Why Are Domestic Consumer Goods Not Favored?

Chinese consumers overseas

The heat is higher than a year in a year.

In recent years, with the escalation of consumer demand, with the increasing supply and demand conflicts, the wide spread of prices and the appreciation of the renminbi, Chinese consumers have launched a wave of buying abroad.

In 2005~2014 years, the average annual growth rate of overseas consumption is 25.2%.

A large number of high-end consumption flows overseas, from cold medicine to

The market share of Chinese enterprises and brands has been greatly squeezed, and it also has a serious negative effect on the upgrading of domestic consumption.

Why do Chinese people like to make "walking wallet" abroad? What causes them to think that the quality of domestic consumer goods is not high, innovation is not enough, and prices are expensive?

Li Wei, director and researcher of the Department of industrial economics research, Department of economics, Shanghai Academy of Social Sciences, told reporters that before the consumption market was large, the consumption levels were high, the big road goods could also be sold, and it could also make money, which led to the lack of motivation for domestic enterprises.

The solution will not be a smooth road.

"The upgrading of any enterprise is compelled by market competition pressure, and the growth space must be made by enterprises themselves in the competition."

Li Wei said.

Overseas shopping

Paris, France, Berlin, Japan, Tokyo...

In the metropolis of other countries

In the supermarket and in the supermarket, Chinese tourists everywhere can sweep goods in big bags and small packages, to luxury items such as name bags, watches and so on, and go to the daily necessities such as milk powder and thermos cups.

Many shop signs in Tokyo are Chinese, shopping guide and Chinese, while many Korean companies, especially cosmetics company bosses, send money to send staff to learn Chinese so as to better serve Chinese customers.

According to the Ministry of commerce data, overseas consumption of Chinese tourists has reached 1 trillion and 82 billion 900 million yuan in 2014, accounting for more than 10% of the global consumer market share, ranking three in the world for the first time in a row.

In the past 2005~2014 years, the average annual growth rate of overseas consumption in China is 25.2%, which is 2 times the growth rate of total domestic consumption in the same period.

In 2015, the number of outbound people in China reached 120 million, and overseas consumption, including travel, accommodation and shopping expenses, amounted to 1 trillion and 500 billion yuan, of which at least 700 billion to 800 billion yuan were used for shopping.

According to the estimation of operating income of more than 20 thousand brands in the brand database, the Chinese Academy of consumer goods Research Institute found that in 2015, the global luxury consumption of Chinese consumers reached US $116 billion 800 million, and Chinese people bought 46% of the world's luxury goods all year round.

Among them, 91 billion US dollars (about 608 billion 600 million yuan) took place overseas, accounting for 78% of the total.

As a big consumer, consumer and exporter of consumer goods, why is there such a serious consumption outflow?

At present, China's production of consumer goods, household appliances, shoes, cotton spinning, chemical fiber, clothing and other capacity accounted for more than 50% of the world's total, light industry and textile exports account for more than 30% of the world's total.

In light industry, home appliances, leather, plastics, food, furniture, hardware, ceramics and other industries, the output of over 100 kinds of products ranks first in the world.

Feng Fei, Vice Minister of the Ministry of industry and information technology, said in early June that with the intensification of international competition and the weakening of cost advantage, the structural contradictions of China's consumer goods industry, such as large scale and insufficient effective supply, strong manufacturing capacity and insufficient innovation ability, were highlighted.

On the consumer side, with the improvement of the income level, the consumption of our residents is changing from the clothing and food oriented subsistence and the subsistence oriented consumption to the enjoyable and well off consumption of the living and acting representatives, changing from the imitation wave style extensive consumption to the personalized and diversified fine consumption, and the consumers' requirements for the color, variety, quality, specification, brand and safety of the consumer goods are constantly improving.

Li Wei believes that the consumption demand of Chinese consumers has escalated. However, our production supply structure is still a way of production of such a primary product such as scale expansion. Supply and demand are seriously out of step. The upsurge of Chinese consumers' overseas purchase is also exposing the problems of consumer goods manufacturing in China.

When the Minister of Commerce Gao Hucheng talked about the phenomenon of consumption outflow during the two sessions of the National People's Congress in March, the price difference was also one of the main reasons.

Data show that the average price difference between domestic and international liquor products is as high as 64%, the highest price difference is 85%, the average price difference of wrist watches is 33%, and the highest price difference is 83%.

