Extraordinary moment of foreign trade: Yiwu cross-border e-commerce presses the pause button to strengthen unemployment forecast in Dongguan

Extraordinary moment of foreign trade: Yiwu cross-border e-commerce presses the pause button to strengthen unemployment forecast in Dongguan
Zhao Peng’s company caught up in the first half and second half of the epidemic.During the domestic epidemic, many factories affiliated to Zhao Peng, a large apparel manufacturer in Yiwu, were closed, and the turnover of several offline stores was almost zero.When the domestic production and sales side gradually recovered, overseas epidemics began to explode, and offline stores in Europe and the United States closed.As a Chinese supplier of high-profile sports brand offline stores in Europe and America and a large-scale large supermarket, Zhao Peng was cancelled all orders after the end of April.Also in Yiwu, due to the closure of Amazon and poor logistics, the cross-border e-commerce merchant group in Yiwu was pressed the pause button.In Dongguan, the demand in Europe and the United States, which accounts for nearly 40% of Dongguan ‘s exports, has fallen sharply. Some foreign trade enterprise bosses have “run away”. Some enterprises have suspended production lines or recruitment plans. The Dongguan Human Resources and Social Security Bureau is strengthening unemployment monitoring and unemployment warning.In essence, due to the lack of production capacity in the factory production line, some foreign trade companies have to give up overseas orders.The epidemic is spreading all over the world, and China’s foreign trade has reached a critical moment?Experts said that the trend of rapid reduction in external demand will not be reversed in the short term. In the future, a large number of enterprises will save themselves through layoffs and other means. The focus of government policies should be turned to help enterprises stabilize employment.A business owner in Yiwu suggested that the policy of bailing out foreign trade enterprises should not “sprinkle pepper noodles” and must be precise.”The epidemic caught up in the first half and the second half, and all orders were cancelled after the end of April.” The company has not completely recovered from the impact of the domestic epidemic. Zhao Peng (pseudonym) ‘s company was hit by the overseas epidemic again.Zhao Peng is a large apparel manufacturer in Yiwu. During the domestic epidemic, the continuous factories of his company were shut down, and the turnover of dozens of offline stores was almost zero.Obviously, the company still has to pay over ten million yuan a month.”Every month, we have to pay the basic salary of more than 2,000 employees, we also have to pay back the bank interest, and there are some other basic expenses.”Zhao Peng said.Since mid-February, after experiencing the improvement of domestic epidemic prevention and control measures, Zhao Peng’s company began the long-awaited resumption of work, although this process was slow-first, the Yiwu Municipal Government set up nearly 40 resumption work groups to go toHelping the company’s employees to return to the factory across the country, while actively helping the company to connect with financial institutions, reduce the credit rate and score during the epidemic.Then the company overcame the problem of poor industrial chain, and the production line finally recovered gradually.In essence, the company’s offline stores opened one after another, selling high-end underwear and other products produced by the company.The domestic epidemic prevention and control has not been completely lifted, and the sales of domestic offline stores have even improved significantly.”March was originally the best month for the company’s domestic sales in a year, especially on Women’s Day, which was around 12 million a day in the company in previous years.However, this year’s Women’s Day budget was only 2.15 million yuan, and the sales of more than 1 million yuan were still recommended by shop guides to regular customers through WeChat and other methods.In other words, the actual budget of direct stores is only more than 1 million yuan, which is one-tenth of this kind in previous years.”Zhao Peng said.Zhao Peng thought that after the improvement of domestic epidemic prevention and control, the difficult days will soon be over.”Our original judgment was that the three-month overlap period of the company is about to pass, and the domestic market can be restored in two months, and the inflection point of the company’s production and sales is about to come.”” However, the large-scale outbreak of the overseas epidemic exceeded Zhao Peng’s expectations.Around mid-March, through the severe situation of European and American epidemics, Adidas, Nike and other well-known sportswear brands announced the closure of permanent stores in Europe and America.According to a recent report by Bloomberg, the US retail industry closed more than 47,000 stores within a week, and at least 90 national retailers were temporarily in a state of substitution.In the tide