16May2008
Posted by Roger under: Furniture; Industry Trends.
China’s Factory Blues
http://www.spiegel.de/international/business/0,1518,543929,00.html
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Hsu’s new factory, it turns out, is running at just 60 percent of capacity, and he predicts that half of China’s lighting factories — almost all based in Guangdong — will have to close their doors this year.
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When more than a hundred South Korean-owned factories closed over the Chinese New Year in the eastern province of Shandong, 1,200 miles from the Pearl River Delta, thousands of workers were left without jobs — and with unpaid wages.
Distressing time for furniture retailers
http://www.latimes.com/business/la-fi-furniture14-2008may14,0,6770934.story
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“This is one of the toughest periods we have seen in the last 30 or 40 years,” Farooq Kathwari, chief executive of Ethan Allen Interiors Inc., told Wall Street analysts in a conference call a few weeks ago. “A lot of our business has been diverted to these going-out-of-business sales.”
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Along with the housing crash and rising fuel costs, Caffaro said, her business has been hammered by the falling dollar. The wholesale prices of furniture she imports from China and India have gone up 10% to 14% in recent months.
16May2008
Posted by Roger under: Business in China; Chinese Culture.
If I were worried about one single element of doing business in China today, it wouldn’t be inflation. Nor would it be the rising costs of exports due to the rapid appreciation of the yuan. Or rising fuel costs for that matter. Air pollution? Nope. The cost of labor going up would not be my main concern either. No, all of these issue seem unpleasant yet manageable, in one way or another, even if difficult. So what then pray tell would it be? Definitely it would be rising Chinese nationalism. Normally I bypass politics altogether, to focus on the furniture industry and china business - two things I think are interesting enough to keep me busy. But in many ways, I find todays topic be quite relevant since one will effect the other.
Chinese nationalism
Eleven years ago, when I stepped off the plane, I found people were surprisingly open-minded and curious. Interested in knowing about the world around them while not necessary accepting the viewpoints - but still extremely curious to know what they were. Sure, people would be quick to correct you if you didn’t understand that Taiwan was a part of China. But beyond this, the prevailing attitudes were mostly curiosity. Safety was not a concern either, other then falling through an open manhole, off your bike or more likely off the sides of some un-restored remote part of the great wall during a hike. But personal safety? I generally always felt as if I was a welcome guest in the country (albeit exploited for my expertise and spending power). This is probably one of many reasons why I continued to stay for so long, despite the challenges of living in a third world country. (And yes - in 1997 there was no Starbucks - no Ikea - no Tiffanys - no Walmart - no Vics, no Jenny Lou’s - no nothing, just lots of bikes).
But I never felt unsafe.
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14May2008
Posted by Roger under: Chinese Suppliers; Bad Suppliers.
As any experienced importer can tell you, the logistics of transporting large quantities of product internationally across oceans, local borders and even more so through national customs, involves quite a lot effort. Things can go wrong. In fact, things frequently do go wrong. Customs can hold up your order, freight damage can occur due to excess handling, mold on the product - you name it - it can happen. Importing from Asia (and particularly China) seems to add an additional layer of challenges being that most manufacturing environments also tend to be located in third world countries. Yet one thing which always baffles me is when first time importers ask “what can go wrong?” So, I thought it might be of use to share some of the horror stories we have come across mostly from customers prior experiences or people who have come across us on the web. Here are a few examples:
From “Arthur”
You have a company called beijingantiques.com advertising (in the links section) on your website. I bought a wooden table from them, paying almost AUD$400 for door to door shipping not including the cost of the item.
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5May2008
Posted by Roger under: China News & Events; China; Beijing Olympics.
This is an email which we mailed out to many customers, but I think its important enough to be posted here as well. If you import product from China, work in China or have any plans to travel to China between now and October, then pay close attention because this effects you!
As a result of the upcoming games in Beijing, we expect any and all business will be severely disrupted, increasing the closer it gets to the Olympic games. This will most likely effect large portions of the country including non-Olympic cities like Shanghai & Guangzhou. As you may already know air pollution is a major concern in China (particularly in Beijing during the games) and there is a high likelihood of the Chinese government will address this by shutting down large swaths of business during this time from North to South as much as the air pollution in major cities comes from the surrounding provinces. The Chinese government also believes that during the games, people will visit other cities which means their air quality will also be a concern and therefore factories in seeming unrelated places like Ningbo may suddenly close down. The recent political tensions with Tebet have also added complications with security tightening and for those planning on traveling to China, getting visa’s may be a problem. Business will probably not resume normally well into late September. With this in mind, we are making the following recommendations to all customers:
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25April2008
Posted by Roger under: Industry Trends.
Housing crisis hits furniture industry hard
There is a pretty decent, if not depressing article on The Press-Enterprise that sums up whats going on in the furniture industry in the US at the moment.
“For eight years, business was OK,” said Kim, whose store is near Riverside’s busy Galleria at Tyler mall retail center. “Last year it started getting a little bad, but this is the worst it’s ever been, and I’ve been doing this 28 years.”
“Inland economist John Husing said the severity of the current housing bust took a lot of people by surprise. It goes beyond the simple bursting of a bubble, he said.”
“All of us expected a housing slowdown, but didn’t expect the market to virtually stop,” Husing said. “The thing we all missed was the seizing up of the credit markets all over the world.”
A bit grim, eh? I agree. But there is some gems of advice in there which I would are worth considering.
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11April2008
Posted by Roger under: Chinese Suppliers.
There is a great article on the Silk Road International blog entitled “Three and a Half Kinds of Factories.”
- Purely Domestic. “Working with these factories can be both very rewarding and very frustrating. Usually they are excited about foreign business. They are willing to learn and they go out of their way to be good hosts. The problem is that they often don’t know what they don’t know about international standards. They think they know. But when it comes down to it, 9 times out of ten they either can’t or won’t meet the standards that are expected.”
- Mostly Domestic, Partly International: “What does a little more experience mean to you? It’s means your costs will be a bit higher. But it also means that your higher standards will be mostly understood and expected.”
- Purely International / Limited International: “There are some factories that claim to have a completely international clientele. I don’t want to call them liars, but the world is a pretty big place and while producing for Africa and the EU are both technically considered “international” I would submit that they are hardly comparable.”
Worth a read - Have a look at the full article here!