Chinese consumers often buy clothing, perfume, bags, cosmetics and leather shoes, and the spreads are below 30%.

Gao Hucheng believes that the formation of this disparity is mainly based on three reasons.

First, in terms of taxes and fees, China has a relatively high tax rate, especially the consumption tax on certain products.

Two, the domestic circulation costs are too high and the links are excessive. There is still room for further reducing logistics and management costs in the market.

The three is the pricing policy of foreign brands to China.

Insiders pointed out that in the Chinese market, tariffs account for up to 5% of the final retail price of luxury goods. Brand based market price regulation is the most important factor in the high price of luxury goods in China, and this regulation is based on the purchasing power of consumers in different markets.

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The Chinese market is large and the purchasing power is great. The price of the Chinese market is higher than that of other countries.

In contrast, luxury tariffs in India are very high, but prices are very low, and some of them are even lower than those in the European market.

In addition, in recent years, the devaluation of the euro, yen, Australian dollar and other currencies has cut the cost of overseas travel a great deal, which has caused a great difference between the price of the same commodity and China's domestic price, thereby stimulating Chinese tourists to go abroad to buy.

What's wrong with China's consumer goods?

Wu Fan, general manager of Guangdong Bosi Clothing Industrial Co., Ltd., told reporters that the differences between the prices of consumer goods at home and abroad, the difference in manufacturing standards between domestic and foreign manufacturers, the differences in taxes, and the differences in services are all microscopic phenomena.

From a macro perspective, compared with the European and American markets, it is mainly the difference between the mature commercial market and the developing commercial market.

The consumer's idea is very simple, where things are good, where everything is cheap and good.

The issue of the difference in manufacturing standards between domestic and overseas products has always been a worry for Chinese consumers.

Yuan Jun, founder of golden bell Bole Trading Co., Ltd. (hereinafter referred to as "Golden Bell"), told reporters that China's food standards are different from foreign countries, such as preservatives, and cassia seed and tomato leaf, which are diarrhea components, which are allowed to be added in Chinese food, but are prohibited in foreign countries.

According to the survey report on consumer awareness of health food released recently by the Chinese Consumers Association, about 70% consumers are not satisfied with the overall evaluation of the domestic health food market, while 40.98% consumers prefer foreign health foods.

In contrast, domestic health food recognition is low.

At the national quality supervision, inspection and quarantine work conference held earlier this year, Zhi Shuping, director general of the General Administration of quality supervision and inspection, said that China will speed up the integration of quality and safety standards for domestic consumer goods with international standards or export standards.

China's quality inspection system will focus on improving the quality of consumer goods, highlighting ten consumer products, such as air purifiers, rice cookers, smart toilet covers, smart phones, children's diapers, children's toys, infant and young children's clothing, kitchenware, bedding, furniture and so on. We should use all kinds of quality inspection methods to implement the quality improvement project of consumer goods, and promote internal and external sales products "same line with the same quality", forcing the technological progress of enterprises.

Once the Chinese consumers went to Japan, "toilet one" toilet lid has been proved to be produced in Xiasha, Hangzhou.

However, Li Wei told reporters that even if the same Japanese enterprise in China's foundries, the toilet lid they supplied to Japan and the toilet cover sold in the Chinese market will be different in terms of standards and processes. The toilet lid provided to the Chinese market will save some processes and processes in production, so that its cost will be reduced.

"Big road products" (that is, simple, large scale, low quality products) can also be sold and can make money. China has such a large consumer market. If companies want me to invest in high-end products, how much can they increase their profits? Li Wei said that the technical problems can be solved well and Chinese people can do everything rigorously, but now many domestic enterprises are unwilling to do so.

"The key is to make a brand or to do business."

Zheng Fazheng, director of marketing department of the good boy group, told reporters that if you are a brand, you need to maintain a whole range of channels in terms of research and development, technology, patents, talents and terminal construction, marketing, user relationship and so on.

Many enterprises in China may have only made one of them. Most enterprises are not yet in the system. "So many companies, you don't think this is a Brand Company, but a company selling certain products."

Zheng Fazheng said that brand is the biggest supply side.

The brand is ready, and everything you can change.

You have technology, patents, talents, R & D input, and you will always win. This is the logic of any company in the world.

Wu Fan believes that the traditional mode of production has led to greater burden on Chinese enterprises, and the cost of circulation is also very high.

China is a developing commercial market. Its management is not standardized and its system is not perfect, including monitoring.