of closing stores overseas, Chinese suppliers outside Wanli also realized the shock wave of the epidemic.As adidas, Puma, Decathlon and other well-known overseas suppliers of sportswear offline stores, Zhao Peng’s products are sold to more than 20 countries in Europe and America.In addition, the company also supplies Costco, Lidl, KIK and other large supermarkets in Europe and America.”The large-scale supermarkets that we supply to the European and American offline sports apparel stores are basically closed.”Being never fully affected by the domestic epidemic situation, Zhao Peng began to receive information from overseas customers cancelling orders.”Except for the April orders currently being produced by the factory, as long as it has been placed, there are no production orders, or orders prepared by the customer, all are cancelled.”These cancelled orders are basically autumn and winter orders, accounting for 70% of the company’s export orders.It can be said that the company basically has no orders after April.”Before being interviewed by Sauna Night on March 24, Zhao Peng had just received a call from a customer from the United States, and the other party requested that orders under production also be stopped.”Our company’s domestic and foreign business accounts for half of each. We caught up in the first half and second half of the epidemic.Looking now, the company expects to exceed 50 million in the first quarter.”Zhao Peng said.The cancellation of foreign trade orders is a common advantage of the textile industry recently.Zhao Peng ‘s company also supplies raw materials to dozens of garment factories. He has recently begun to receive calls from downstream factories to stop supplying, “because these garment factories have recently received notices of refunds from European and American markets.Zhao Peng estimates that it will take 4 to 5 months for the European and American epidemic to be effectively controlled.”Of the garment factories that focus on foreign trade, 80% of the enterprises will last up to the end of April.It is estimated that too many companies will start production suspension or layoffs in April.”Yiwu’s cross-border e-commerce that was pressed the pause button is not only a Chinese supplier of offline stores in Europe and the United States. Chinese suppliers in the European and American online retail market are also clearly aware of the impact of overseas epidemics.On March 17th, Chinese sellers received an email notification from Amazon that “FBA non-essential merchandise stopped storage.”The email stated that in order to alleviate the surplus of necessities, medical supplies and other items, from March 17 to April 5, the FBA warehouse at Amazon’s European and American sites (reporter’s note: Amazon’s warehouse provided to sellers) gave priority to receiving necessities and medical careSupplies, non-essentials or medical supplies cannot currently be sent to FBA warehouses.According to a study released by Marketplace Pulse in June 2019, 40% of Amazon’s best-selling products come from China. This Amazon post on the warehouse email caused a stir in the WeChat group of Chinese sellers.”This Amazon rule means that non-essential necessities or anti-epidemic materials will not be sold by sellers, which means that we have been temporarily pressed on the retail channel in Amazon in Europe and America.”Sun Yong (pseudonym) is a member of the Yiwu Cross-border E-Commerce Association and the head of a cross-border e-commerce company in Yiwu.His company mainly sells apparel, hats, shoes and other daily necessities to the European and American markets through Amazon, eBay and the company’s website, with an annual turnover of about 500 million.Among them, Amazon’s sales volume surrounded 60% of the company’s orders.Before the Amazon retail channel was suspended, Yiwu’s cross-border e-commerce, including Sun Yong, had been swimming in the logistics system.At the time of the spread of the domestic epidemic, Europe and the United States reduced or suspended routes to and from China.With the accelerated epidemic in many countries around the world, many countries and some cities have adopted sealed cities and even banned foreigners from entering the country, and flights from China, Europe and the United States have repeatedly decreased.According to the forthcoming news from the Civil Aviation Administration of China, from March 29, each domestic airline can only keep 1 flight to any country, and each route can not operate more than 1 flight per week; each foreign airline operatesThe highest airline can only keep one, and the weekly operating frequency should not exceed one.”After the pause button was clicked on Amazon ‘s sales channel, European and American customers even placed the following orders on eBay and our own website, but most of the flights from China to Europe and America are now grounded. There are still two flights in the first day, graduallyReduced to only one shift a day, and then may only send one shift a week.”Sun Yong said that European and American customers generally require