How Can OEM Factories Upgrade to Brand Owner Companies?
HONG KONG, June 19 /PRNewswire-Asia/ -- With the impact of global economic recession, the rapid deterioration of the international markets has made the Chinese manufacturing industry face huge challenges. The Chinese economy relies too much on export, and the Manufacturing industry accounts for a big proportion of that. Within the situation of sharply decreasing orders, where are the enterprises going?
For such enterprises, some of them immediately die in the storm, some of them stay in business at the cost of job and salary cuts, and still, some of them explore the domestic market actively to respond to the atrophying global market.
There are also some other enterprises that are different from the ones above. Normally they are OEMs for foreign brands for one or two decades. They benefited from the Chinese Reform and opening-up and have enjoyed the preferential government policies and the cheap local labor resources since their establishment. With this capital in hand, they possess the cost advantage that foreign companies cannot match. They have earned large profits just by continuously expanding production. However, when the scale becomes larger and larger, they begin to have a sense of crisis. From the initial OEM to the upgrade ODM, such enterprises could only process products based on the drawings supplied by the foreign companies at the beginning. Later, they have their own R&D teams. Also during this period, they realize that during the process of product development, manufacturing, and the final distribution, they had paid so much while most of the profit goes to the pockets of certain brand holders.
The awakening entrepreneurs begin to think of building their own brands: From the initial development, to manufacturing to the final distribution. If the whole process can be controlled, then the overall revenue could be ten times that of the simple OEM or ODM.
The storm is coming, which forces them to move faster. Building their brand becomes extremely urgent.
On June 18th, the first Guangdong Foreign Investment company product (Domestic Selling) exhibition was held in Dong Guan, China. The economic storm since last year has made a huge impact of the local economy in Dong Guan. Dong Guan is the biggest manufacturing base in China. There is a proverb which can describe the impact of the Dong Guan manufacturing industry on the global market – if a traffic jam happens in Dong Guan, the world will be out of stock. Just for this reason, the local government of Dong Guan has sent out an advertising message: “Free Exhibition and Free Hotel Accommodation.” The purpose is simple, to help the manufacturing industry to go through the toughest time by domestics sales, to build up own brands step by step after the storm, and to build own distribution channels. In that way, a prosperous economy in Dong Guan can arise. Steady politics and peoples’ happier lives can be expected.
Fairthewold.com (China) also sent two staff to Dong Guan to report on the show. One was Mr Zheng Li, Chief journalist of Fairtheworld 3D Media and the other was Mr. Bin Wu, General Chief Editor of Fairtheworld 3D Media. They had communications of great depth with these enterprises and interviews with the Entrepreneurs. They also did the analysis of the exhibition. Fairtheworld.com, as the leader of 3D Virtual Exhibition, is concerned greatly by the exhibitors. For such enterprises without any brand and marketing experience, how to “sell in domestic market and go out” becomes the biggest trouble. The think tank of Fairtheworld.com gave solutions to these enterprises there. They gave detailed answers about how to increase international visibility, how to increase cooperation opportunities, and how to do the marketing job internationally.
After the Show, many companies showed strong wishes to cooperate with Fairtheworld.com. Fairtheworld.com staff said that they would communicate with headquarters as soon as possible. They would speed up the development of 3D Finance Media, and help the future Chinese brands and global brands to grow and expand.
