Zhejiang Foreign Trade Watch: What happened to those companies that adhere to "long-termism"?

Hangzhou, April 4 (Zhongxin Net) -- Zhejiang's foreign trade data has recently looked a bit difficult. Customs data show that from January to February this year, Zhejiang's total import and export volume was 1.1 billion yuan, down 2.6913% year-on-year, of which exports were 5.4 billion yuan, down 8.5029% year-on-year.

The reporter found that in the face of challenges such as weak market demand in Europe and the United States, some foreign trade enterprises in Zhejiang are obviously a little anxious, while some enterprises appear to be quite "calm", and their confidence comes from the persistence of "long-termism".

What is "long-termism"? For enterprises, it is to go beyond short-term interests and temporary outlets, and steadily pursue longer-term and more stable development.

Extending the time dimension to 20 years ago, since joining the WTO, a large number of local foundry enterprises in Zhejiang have relied on the simple OEM model to "soar" all the way, but now they are caught in the dilemma of upgrading and embarrassing choices; However, at that time, there was still a group of enterprises striving to "attack" to the high end of the industrial chain and successfully achieving upgrades, accumulating the ability and confidence to cross the economic cycle.

This may be able to find the imprint from Shengao Technology. Shengao Technology is a typical Zhejiang enterprise, the founder Ni Liangzheng was originally a carpenter, and founded this leading enterprise in the office furniture industry from scratch.

A bird's-eye view of Rayong Industrial Park. Photo courtesy of Enterprise

Shi Yinjiao, deputy general manager of Shengao Technology Co., Ltd., recalled to reporters that in 2010, the domestic market tended to be saturated, and Shengao decided to expand overseas markets, and there were two paths in front of them at that time: either take the "short, flat and fast" OEM route like other companies; Either take a road that others do not take or take less, or choose a brand to go overseas, although the initial investment is high and the return is slow, but it is stable.

After some trade-offs, Shengao finally chose to take the road of "long-termism" and set up R&D centers and subsidiaries overseas.

In the interview, Shi Yinjiao shared a story with reporters, "I still remember that more than ten years we went to Dubai to participate in exhibitions, and some customers were very interested in our products, asked us if we were European enterprises, and then when we heard that we were made in China, they shook their heads and left." ”

Shi Yinjiao said frankly that her experience touched her a lot. For Zhejiang enterprises accustomed to the OEM model, improving the overseas image of the brand is destined to be a long way off.

"Where the design talent is, we go." Shi Yinjiao said that in recent years, Sheng Ao Jiao has cooperated with international leading designers and design institutions, and has successively established Sheng Ao R & D and design centers in Berlin, Germany and Los Angeles, USA. Since 2015, it has also held a number of global designer cultural tours, inviting world-famous designers to West Lake and Wuzhen to experience calligraphy, Tai Chi, etc., and feel China's cultural heritage.

Shi Yinjiao said that in recent years, Shengao has not only moved the design center forward, but also moved the service link forward, setting up overseas subsidiaries in the United States, India, Russia, Singapore and other places, and setting up factories in Mexico. In the first few years, it has been continuously invested, from products going overseas to localized operation, and in recent years, brand influence and market share have been greatly improved. Since 2017, the business in overseas markets has achieved an average annual growth rate of more than 30%.

On the road to the sea, Holley Group also abandoned the low-threshold OEM model, chose the industry to "go global", shifted from exporting products to exporting industrial manufacturing capabilities, and also built an overseas industrial park platform to empower manufacturing enterprises that "go out later".

The first stop for Holley's "going out" was Thailand. In the 20s of the 90th century, Holley's energy meter products were exported to overseas markets, and then in order to better serve customers nearby, Holley launched the "sales real estate" strategy (that is, "sales area production") in 2000 and began to invest in Thailand.

After 5 years of climbing and practice, it has gradually stabilized the overseas market. After that, Holley came up with the idea of building an overseas industrial park platform, which is the origin of "Holley Thai-Zhong Rayong Industrial Park".

Zhang Guifang, vice president of Zhejiang Holley Overseas Industrial Development Co., Ltd., told reporters that in the process of "going out", enterprises will encounter many difficulties, such as host country laws and regulations, human environment, supply chain resources, language communication barriers, etc. Therefore, the original intention and mission of Holley in developing and building overseas industrial parks is to use the experience of going out first to help Chinese enterprises "go out" more safely and efficiently. Moreover, through the platform of industrial parks outside China, a good ecology of "group going to sea" and "group development" can be effectively formed for many enterprises.

Since the development and construction of the "Thai-Chinese Rayong Industrial Park" in 2005, it has attracted more than 190 Chinese enterprises to settle in, bringing more than 4,5 jobs to the local area and driving Chinese investment in Thailand to exceed US$45.2015 billion, and then, the second North American Huafushan Industrial Park in Mexico launched by Holley in 30, has also settled in nearly <> enterprises, effectively promoting the integration of Chinese manufacturing enterprises into the global industrial chain.

"We have always felt like 'civil messengers.'" In Zhang Guifang's view, going out along the "Belt and Road" is not simply selling products to countries and regions along the route, but to truly integrate into the local society, and truly promote local development through international production capacity cooperation to achieve mutual benefit and win-win results.

Through them, we may also be able to see the future path of Zhejiang's foreign trade - the reconstruction of the global supply chain is both a challenge and an opportunity, and only by going out, sinking and integrating into it can we truly go steadily and far. (End)