Sample of foreign trade industry under the attack of epidemic situation: orders continue to drop sharply, open source and reduce expenditure, and seek transformation.

Dong Zhang, who has been engaged in foreign trade for many years, has experienced an unprecedented crisis since she entered the foreign trade industry for more than ten years.

Dong Zhang's company is in Shenzhen, mainly engaged in the export trade of thermometers. In the past few years, it has been difficult to reach the top of the industry. However, it was hit hard by this global epidemic, and customer orders dropped sharply.

Wait for orders

Dong Zhang's company is mainly engaged in the sales and service of thermometer products. The thermometers it operates are used to measure the temperature and humidity of indoor and outdoor environments such as homes, offices, hotels, computer rooms, trunks, greenhouses and livestock farms, as well as refrigerators, ovens, microwave ovens, drying boxes and other equipment.

In recent years, companies in Dong Zhang are mainly engaged in foreign trade. "We have the advantage of manufacturing precipitation, we can quickly open the mold, plus sufficient raw materials and low production labor costs, so most European and American countries look for us to get the goods." Dong Zhang said that by firmly grasping these customers, the company has had a good life in recent years.

Since the first quarter of this year, despite the COVID-19 outbreak in China, it did not have much impact on companies in Dong Zhang at first. On the one hand, the company has some goods in stock, the express delivery can be normal, and there is no problem in temporarily returning to work for epidemic prevention; On the other hand, if overseas customers need it, the sales staff can contact them by email and telephone at any time. Therefore, employees of the company go to work early at home and come back to work early.

From the end of February to the middle of March, the situation turned sharply. At that time, the European and American epidemics continued to break out.

"Some new customers we talked about last year, the delivery details have been finalized, and some old customers have said that they want to return the order, and now they have basically stopped. Because there is no way now, the epidemic situation in most parts of Europe and America is still serious, and our products are not urgently needed medical and living materials, so they will be affected. " Dong Zhang said.

Recently, Dong Zhang continued to communicate with an old British customer, hoping that the other party could place an order as soon as possible, but at present, the other party's answer is "not sure". In the period of market stability, this British customer usually places an order on time in March and April every year, but so far this year, he has not waited for the news of his order.

"Compared with previous years, this year's situation is indeed worse, including customer interaction. In previous years, no matter whether the order volume was clinched or not, there were many inquiries from customers. Since March of this year, customers have come to consult orders for ten and a half months. " These signs indicate that the situation is not very good. Dong Zhang said.

It is not only Dong Zhang who is anxious, but also Li Jie.

Li Jie is the sales manager of a cosmetics foreign trade enterprise in Shenzhen. This company provides overseas customers with cosmetics such as eye shadow, lip gloss and lipstick through the manufacturing capabilities of its own factories and suppliers, mainly connecting with large chain cosmetics stores in Europe and America.

April and May are basically the peak season for Li Jie Company every year. Dealers in Europe and America often place orders in advance to provide products for Christmas in June+February, 5438. "We usually take orders in April and May, the factory completes them in July and August, and then delivers them. We will transport it on the road for a month or two and basically reach overseas customers before Christmas. "

But when it comes to this year's order business, Li Jie said that it can be described as "bleak". Li Jie's company is a large cosmetics foreign trade company in Shenzhen.

"Now affected by the epidemic, many cosmetics chain stores in Europe and America are forced to close down. Many people work at home, and people rarely need cosmetics. " Li Jie said that the epidemic in Europe and America had a great impact on the company. Since March, many overseas customers of the company have cancelled or reduced their orders, and some customers have delayed delivery.

"Good year, sales can reach $20 million. However, since March this year, sales have plummeted, and orders have dropped by one-third or even half year-on-year. " Li Jie said.

Upstream and downstream "attacks"

Recently, Dong Zhang received a "contact letter" from a downstream customer, who asked the company to lower the product price. "This is an obvious price reduction, but there is no way."