Chinese packages to arrive within 15 hours, fewer replacement flights, packages cannot be delivered on time, and a large number of orders are cancelled.”Some parcels can even be sent out, and logistics costs have risen a lot. The parcels sold are losing money.”The problem that still appears is that our parcels have reached Europe and the United States, and no one has delivered them there.”Sun Yong checks the company’s sales performance report every day,” the sales data is going down every day, and the order volume drops by 50% to 60%.”In Yiwu, there are not a few cross-border e-commerce companies that are facing the same breakthrough as Sun Yong.As a “world supermarket”, relying on the famous Yiwu Small Commodity City, Yiwu has trade relations with more than 200 countries and regions around the world.Extremely, the Yiwu Municipal Government has vigorously promoted the development of cross-border e-commerce.At the end of 2018, Yiwu’s foreign trade online merchant accounts exceeded 140,000, and the density of foreign trade online merchants ranked second in the country, with more than 8 million parcels sent from Yiwu to all parts of the world every day.In January 2019, Yiwu officially opened the comprehensive construction of a cross-border e-commerce comprehensive trial area, and the city achieved a total of 2768 e-commerce transactions that year.9.2 billion yuan.Among them, the cross-border e-commerce transaction volume was 753.9.8 billion, an annual increase of 15.16%.”The European and American markets are an important market for cross-border e-commerce in Yiwu. Many cross-border e-commerce in Yiwu are facing the same situation as our company.It is estimated that more than 80% of Yiwu ‘s cross-border e-commerce can only keep a small number of orders, and the order volume will drop by 2/3, which will be difficult in the next few months.”Sun Yong said.According to the data of the Yiwu Municipal Government in 2018, according to the transaction volume, the Yiwu e-commerce industry provided 90,000 direct jobs and generated more than 180,000 indirect jobs.Affected by the decrease in international orders, some cross-border e-commerce companies in Yiwu began to implement a rotation system.”The employees of our company basically take three days off and four days off, or say one day off.Mr. Xu, the owner of a cross-border e-commerce enterprise in Yiwu said.Dongguan, which accounts for 40% of European and American exports: Strengthen unemployment monitoring and unemployment forecast In Dongguan, more than 1,000 kilometers away from Yiwu, an emergency plan for employee diversion employment has been formulated to strengthen unemployment monitoring and unemployment warning.According to the data provided by the Dongguan Municipal Bureau of Commerce to Sauna Night, Dongguan ‘s export scale ranks fourth among major cities in the country, accounting for 5% of the country and 19.5% of the province.9%.Among them, the United States and the European Union are Dongguan’s top three important trading partners, accounting for 19 exports to the United States in 2019.5%, exports to the EU accounted for 18.7%.Affected by the epidemic in Europe and the United States, which affected nearly 40% of Dongguan ‘s exports, some foreign trade enterprises in Dongguan temporarily closed their business or recruited workers.Recently, the “running road” of the Panduit toy boss has attracted attention.According to an announcement issued by the Dongguan Chashan Town People’s Social Bureau on March 23, Panduit Toys is a Hong Kong-funded enterprise and was established in 1992.Affected by transnational crimes, the cancellation of Panduit Toys ‘foreign trade orders led to a sudden decrease in the company ‘s business volume, a break in the capital chain, the inability to maintain normal operations, announcement of closure, and arrears in employee salaries.In response to the loss of corporate legal persons, the People ‘s and Social Affairs Bureau immediately announced the announcement of escaping salary arrears in the company ‘s factory area.Following the city’s relevant policies, the factory renter will advance the wages of the company’s employees.Some foreign trade enterprises have suspended production lines and recruitment plans.Mr. Lin, a businessman from Taiwan, China, produces LED outdoor lamps for aquaculture and sports venues in a factory in Dongguan. Products exported to 14 European countries replace 85% of the company’s exports, and products exported to the United States account for nearly 10% of the company’s exports%.Before the Spring Festival, the workers on the assembly line of Mr. Lin’s factory returned to their hometown for the Chinese New Year.With the development of the domestic epidemic, when the factory production line opened in early March, less than 20% of the employees returned to the factory.”In the beginning, I was particularly anxious to recruit formal employees, but then the overseas epidemic situation developed and our overseas orders were cancelled one after another. In addition, due to poor logistics, many overseas orders