Chinese Goods Suffer 60% Dip In Sales This Diwali; Made In China Products May Become Expensive Now
The Confederation of All India Traders (CAIT), a powerful lobby of traders and merchants have said that Chinese goods suffered a massive dip of 60% in overall sales this Diwali. Not only crackers but electronics gadgets and lighting devices made in China have experienced reduced sales this festive season.
The announcement from CAIT holds significance, considering that the data was collected from the top 20 Indian cities which includes Delhi, Mumbai, Nagpur, Jaipur, Ahmedabad, Kanpur and Bhopal. Hence, the dip in Chinese goods’ sale is a pan-India phenomenon, and not some local incident.
Last month, we had reported that a local trade body from Rajasthan is claiming that there is 40% reduction in demand for Chinese products this Diwali. This claim has now been proved by CAIT.
As per the official press release, the reason for such reduced sales of Chinese products across India has been attributed to widespread social media campaigns to boycott Chinese goods.
CAIT said, “Realising the mood among the people because of the social media campaign, traders across the country were seen reluctant in displaying Chinese goods on the counter and some traders had even put “Make in India” boards at their business establishments to woo consumers..”
Not only social media, but some Govt. representatives had also openly requested the citizens to boycott Chinese products.
Although Chinese media dismissed #BoycottChinese campaign as a mere stunt by social media and reported bumper sales; it seems that some categories did indeed experienced heavy loss this season. Atleast CAIT data proves that.
Chinese Goods May Become Expensive In Coming Days
Meanwhile, due to 4-fold increase in labor costs since last 20 years, rising cost of raw materials, and anti-Chinese campaigns in countries like India, there is a good possibility that prices of ‘Made in China’ products may rise substantially in the coming days.
The indicators for such price rise were observed at Canton Fair, where a trade fair has been going on since 1957 at Guangzhou, China.
Bloomberg interviewed several experienced traders, manufacturers, and concluded that price rise is now inevitable due to several factors. Hence, ‘Made in China’, which was synonymous to low cost, cheap products may not be so in the coming days.
Take for instance Roger Zhao, 52, who is the deputy director of Jiangmen Luck Tissue Mfy Ltd, a company based in the city of Jiangmen in southern Guangdong province. They have already reduced their staff by 50% and adapted automation to cut costs. But its not enough anymore.
He said, “There’s just no possibility for me to cut prices any more. Because costs are already pretty high and I don’t see any possibility they’ll go down, I’m seeking opportunities to raise prices a little bit.”
Sandy Chang, founder of bathroom accessories maker Dongguan City XinChen Gift Co. in Guangdong, China expressed similar vibes, when she said, “It’s impossible to cut prices further. The only way out is to increase efficiency, reduce waste and to get ahead by selling more.”
Her company’s sales have reduced by 30% in the last 4 years, have experienced labor costs rise by 400% in the last 10 years and now, she maintains a staff of only 100, which was the case in 2012.
Such sentiments shared at Canton Fair holds significance, as 25,000 exhibitors showcased their products and around 2 lakh buyers reached the fair to finalize deals worth billions of dollars.
As per various analysis, such rise in Chinese prices will have significant impact on those countries, which are dependent on Chinese imports to meet their local demands. The top 5 countries which import maximum Chinese products are: US, Hong Kong, Japan, South Korea and Mexico. Australia, UK, and some other European countries are also heavy importers of cheap Chinese goods.
If seen from the Indian standpoint, there its an excellent opportunity for Indian manufacturers and exporters to rise, and prove that Indian goods can be equally good and low cost, besides being high on quality compared to Chinese products.
If prices of Chinese goods rises, then several aspects of global trade can alter; and rise of Indian manufacturing can be one of those.
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