If these conditions go up, the quality will not be bad according to China's manufacturing capacity and potential.

Yuan Jun also told reporters that according to his understanding of the enzyme industry, some merchants in order to make huge profits, imported enzymes from abroad to be packed in China, often converted a bottle of raw enzyme into 10 bottles or 20 bottles.

"The chaos in China's consumer goods industry does exist."

Shao Shilin, founder of Queensland bole, told reporters that for example, many cosmetics are done in Guangdong. The OEM factory in Guangdong also OEM many brands, including brands on all kinds of tall buildings, Chinese Hongkong and French brands, but all use the same formula.

Generally speaking, formal enterprises should have various kinds of certificates. If there are any problems in the products, they should be held responsible by the legal person. Instead, they are "three no products" and easy to escape.

This is the reason why some "three no products" enterprises are engaged in a certain scale.

Insiders told reporters that the illegal cost of producing consumer goods in China is relatively low, which is also a very important reason why many fake and shoddy product enterprises dare to take risks.

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Trust crisis and lack of creativity

It is precisely the many quality problems existing in China's consumption that lead to the trust crisis of Chinese consumers on the quality of domestic products.

Shao Shilin told reporters, like rhinitis spray products, a lot of people think that Japanese products in the treatment of allergic rhinitis better than domestic.

In fact, in the packaging of products, there are hormones in Japanese, but because most Chinese do not understand Japanese, they feel that foreign medicine is better than ours, even if the hormone is safer than domestic.

In fact, in Japan, it is also a commodity sold in convenience stores, and the effect is not so amazing as we all imagine.

Shanghai Wo Feng garment accessories factory provides garment accessories for some famous fast fashion brands at home and abroad for ZARA, H&M, mus and bang Wei.

Zhou Chengjie, general manager of the plant, also said that many times consumers are still willing to choose something from H&M or ZARA. In fact, these foreign brands require their indicators, such as color fastness, formaldehyde and so on, which are similar to some fast fashion brands in China.

"Every shipment needs to be sent to the third party for testing before it is shipped on our side. After shipment, we can deliver the goods.

The result of the third party test is not what we can control. We can't afford to fake it, and there is no need to cheat because our product quality can meet this requirement.

Besides quality, another important reason why foreign brands attract Chinese consumers is their creativity.

Wu Fan believes that ZARA, UNIQLO and other fast fashion brands can do well in China, and mainly because they have defeated many traditional enterprises in the production and operation mode.

"From the design, production to listing, the time between them is very tight, and their overall response to the market is faster than ours, and the cycle of reaction is shorter than ours."

There are various reasons. First, like ZARA, there are over 600 designers who collect information on various fashion shows around the world, and their fashion sense is faster.

The two is its vertical supply chain system, which can quickly control production and order, and have a better strategic cooperation factory, so that it can carry out a precise production control and achieve control from quality to production cycle.

They can quickly adjust production according to the market reaction and reduce many invalid stocks, that is, firmly grasp the source of retail, and push backward production development.

Comparatively speaking, many domestic high-end clothing brands basically rely on the processing system of factory OEM or ODM (Note: all OEM mode), and brands can not control the production line and are in a relatively weak purchasing relationship.

"If we order less than 2000, we will not be able to place the order."

Wu Fan told reporters that Chinese traditional enterprises first produce and then push to the market.

For example, they made men's clothing and began to feed their products in the next year in August. They will be listed again in three or four months.

But now people's consumption concept is changing faster and more fragmented. After three or four months, it is likely that the consumption concept and aesthetic trend of the whole market have completely changed, and what is produced may not be listed yet.

We must truly play the market competition mechanism.

Although domestic consumption growth has slowed down, Chinese consumers' confidence and consumer market are still growing as the income level of Chinese residents increases and the lifestyle of young middle class changes. Meanwhile, consumption structure is changing.

The annual consumer market survey of emerging markets released by Credit Suisse Group in April showed that China's consumer market will continue to expand.

In 2015, Chinese consumers grew by 12% over the same period of cosmetic consumption, and the number of Internet users increased by 11% over the same period last year. The growth of consumption of smartphones and dairy products reached 6 percentage points.

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Compared to 2015, the group with a monthly income of 5500 yuan ~7500 yuan and a monthly income of more than 15 thousand yuan had more confidence in the growth of 2016's income.

Young consumers under the age of 30 predict that household income will increase by 4.7% in the coming year.