could not be sent out.Mr. Lin said that the company has also suspended its production line to minimize losses.One person in Dongguan’s business community told Sauna.com that the reduced demand in the European and American markets and the severe obstruction of international logistics have caused the production lines of some pure foreign trade export companies in Dongguan to be suspended.”The news I have learned recently is that there is a foreign trade enterprise that makes handbag electroplating jewelry specially for the distribution of factories of foreign high-end handbag brands. Due to the disruption of overseas orders, the production line of the factory has been suspended a few days ago.”Don’t Dongguan’s foreign trade enterprises enter a difficult time?In an interview with Sauna Ye.com, the Dongguan Municipal Bureau of Commerce admitted that the production capacity of the enterprises in Dongguan has basically been restored. The foreign epidemic situation will affect the global industrial chain, supply chain and overseas orders of Dongguan ‘s import and export enterprises.pressure.The Dongguan Municipal Bureau of Commerce also stated that according to the law of previous years, the first and second quarters were the peak season for holiday consumption and the peak period for foreign trade companies to receive orders.However, at present, many countries have adopted import control measures against Chinese people and Chinese goods. Enterprises are restricted from going abroad to negotiate with foreign customers in Dongguan. At the same time, various internal trade fairs have been generally suspended, which has a certain impact on the company’s market development.Through monitoring and analysis, the key enterprises above designated size in the city are less affected by the international epidemic situation, and small and medium-sized enterprises have been penetrated by shocks.”At present, Dongguan’s foreign trade export companies are facing too much pressure, and some companies have adopted measures such as shrinking their scale to deal with the crisis, which is in line with the objective laws of the market economy.On the whole, the business of Dongguan enterprises is generally stable.”Dongguan Municipal Bureau of Commerce stated that it will further improve the production and operation status of the monitored enterprises, adjust the work points and response measures according to the times and circumstances, and strive to improve the pertinence and effectiveness of helping enterprises in difficulties.”The above-mentioned Dongguan businessmen also said that the epidemic did have a certain impact on Dongguan ‘s foreign trade enterprises, but how specific this impact is, it is not easy to assess now, and this impact is somewhat amplified by the outside world.In response to the unemployment problem caused by possible layoffs in some enterprises, the Dongguan Municipal Human Resources and Social Security Bureau told Sauna Nightnet that Dongguan has formulated an emergency plan for employee diversion of employment.Strengthen unemployment monitoring and early warning of unemployment, and establish a monitoring platform for damaged enterprises at the three levels of cities, towns and villages.Focus on visiting companies that have collective shutdown events or collective petitions and other mass incidents, establish a ledger, regularly track services, and resolve risks.At the same time, the Human Resources and Social Security Bureau is also strengthening the reserve of employment positions.Face B in epidemic situation: Foreign trade enterprises lack of work are afraid to take orders. While some foreign trade enterprises’ production lines are suspended, some foreign trade enterprises are afraid to take orders due to lack of work.Mr. He is the head of a foreign trade company in Yiwu. The company has cooperated with upstream factories for 20 years to provide certain categories of seamless knitted garments for all Wal-Mart supermarkets in North America.”Our company is not particularly affected by the overseas epidemic, because the company’s customers are mainly large-volume wholesale customers.The procurement cycle of these customers is at least more than half a year, and even more than one year in advance.For example, when purchasing winter or Christmas products in March, by the time of Christmas, the epidemic may have passed.”In Mr. He’s view, the epidemic has a short impact on customer procurement cycles and has little effect on wholesale Chinese suppliers, while retail channel sales should be based on the impact of quarterly or short-term Chinese suppliers.When many foreign trade enterprises were mainly affected by the overseas epidemic, Mr. He ‘s company and cooperative factories were still affected by the aftermath of the domestic epidemic.”Every New Year, many assembly line factories may not return to the factory. It will take about a month for the factory to re-employ, so that the production capacity can be restored to 70 or 80%.Affected by the epidemic this year, it is even more difficult to recruit