Perfect storm hits Canton Fair

Sellers urged to focus on branding, innovation amid decline in deals

A slow recovery in traditional markets and low demand from emerging economies combined to drive down the number of deals signed at the 115th China Import and Export Fair, the nation's largest trade event, the organizers said on May 5 as the fair ended.

Transactions during the twice-a-year event held in Guangzhou, widely known as the Canton Fair, fell about 12.6 percent year-on-year to 191.18 billion yuan ($31.05 billion), according to the organizers. Deals were down 2 percent compared with the autumn session last year.

The number of overseas buyers declined 7.23 percent to about 188,000, according to Liu Jianjun, spokesman for the event.

Citing the sluggish performance at the spring session, Liu, who is also deputy director-general of the China Foreign Trade Center, says the nation's exporters, had become more aware of developing innovative products and building brands to boost competitiveness in the global market.

"Given current global economic conditions, a growing number of Chinese exporters have realized that increased competitiveness, following industrial transformation and upgrading products, will help sustain growth in the future," Liu says.

Exporters that have developed their own innovative brands and value-added products that use advanced technology concluded more deals with overseas buyers at the fair, according to Liu.

According to the organizers, transactions at the brand exhibition area accounted for 34 percent of the total deals signed at the fair.

Trade deals signed at the fair with traditional markets including the European Union and Japan declined 9.44 percent and 4.69 percent, respectively. Deals with buyers from the United States increased, but only by 2.45 percent from the spring session last year.

Demand from emerging economies dropped, with deals from other BRICS buyers (the group of nations comprising Brazil, India, China, Russia and South Africa) down 12.96 percent. Deals with buyers from the Middle East and the Association of Southeast Asian Nations slid 21.9 percent and 18.3 percent, respectively.

"In the shadow of China's recent sharp export declines, Chinese companies need to attach more importance to upgrading their products and building brands," Liu says.

Jiang Lina, a sales manager for Wenzhou Tianjiao Pen Industrial Co, says the company had to invest more in product design and research to attract overseas buyers in recent years.

Jiang says the company, based in Zhejiang province, is the only domestic manufacturer of authentic pens bearing the image of Hello Kitty, the iconic cat designed by Japan's Sanrio Co Ltd.

Wenzhou Tianjiao also has several self-developed brands.

"Also, we have to diversify sales channels by giving more importance to the domestic market, which currently accounts for 60 percent of sales," Jiang says.

The company's exports slumped more than 10 percent in 2013, according to Jiang. A number of factors, including the stronger yuan and buyers' demands for lower prices, squeezed profits, according to Jiang.

"We had few new buyers at the Canton Fair this year. We are making efforts to keep up relations with regular buyers," Jiang says.

qiuquanlin@chinadaily.com.cn

(China Daily Africa Weekly 05/09/2014 page22)