This is a letter from the supply department of a customer company in Guangdong. "Affected by the epidemic, the situation abroad is not optimistic. Customers all want to reduce the price to relieve the pressure. Also, based on the decline in raw material prices, please reduce the original unit price by 65,438+00% from next month. "

The main raw materials of thermometer products in Dong Zhang are hardware and related accessories. Since the first quarter of this year, the domestic steel industry has maintained a stable supply due to the decline in demand, and the steel market has exceeded demand, resulting in a downward trend in steel prices. "The other party learned that our raw steel price has dropped. In fact, our profits are relatively thin. " Dong Zhang said that compared with foreign customers, domestic customers know each other too well, so it is more difficult to do it.

In addition to the trouble of "price reduction" of downstream customers, the higher "advance payment" requirements of upstream customers are also met as much as possible.

"The psychology of the factory is understandable. During the epidemic, they were worried about the payment ability of our overseas customers. But once we pay the full amount, we are also worried that the other factory will not be able to complete the products with good quality and quantity. This has led to cracks in the trust between the two sides. " Dong Zhang said.

"Once the full amount is paid in advance, it will also be a test of our cash flow. Because according to the previous regulations, we generally don't accept the full payment from overseas customers, and only accept a part of the deposit at most. If it is an old customer, even the deposit is directly exempted, and the full amount is received at one time when the goods arrive. " Dong Zhang said.

Under the epidemic environment, the current OEM cost is high and the profit is thin. Only by taking large quantities can we earn back profits, while some foreign trade orders have fewer profit points. "It is difficult for us to return to our own capital, and it is really a bit unbearable to produce capital." Shark Wang said.

Some suppliers of foreign trade enterprises can only stop production and postpone their resumption of work at present because of small orders. Li Jie's foreign trade cosmetics company has its own production factory and some suppliers.

Open source and reduce transformation expenses

"We are still digesting the orders before the Spring Festival, but since April, the company has almost no (bigger) orders. If the epidemic continues, orders will not be received in May and June, and it is estimated that there is no way out. " Dong Zhang is very worried. Now the company has to accept some small orders for sesame seeds, but it is also difficult to support the daily expenses.

After the company resumed work in February this year, Dong Zhang and his colleagues discussed moving the office from Futian District, where Shenzhen Customs rent is relatively expensive, to a cheaper office building in Longhua District. "Now the capital chain can still be turned around, but there is no guarantee that there will be any problems with the funds after half a year, so it is imperative to save money and control costs."

"It turns out that our office space in Futian is 140 square meters, and the monthly rent is 1.5 million yuan. The office space rented now is 120 square meters, and the monthly rent is 5,000 yuan. " Dong Zhang said that the rent of 1 month in the past can now be paid for three months, so as to live in a remote "base" first.

In addition to reducing the cost of venue rental, corporate control has also become a major means of saving money for foreign trade enterprises. Dong Zhang said that the company originally planned to recruit people after the year, but now it has stopped the recruitment plan.

"This year's resumption of work is relatively late, and customers have not reserved the delivery date of products for too long. Under normal circumstances, it should be the busiest time after the Spring Festival. Companies generally recruit people, but they dare not recruit people this year, fearing that there will be no orders after recruiting employees. " Dong Zhang said, in fact, the company doesn't have any business now, and customers haven't completely returned to work. Some businesses have insufficient manpower, and they don't know what to do in the future.

Li Jie's company is also laying off employees. "Almost half of them have been laid off recently, mainly because there are too few orders to support so many people."

In fact, the foreign trade industry has long shown signs of "hard times", and the epidemic is only worse. Therefore, many enterprises have been preparing for defense.

As early as two years ago, Dong Zhang and his partners discussed this change. A year ago, in order to get rid of this costly and difficult-to-manage "burden", they stripped the manufacturing factory, but they still didn't expect to encounter this rare epidemic this year.

This situation forced Dong Zhang and others to start thinking about business expansion and transformation.

"We need to expand some product categories to change the single thermometer product category model in the past." Dong Zhang said that this is a major transformation direction of the company in the future.

In North America and Europe, where the climate is colder, the fireplace is a major feature of local families, and almost every household has a fireplace. Dong Zhang's thermometer is used in the fireplace. In addition, Dong Zhang has developed fireplace fans and other related products this year to provide more choices for overseas customers.

Li Jie also revealed that the company is currently launching a melt-blown cloth production line and trying to produce melt-blown cloth to cope with the popularity of the export industry of epidemic prevention products in the future.

(The interviewees mentioned in the article are all pseudonyms.)