people. In addition to the late resumption time, the resumption rate of some factories that have supplied me is only 50%.Mr. He said that the production capacity of the cooperative factory is insufficient, and the product delivery time cannot keep up. Only part of the profit can be given as a preferential compensation to the customer.In addition to long-term supply to Wal-Mart in North America, Mr. He’s company also supplies overseas retail customers.”The factory’s production capacity can’t keep up, we can’t take some retail orders or small orders now.”Our order volume and scores in the same period of the previous year have been reduced by 10% to 15%, mainly from retail customers who cannot receive orders.”Foreign trade enterprises save themselves: hoarding goods and turning to the production and sale of anti-epidemic materials,” Sun Yong, a cross-border e-commerce company in Yiwu, decided to stand up again.”” In two to three months, it can still survive, and I don’t plan to lay off staff yet. “Sun Yong ‘s own factory supplies the company ‘s cross-border retail.”Although orders have decreased, we have not deliberately lowered the factory’s production capacity. We plan to temporarily ship the goods for half a year.However, Sun Yong also said that the current decision is based on the judgment that the overseas epidemic situation has been effectively controlled within three months.Although the company is currently well funded, if the epidemic of overseas epidemics expands for more than half a year, “it’s hard to say.”Part of Zhao Peng’s production line is also in full swing-Costco, a well-known American warehousing chain supermarket, is still operating. This is the only customer in Zhao Peng that has not cancelled orders.”After the production of Costco’s orders is completed, our production line will continue to work on inventory-if not inventory, the company’s daily expenditure of more than 10 million yuan is equivalent to a loss in vain.If you do inventory, these basic expenses can also be spread into the inventory, waiting for the market to recover.”Zhao Peng said.However, Zhao Peng placed more hope on the overseas orders of the masks.As a large apparel manufacturing company, Zhao Peng’s company has a long-term strength R & D team that can develop seamless medical masks.”Some of the N95 masks we have recently developed have just been certified by the US FDA. If put into production, the factory can produce about 600,000 pieces a day.”Currently, Zhao Peng’s companies at home and abroad are preparing for overseas mask orders.Branches in Europe and the United States are in the process of anticipating mask orders with the local government. Among them, a company in the United States is bidding for the procurement list of the local government’s epidemic prevention materials.Once the bid is won, there are 10 million orders.”While the domestic production line is waiting for overseas orders, it is also stepping up training for employees of the original clothing production line, and the new mask production line is about to start.Recently, Zhao Penggang and the board of directors participated in the discussion on layoffs.”If there is no stable order, no one can eat more than 10 million per month.If the orders for overseas masks are not available, we plan to cut 30% of the assembly line workers.If orders for masks from overseas come up, the company will not lay off employees.”There are not a few foreign trade enterprises like Zhao Peng who are converted into epidemic prevention materials.”I went to the circle of friends to see that more than a dozen colleagues started to produce masks business-there are companies that originally produced small tools, those that produce high-power power supplies, and those that produce various electronic products.”Mr. Lin, the owner of the aforementioned LED manufacturer in Dongguan, also started the foreign trade business of masks, supplying the purchased medical masks to the local hospital through the Spanish branch.”Sales masks must be inspected for quality. Now employees of some companies are trained to go to the quality inspection of masks, or sent out to purchase and follow orders.”Can epidemic prevention materials become the straw for Chinese foreign trade enterprises?According to media reports in mid-March, Amazon has announced that it has masked masks, hand sanitizer and other new coronavirus-related products on its website.eBay announced a total ban on the sale of masks and hand sanitizers to prevent price fraud.In addition, Wal-Mart and other e-commerce companies are also trying to stop third-party sellers from driving up prices for related anti-epidemic products.”Almost all the epidemic prevention materials are on sale overnight. Only after the sales qualification is reviewed on the foreign e-commerce platform, the goods can be put on the shelves again, and the price will be strictly controlled.”Yiwu cross-border e-commerce Sun Yong said.In Zhao Peng’s view, switching to epidemic prevention materials is one of the ways for foreign trade enterprises to save themselves, but