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Since the beginning of this year, the global economy is still in a downward trend due to multiple factors such as high inflation, geopolitical conflicts and soaring costs. At this turning point in the industry cycle, not only are cross-border sellers struggling with both traffic and sales volume declines, but many established factories are also inevitably impacted by the turbulent environment and are falling into operational desperation. Shenzhen's 38-year-old factory announces dissolution It is learned that on August 15, Xin'an Electric, a well-known home appliance factory in Shenzhen, issued a "Letter to All Colleagues". The announcement stated that in the context of a sluggish global economy and reduced orders, the company experienced the impact of the global epidemic, and its operating conditions further deteriorated, so it decided to dissolve early: it is planned to end operations on August 18, 2023. At the same time, the factory has also made arrangements for employees: written notice will be given in accordance with the relevant provisions of the Labor Contract Law, and corresponding economic compensation will be paid. The deadline for calculating the economic compensation is August 18, 2023, when the labor contracts of all employees will be terminated in accordance with the law. ▲ The picture comes from the seller’s disclosure It is learned that the factory was established in 1985 and mainly produces small household appliances such as household appliances, electric dryers, beer machines, curling irons, electric ovens, etc. for overseas customers. It was once a foundry for well-known brands such as Philips and Siemens, and has won many titles such as "Top 100 Processing Trade Export" enterprises . It is quite famous in the industry. Public information shows that the factory had more than 4,000 employees at its peak , but it has been laying off employees in recent years. As of August 16 this year, based on the number of insured persons in industrial and commercial information, the company only had about 2,000 employees left . Some industry insiders pointed out that the termination of orders by many overseas customers during the epidemic had a significant impact on the operations of Xin'an Electric (Shenzhen) . Although Xin'an Electric tried its best to change its thinking, exploring business opportunities in the "home economy" while starting to focus on the domestic market, it ultimately failed to reverse the downward trend and ended up with today's "dissolution". Therefore, when the news spread in the cross-border circle, many sellers also felt very sad about it. But in general, the reason behind the cold order of the factory is actually the weakness of global consumer demand. Under this circumstance, Xin'an Electric (Shenzhen) is not the only factory in trouble. China's exports slowed down, and cross-border factories collapsed one after another
It is learned that according to data released by the General Administration of Customs of China, China's exports fell 7.5% to US$283.5 billion in May , a drop far exceeding the 0.4% forecast by Reuters economists. Among them, China's exports to the United States fell 15.1% year-on-year , while exports to the European Union fell 4.9% . At the same time, domestic factory output continued to slow. According to industry insiders, due to factors such as sluggish market growth and a sharp drop in order volumes, the operations of many well-known cross-border factories have suffered setbacks in the first half of 2023. On May 31, a plastic factory in Shenzhen issued a closure notice: Although the company survived the epidemic, it failed to withstand the changes in the overall environment and could not reverse the downward trend . After discussion, it was decided that from June 1, 2023, it would completely stop production and business and enter the liquidation procedure. It is understood that the factory has been established for 17 years and is a long-established foreign trade factory, but it still cannot escape the impact of the turbulent environment. In June this year, a well-known printing factory in Shenzhen also stopped production due to poor management . It is understood that the factory has a 20-year history and has provided packaging services for many well-known overseas brands. When it closed down, it still owed employees millions of wages. In addition to the above-mentioned factories that could not reverse the downward trend and had to suspend production and business, in February this year, a well-known consumer electronics export supplier in Dongguan also gave some employees a three-month holiday due to a sharp drop in orders due to the overall environment . This news once caused a stir in the cross-border circle, and was even regarded by many sellers as a sign of the coming of the "cross-border winter". ▲ The picture comes from the seller’s disclosure It can be seen from the above that due to the continued sluggish macroeconomic environment and weak overall market demand, a slowdown in export orders is inevitable. However, industry insiders pointed out that hidden behind this "factory order depression" is actually the shrinking and stagnation of the cross-border market. After the wild growth stage, the cross-border market has returned to calm. Compared with expanding scale and shipping new products, today's cross-border sellers tend to streamline product lines, optimize costs to the maximum extent, save expenses, and leave enough profit margins. Cross-border sellers no longer distribute goods in large quantities, and the number of orders from cross-border OEM factories has also slowed down. Therefore, in the face of the successive closures of factories, many industry insiders still hold optimistic expectations for the growth of profits in the peak season in the second half of the year, rather than blindly "singing pessimism." According to a report released by Goldman Sachs, China's export growth rate in 2023 is estimated to remain in the "low single digits", but it also pointed out that demand for some product categories may pick up in the second half of the year.
Looking ahead to the second half of the year, faced with an uncertain global economic environment, cross-border sellers can only seek change in stability, follow market rules, accumulate survival advantages, and wait for the next opportunity for explosive growth. What do you think of this? Welcome to discuss in the comments section~
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