Posted : October 12, 2011
Suppliers in China are optimistic about export sales in coming months even as they contend with pricing pressures.
Growth projections start at moderate levels, but most respondents in Global Sources' survey expect aggressive marketing efforts to payoff in terms of a substantial increase in revenue.
Almost 40 percent of manufacturers said earnings from overseas shipments will jump by more than 20 percent through 2011 and early-2012. About a similar number placed the rate of increase between 10 and 20 percent. Only 2 percent of the makers contacted said exports will slow down in the months ahead.
The positive outlook is particularly apparent in several segments of the consumer electronics industry. Responding to strong demand for sophisticated devices, companies are directing product development efforts toward units with advanced features.
In home entertainment, for example, suppliers are introducing models boasting high-definition, 3D, network connectivity and energy-saving capability.
As for mobile phones, the trend for all-in-one functionality is spurring the flow of smartphones out of mainland China. Companies are nurturing secondary lines such as projector and QWERTY phones to boost business further.
Within the access control systems segment, data verification continues to be at the core of upgrades. Adoption of biometrics technology is growing, especially fingerprint recognition. Meanwhile, digitization is driving changes in video doorphones. Companies are exploring the advantages of TCP/IP networking and home automation to improve performance and break into the high end.
To keep their customer base and ensure growth targets are met, suppliers are tamping down price increases despite rising material and labor outlay.
Quote adjustments in both mature and younger sectors will be mostly within the 5 to 10 percent range. This is true even for product lines that faced significant setbacks in procurement. In fact, most computer terminal makers contacted said price increases will not exceed 5 percent. The cost of memory chips jumped following the March 2011 Japan earthquake.
In contrast, solar panel quotes are on a downward trend, a consequence of falling polysilicon costs. Companies are also cutting prices to fend off competition posed by new players that have been attracted by rising demand for alternative energy technologies. Makers hope the last will offset price reductions and sustain the line’s growth revenuewise.
This survey was mostly conducted in the mainland's primary export centers of Guangdong, Zhejiang and Fujian provinces. Additional companies were from Jiangsu and Shandong provinces, and Shanghai. Suppliers in Taiwan and Hong Kong were likewise contacted.
A total of 900 suppliers from various industries were interviewed in the six months covering April and September 2011. Gifts and premiums, electronic components, fashion accessories, auto parts and accessories, telecom products, electronics, baby and children's products, security products, garments and textiles, and sports and leisure are among the industries covered.
Forty-three percent of respondents have midsize operations, with annual exports ranging between $1 million and $5 million. A slightly similar number of companies make more than $5 million from overseas shipments every year. The rest of the companies post export sales not exceeding $1 million.