I recently made a visit across Guangdong province in order to meet up with suppliers. My last buying trip to China was about six months before Covid struck, so the changes in the country were far more evident than if I had been a regular visitor. How have things changed since Covid ? Rediscovering China after 4 years absence made some of the changes more striking….
Many China suppliers have had a hard time during Covid for one reason or another and are more willing to be flexible and cooperative than prior to Covid. Small order quantities and special colours are easier to achieve nowadays.
Worker salaries have become high in many parts of china and more factories are looking for ways to automate and reduce workers. This trend has been ongoing for some time, but it is more evident when you visit some factories nowadays to see how few workers are employed there and this is a worrying trend for China. Nowadays it can be cheaper to run a factory in Eastern Europe than in China. Often it is only the low tooling and mould charges which keep clients tied to buying from China.
More suppliers are offering mono material plastics and PCR materials nowadays, but still very few suppliers are offering biodegradable materials. The efforts to offer more green solutions still feel a bit half hearted when one takes into consideration what is actually possible nowadays with biodegradable plant sourced plastics.
The China government’s crusade to clean up pollution has had far reaching effects on factories across China. There are now much tighter restrictions on pollution. Many smaller factories who didn’t choose to follow the rules have closed down. It is more expensive to follow the anti pollution rules, so the cost of some products has been affected by this clean up, especially in metal electroplating and bottle coating plants.
China continues to build and develop, the high speed train network is now reaching smaller cities and towns, making it much easier to get around China in less time. We covered huge distances in clean, fast trains which are frequent and affordable, often travelling at 300km per hour.
Gradually more China suppliers are listening more to the needs of their clients and making efforts to provide what their clients need, though there is still often a situation where sales people are mainly order takers who speak English. There is still not enough anticipation of clients needs and communication of new product opportunities. Generally we have to visit China and ask the suppliers ‘What’s new’ in order to find out what new technology they can offer or new product moulds have developed.
The China finished product market for perfumes and cosmetics is not as buoyant as earlier (according to anecdotal sources). However, beauty and perfume products are selling well online. Influencers and online selling is achieving high sales amongst the younger generation.
Chinese companies are trying to be more creative, to design more themselves. Many are not content just to copy or implement others’ designs. Some companies are innovating and taking steps to patent their ideas.
What can we expect for the future?
Chinese suppliers will start to travel more overseas to visit and find new clients instead of sitting in their factories and waiting for clients to find them.
Suppliers will be more creative and find ways to innovate to create difference for their products. They will place a greater reliance on good product and packaging design. Those who do not adopt these strategies will struggle to find business in highly competitive areas.
More suppliers will set up additional factories in other far eastern countries where labour is cheaper.
Prices will inevitably rise due to the stricter environmental rules and the rising wage levels
For the local China beauty and cosmetics market social media will continue to be a popular place to buy for younger people.Online bid selling and influencers promoting brands will be very important.
It will still be necessary to visit China regularly in order to stay on top of new developments, as most suppliers, even long established ones, cannot be relied on to communicate regularly about new developments.
Rediscovering China after 4 years absence made me appreciate the country more and the amazing Chinese culture, generosity and hospitality. It was really wonderful to meet new people and visit new beautiful places.