The latest survey results released by Boston consulting company in June also show that 75% of Chinese consumers will maintain or raise their consumption level in 2016.

Facing the continuous expansion and upgrading of China's consumer market, how to solve the problem of consumption outflow has become a serious problem.

"To solve the problem of consumption outflow, we should start from two aspects of supply and demand."

Zhou Ting, President of the Institute of quality and wealth research, said that the quality supervision and technology level should be improved in terms of supply. In terms of demand, we should promote the reduction and exemption of taxes and fees in domestic commercial circulation enterprises, and reduce the direct and indirect tax burden in circulation so as to reduce the terminal price.

Since January 1st this year, China has adjusted import and export tariffs on some products.

The tariff reduction of daily consumer goods mainly includes clothing, shoes, kitchenware, skin care products, medical supplies, nuts, infant milk powder and other categories. Among them, the tariff reduction rate is over 10 percentage points, and the tax rate of skin care products, diapers and other commodities is reduced to 2% directly.

At the beginning of this year, Feng Fei, Vice Minister of the Ministry of industry and commerce, stated that the Ministry of industry and Commerce will work hard in terms of supply structure, consumption environment and purchase convenience to promote overseas consumption reflow.

He said that promoting the return of overseas consumption should further purify the domestic consumption environment, crack down on counterfeit and shoddy products, so that consumers can rest assured that consumption. At the same time, considering some domestic and foreign standards docking, some products will adopt international standards.

Feng Fei also suggested that we should facilitate the purchase of international products for the domestic people, such as reducing the import tax and consumption tax of some products, narrowing the difference between home and abroad, and building more duty-free shops. At the same time, we should introduce tax-free systems to foreign tourists, so that overseas tourists can spend more in China.

In view of the fact that the illegal cost of these Chinese consumer goods producers is relatively low and whether legal constraints should be increased, Li Wei said that the legal constraints in China's economic field need to be taken into consideration correctly.

Foreign counterfeit and shoddy products are few, not because foreign countries are more vulnerable to fake and shoddy products than China.

From the perspective of the whole process of economic development, the more we try to strengthen the crackdown on fake and shoddy products through legal and administrative means, the more we will provide opportunities for the existence of fake and shoddy products.

Because if judging whether the product is fake or fake products, the law enforcement department has the final say, then some enterprises may turn their fake and shoddy products into qualified products by rent-seeking.

Therefore, we should carefully treat the interference of administrative means in the economic field, which has a negative effect.

Li Wei believes that the restraint of the law on fake and shoddy products can be regarded as a monitoring mechanism. The most fundamental need is to form a market elimination mechanism and eliminate the counterfeit and shoddy products through adequate market competition. The more intense the market competition, the smaller the space for the existence of fake and shoddy products.

The key is to establish an information disclosure system for consumer goods, so that consumers can have more knowledge about consumer goods information, and then make purchase choices on this basis.

Li Wei stressed that we must believe that the power of consumers and markets is enough to solve some problems in the operation of the market, and we need to change the concept of "market intervention and government intervention".

At the end of 2015, the general office of the State Council issued the opinions on accelerating the construction of traceability system for important products. The construction of traceability system is an effective measure to collect and record information on production, circulation and consumption of products, so as to realize the source, whereabouts can be traced, responsibilities can be investigated, and strengthen the whole process of quality safety management and risk control, so as to enhance the awareness of the production and operation enterprises of important products such as edible agricultural products, food, medicine, agricultural means of production, special equipment, dangerous goods and rare earth products.

In terms of market competition, Li Wei believes that a problem is that the government is worried about the huge impact of local enterprises on the protection of low-end product enterprises, whether it is product information disclosure or tariff reduction, which is unfavorable for the long-term development of Chinese enterprises.

Perhaps the original intention of governments at all levels is to set aside time and space for development of domestic brands, so that they can have profit margins to make technological innovations and enable them to grow.

This way of closing doors and expecting enterprises to upgrade themselves is not effective, because the upgrading of any enterprise is compelled by market competition pressure, and the growth space must be made by enterprises themselves in the competition.

Like China's automobile, color TV, fridge and other industries, at the beginning, a large number of foreign brands entered and pushed our local brands to develop gradually.

Li Wei also said that the pformation and upgrading of enterprises through competition is a leading factor. Of course, the government needs to make the whole process more stable. For example, in terms of tariff reduction, there must be structural changes, not a sudden drop, but a gradual reduction, while other factors are also considered.