E-commerce helps the electromechanical industry to cross eight cost crises

All along, the Chinese economy is mainly an economy driven by external investment and product exports. Export profits have driven the rapid development of a large number of domestic industries, especially in the electromechanical industry.

After China joined the WTO in 2003, China's electromechanical industry entered the fast lane, and both investment and export boomed, hitting record highs. However, the financial turmoil of 2008-2009 has turned to many hardware and electrical enterprises like heavy punches, bringing the opportunity for the majority of electromechanical people to think again: the bubble economy in high growth is difficult to withstand the industrial crisis, then how can we stand in the market competition? Invincible?

The author believes that in order to answer this question, we must understand the trends of world economic and political development and the development trend of the industry, as well as new economic forms, such as the impact of e-commerce on the electromechanical industry.

Why do Chinese mechanical and electrical products have a greater competitive advantage than other countries' electromechanical products? This is mainly due to the low cost advantage. The components of cost combine raw materials, equipment, energy, manpower, land, capital, environment, exchange rate, technology, information, supply chain and so on. If these superior resources gradually lose their competitiveness, the electromechanical industry must take precautions and find out the crisis exports.

Raw materials. The non-renewability of the earth's resources has led to the gradual depletion of raw materials, such as steel. Since iron ore is in the hands of a few oligarchy like Rio Tinto and BHP Billiton, the price of iron ore has increased step by step in recent years, which directly leads to cost gradual Transforming into steel and final products, and this trend will continue.

equipment. As far as equipment is concerned, the stability and accuracy of China's equipment manufacturing industry are still not up to international standards. Therefore, many manufacturing equipments have to be imported from Germany, Japan, and the United States. It seems that China does not have equipment. price advantage.

energy. China is formulating a new resource tax system. As China's energy is relatively reduced, the price pressure on energy is also increasing. For example, the price of oil is about twice that of the United States. The new resource tax system will inevitably increase pollution. The tax collection of high-energy enterprises, and this part of the tax will eventually reflect the cost.

Manpower. Human resources have always been at the heart of China's competitiveness, but the strike tide and the shortage of migrant workers in early 2010 have broken this myth. With the implementation of family planning for more than 30 years and the rising price level, wage growth has been in recent years. The human resources market has become the main theme. According to the plan formulated by the state, it is expected that during the 12th Five-Year Plan period, the wages of workers will double, which means that the labor costs will also double.

funds. China's inflationary pressure is increasing, the country's monetary contraction policy continues to strengthen, and the excessive monetary easing policy during the economic crisis is returning to normal. The rise in CPI will bring up several deposit and loan interest rates. The final result is the rise in capital costs. high.

surroundings. Under the guidance of the concept of establishing an ecologically harmonious society, the government is increasingly demanding environmental protection. The way to increase the economy at the expense of polluting the environment has become a thing of the past. Strict environmental regulations will inevitably lead to the cost of sewage and waste disposal. Large, and production of products that meet environmental requirements, not only requires an increase in quality control, but also means that investment in research and development, environmental protection equipment, and testing equipment increases, and companies that do not pay attention to this aspect may encounter environmental disasters like Zijin Mining. In the end, it will lead to the decline of corporate reputation and the cost of huge pollution control.

exchange rate. The link between the renminbi and the US dollar has boosted China's export growth. On the one hand, it has created a good trading environment for China, and it has also accumulated a huge trade surplus, which has also put pressure on China's exchange rate reform. Since the introduction of the exchange rate reform in 2005, the RMB has risen by more than 20% against the US dollar. Although the RMB re-locked to the US dollar during the economic crisis in 2009, with the recovery of the world economy, the RMB exchange rate has once again become the focus of Western countries. Under heavy pressure, China restarted the RMB appreciation process in September 2010. It is expected that the RMB will appreciate by more than 20% in the next few years.

Since there are so many factors that lead to price increases, the price competitiveness of China's electromechanical products will drop sharply in the near future. How to ensure that products are competitive in the international market? In fact, in the composition of cost, we still have three factors that are not considered, that is, technology, information, and supply chain.

technology. Why do Chinese people like to buy goods in the West? Because the technology in the West is good, the quality of the products is good. Technology is a very important aspect of product competitiveness. Intensify innovation and establish core technologies to maintain competitive nuclear weapons. Everyone knows that Huawei has ranked first in the profitability of China's top 100 electronics companies for many years. What are the reasons? Because Huawei has its own core technology and has a core R&D team of tens of thousands of people, although the overall sales are not as high as some companies, the technology establishment has maintained the competitiveness of Huawei's products, making Huawei a higher level than other companies. Profit margin.

supply chain. Establish a complete supplier, realize the global allocation of resources and global placement of products, maintain the globalization of business philosophy and localization of specific implementation. Only in this way will we gain comparative advantage over other enterprises, but not because of geographical Market volatility affects the company's ongoing operations.

information. The twenty-first world is an information society. The collection, sorting, extraction and operation of information has become a catalyst for enhancing the value of products. The rise of e-commerce is witnessing the importance of information to business operations. Alibaba has established a world-wide platform for Chinese goods. On this platform, everyone competes fairly, without any intrigue, only on quality and price. With the information, whoever masters the customer and masters the initiative. The further development of network marketing, professional e-commerce b2b platform has been valued by the industry, such as electromechanical online in the electromechanical industry, boldly innovating in the establishment of e-commerce platform of China's electromechanical industry, setting a model for the integration of resources in the electromechanical industry and horizontal connectivity. Made a good result.

In short, the electromechanical industry should follow the trend of the times, play a favorable factor, eliminate unfavorable factors, forge ahead, and continue to innovate to be invincible in the fierce market competition!

 

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