which originally relied on export orders, is facing a decline in orders from Europe and the United States. However, the total export volume of the company in the first 10 months has also increased by 12% over the same period last year.

In the foreign trade market of Hongrun group this year, the emerging markets such as the Middle East and South America have made great contributions.

It is understood that, in the case of reduced orders in Europe and the United States, Hongrun Group vigorously develops new markets this year. In maintaining strategic cooperation with the European and American markets, the export volume of the Middle East and South American markets has increased by more than 50% this year.

Moreover, as many similar small-scale export enterprises in coastal areas fail or reduce production, it brings opportunities to Hong Run's large-scale enterprises.

In order to integrate suppliers, some large overseas customers have generally given up those suppliers who are not strong enough and have great risks, and have actively found Hongrun cooperation to establish strategic alliances and jointly resist market risks.

At the same time, in the face of the reduction of orders in Europe and the United States, Hongrun group this year, when undertaking foreign trade orders, not only did it not lower the requirements to compete for orders, but became more "harsh".

In order to avoid trade risks, Hongrun group generally only accepts letters of credit or TT before the goods, and has a relatively large risk of trade. They will consult their clients' credit situation through China's export credit insurance, and get a certain credit limit protection, and then export them within the limits, which greatly avoids risks.

At the same time, in order to prevent exchange losses caused by exchange rate fluctuations, Hongrun group tried every means to shorten the time limit for signing the contract.

"In addition to overseas markets, the domestic market is the most potential" emerging market "for us.

Xia Jiguo, chairman of Hongrun group, is full of confidence.

This year, Hongrun group has placed the domestic market in the same place as the foreign trade market. At present, they have opened more than 100 stores in more than 20 provinces and cities nationwide, and sales increased by more than 5 times over the same period last year.

Xia Jiguo said that at present, the per capita popularity rate of the down quilt in Japan has reached 103%, and the United States has reached 87%, while the popularity rate of per capita eiderdown is only 5%, which is actually the market potential of Hongrun's future.