The hottest purchasing tycoon said not to raise pr

2022-08-24
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Purchasing tycoons say not to raise prices. China's electronic exports are divided into strong and weak ones.

"if your supplier insists on raising prices again and again, will you choose to purchase his things?" On June 20, this newspaper asked Ma Zhenxiong, vice president and general manager of circuitcity, the second largest electronic retailer in the United States, who was negotiating procurement in Shenzhen

"if you always go to a restaurant and its price rises, but others don't, will you still eat it?" The horse asked quickly

"suppose you used to like the food in this restaurant?" Continue to ask

"you know, it's not difficult to find a restaurant that is equally delicious. Doing business is no different from choosing a restaurant." Ma Zhenxiong then added in a slightly relaxed tone that circuitcity was also trying to find various ways, including "adjusting our sales strategy, integrating our supplier network, and helping our suppliers cope with the problem of rising costs", but all the ways did not include price increases

since 2008, under the attack of the U.S. economic slowdown caused by the subprime mortgage crisis and the appreciation of the RMB, purchasing giants including circuitcity have become the "buyers" that Chinese suppliers have the most headache and are most eager to fight for and retain - on the one hand, the most severe "cost" lever of American retailers seems to have no possibility of shaking; On the other hand, the economic recession has increased the performance of large U.S. retailers instead of falling. Circuitcity, with an annual sales of $16billion, is clearly still a must for Chinese electronics manufacturers

in Ma Zhenxiong's view, electronic products are the most special products in the process of fighting inflation. "Historically, the trend of global electronic products is to reduce prices and never increase prices. The unit price of iPhone was $400 when it first came out. Recently, the market share of products was increased by expanding utilization. The price just announced is $199, which is the case in this industry."

mazhenxiong said that the success probability of suppliers trying to balance the cost impact by simply raising prices is zero

the face of American buyers: no price rise

in 2008, the pressure hanging on Chinese electronic export suppliers is increasing: the appreciation of the RMB, the economic recession in the United States, the rise in human costs brought about by the labor law, the reduction of export tax rebates, the rise in the price of raw materials, and so on are deteriorating the export situation of Chinese electronic products

since 2008, the number of "buyer's special purchase meetings" held by global resources (nasdaq: this kind of material was introduced as handheld medical equipment and medical equipment shell) company, which specializes in international import and export trade intermediary services, has increased by almost 50% to meet the needs of small and medium-sized suppliers who are desperate for buyer information due to rising costs and declining orders

"our plan for this year's' buyer special purchase meeting 'is 80, compared with 50 last year." Craigpepper, chief operating officer of global resources, said, "from our experience in international trade for many years, the more depressed the economy is, the higher the professional requirements of customers for the supply and demand information of buyers and sellers."

"last year, when many of our colleagues met, they were still talking about 'picking customers', and this year they were talking more about' who will die '." Mr. Jia, the head of Shanghai Jingjia Industrial Co., Ltd., who has more than ten years of experience in the export of consumer electronics products, described the severe situation faced by Chinese electronics suppliers

Mr. Jia also believes that from the middle of 2007 to 2009, it is a veritable winter for Chinese electronics manufacturers. During this period, "reducing the requirements for profits and stabilizing customers" is the best policy to preserve strength

"some people think 2008 is the worst year. I'm pessimistic. I think it's a crisis to survive 2009." Mr. Jia said

then who can survive, and who will fall under the cold—— It depends on who can retain buyers while resisting declining profit margins due to rising costs

among them, the choice of buyers plays a fatal role

"some suppliers have spread their cost accounts to us, and they have no choice." Ma Zhenxiong said that considering China's position as the world's largest exporter of electronic products and the symbiotic relationship between buyers and Chinese suppliers, circuitcity also began to adjust its procurement strategy in China on the premise of "no price increase"

volume rise and price fall

"in the past, some products were purchased from companies, but now they are concentrated at home." Mazhenxiong said that one of the adjustment strategies adopted by circuitcity is to change the original decentralized procurement method and concentrate products to individual suppliers

the purpose of this is to expand the scale advantage of a single supplier in parts procurement, so that it can obtain higher bargaining space upstream, and achieve the goal of scale for profit

in addition, after clearly reducing the number of suppliers, circuitcity also extended the order cycle, "let them know the number of our orders earlier, so that they can make a budget"

of course, the result of this is that Chinese electronic product suppliers will form a situation of uneven food and clothing and the separation of strong and weak

"the shrinking range of suppliers will certainly make life difficult for some unsuccessful manufacturers, but we are also increasing the purchase volume, so that some suppliers can get higher orders." In Ma Zhenxiong's view, the U.S. economy, shrouded in the shadow of recession, is not a massacre. "Our procurement situation in China in the first half of this year is very good."

as the second largest electronic retailer in the United States, circuitcity has 650 stores in the United States and 800 stores in Canada. According to Ma Zhenxiong, since the first half of this year, the sales of goods purchased by circuitcity from China "increased by 250% to Canada and increased by 10 times to the United States"

mazhenxiong believes that the reason why the U.S. e-retail industry bucked the trend and increased purchases is that "the economic downturn does not mean that Americans do not buy things, but they will pay more attention to what consumption is more affordable; in addition, the reduction of bulk spending by American families will instead promote the purchase of electronic products, for example, they will cancel their expensive swimming plans and switch to buy game consoles and DVDs"

Ma Zhenxiong further revealed that for circuitcity, in the first half of this year, the sales of "more expensive" first-line brand products such as Sony and Panasonic operating in the store were declining, while the sales of "circuitcity" own brand products were soaring

"at present, the sales of our own brand products are only 10%, and there is a lot of room for growth in the future, because they are more affordable." Ma Zhenxiong said that bestbuy, the largest electronic retailer in the United States, is also increasing the supply proportion of its own brands that hope to help everyone. "The sales ratio of its own brands has reached 25%."

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