China's Yiwu vendors move up high technology ladder

By Xie Jun in Yiwu Source:Global Times Published: 2019/5/15 18:58:39

Yiwu vendors move up high technology ladder


A handbag shop in the Yiwu International Trade City. The shop's owner Chen Lixiu said that the shop's business is deteriorating this year. Photo: Xie Jun/GT



Small commodity vendors in Yiwu, East China's Zhejiang Province, aim to sell products with high levels of technology and brand recognition at a time when weak demand at home and abroad is weighing on business. 

This is not something most of them would have considered in the past because Yiwu, one of the largest small commodity markets in the world, was generally known for low-cost products that attracted many overseas clients who wanted to buy things as cheaply as possible. 

Zeng Xiaohong, a luggage vendor in the Yiwu International Trade City, is one of those who have started to embrace change. Starting from around September 2018, Zeng shifted his focus from selling traditional luggage to selling suitcases that use technology. 

Now, one of the star products in his shop is a suitcase that uses facial recognition technology and a GPS system so that it can "automatically" follow its user, who doesn't need to hold it. This product has aroused the interest of many overseas clients, Zeng said. Other advanced suitcases in his shop include those with superlight materials and even some that a user can ride on.

Zeng's business shift comes as business slides for many vendors in Yiwu. On Monday and Tuesday, the Global Times visited several selling zones in the Yiwu International Trade City and saw that customers were sparse, with only about one of 10 shops having customers inside. 

"Business is harder year after year here," one owner of a flag shop told the Global Times on Tuesday. The decline is driven by multiple reasons such as the China-US trade war, the slumping world economy, and the rising value of the US dollar, another handbag vendor Chen Lixiu said. 

Yiwu's business difficulties underscore China's weakening trade situation. China's US dollar-denominated exports rose by 0.2 percent in the first four months this year, down from 13.7 percent growth in the first four months last year, customs data showed. 

Zeng also told the Global Times that the suitcase and handbag business has been on the decline in recent years in Yiwu. "In the past, my shop could earn revenue of about 45 million yuan ($6.56 million) each year. This year revenue hasn't reached 20 million yuan so far, " he said. "We have to find some way out of this situation."  

According to Zeng, high-technology products aren't as popular as cheap ones but their profit margins are far higher. For example, the wholesale price of his facial recognition suitcase is 4,500 yuan, while some of the traditional suitcases can only sell at 65 yuan.

Zhang Jiying, an umbrella seller in the Yiwu International Trade City, has been also putting a lot of effort into upgrading the value of her products such as using better materials or exquisite packaging that differentiate her products from traditional low-cost umbrellas. 

With branding, her sales focus has shifted from emerging markets to European countries, with her products particularly welcome among customers from countries like Spain, she said. Her strategy to enhance product quality and value means her business has been mostly stable in recent years with yearly mild increase.
Newspaper headline: Yiwu vendors move up high technology ladder


Posted in: ECONOMY,COMPANIES

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