not every enterprise has sufficient self-help capabilities.”We have the ability to develop medical masks that meet the requirements of the European and American markets, as well as a sales network throughout Europe and the United States.How many companies have such capabilities?I believe that few companies have such capabilities.”Zhao Peng said.The accuracy of the rescued enterprises According to the latest data released by the National Bureau of Statistics, China exported 2 January to February this year.04 trillion yuan, down 15.9%; trade deficit 425.900 million yuan, compared with a surplus of 2934 in the same period last year.800 million yuan.The impact of the overseas epidemic has reversed, and companies are under significant pressure, and the export scale is not optimistic.Since the outbreak of the domestic epidemic, the relevant departments have issued a number of policies.”Many policies issued by relevant departments are necessary, but some policies also need to be adjusted and changed in a timely manner.Yao Zhizhong, deputy director of the Institute of World Economy and Politics of the Chinese Academy of Social Sciences, believes that the problem facing foreign trade companies today is a sharp reduction in external demand, and this trend will not be reversed in the short term.During this period, part of the policies introduced by democracy lost its grasp.”Some enterprises now have no exports, and without sufficient turnover, traditional policies such as tax cuts and fee reductions will not be effective.”The aforementioned Yiwu business owner Zhao Peng holds a similar view.”Policies such as tax reduction and fee reduction are helpful to a large number of enterprises, but they are no longer suitable for foreign trade enterprises whose turnover has been declining.The policy cannot be ‘sprinkled with pepper noodles’, it must be precise and tailored for different types of enterprises.Zhao Peng suggested that the policy should focus on the survival of medium-sized enterprises.”The impact of the epidemic on large and medium-sized enterprises is far greater than the impact on small and micro enterprises.The state has issued many policies for small and micro enterprises. Many small and micro enterprises can enjoy the policies. On the contrary, large and medium-sized enterprises that need to reduce costs most are not supported.”Now the medium-sized foreign trade enterprises are the most difficult, but they have to start work.”why?Without the start of work, the company may soon collapse.When the construction starts, the company can also spread the cost of the expenditure to the hoarded products.The question is, the epidemic in Europe and America may last for four or five months. How can these companies sustain it?”Zhao Pengpeng must find ways to keep medium-sized enterprises.”Compared to small enterprises, medium-sized enterprises have core patent technology and core competitiveness.After decades of baptism in the market economy, the country finally cultivated many enterprises and entrepreneurs.For enterprises, many management teams have formed the current fighting strength after many years of running in.If these enterprises fall in the epidemic, it is difficult to reproduce such supplementary enterprises and entrepreneurs in a short time.”So, how to improve the accuracy of helping companies?Tang Dajie, director of the research department of Sai Yi Enterprise Research Institute, has been following Chinese enterprises during the outbreak.In his view, one of the characteristics of foreign trade enterprises is that their credit records are relatively complete. Banks and customs have standardized records on the business and capital transactions of foreign trade enterprises.”When the government implements help policies, it can use these data to identify the situation of enterprises, implement targeted measures, gradually increase the credit limit, increase loans in proportion, and directly subsidize post stability.”Yao Zhizhong is critical. The severeness of export through foreign trade will lead to bankruptcy of enterprises or layoffs to save themselves. Unemployment will bring a series of problems.”Therefore, the focus of the next policy should be to help enterprises stabilize employment and reduce bankruptcy. The government can directly provide certain subsidies to companies that retain employees during the epidemic, and can also provide unemployment benefits to employees through enterprises.In addition to giving employment subsidies to enterprises, Yao Zhizhong also suggested that by stimulating domestic demand to reduce the consequences of weak external demand.”Appropriately, it is necessary to lift the control of the epidemic as soon as possible. People flow, logistics, and enterprises must be activated before consumption can be driven.At the same time, to boost domestic demand through investment, the direction and focus of investment can be new infrastructure, research and development in the field of communications technology, etc.”Sauna, Night Net Editor Hou Runfang Yue Caizhou Proofreading Chen Diyan