In the name of cost?
Recently, some media articles pointed out that with the increasingly fierce competition in the furniture industry, and at the same time, under the weight of multiple costs, some furniture companies from Guangdong, Zhejiang and other places in the central and western regions of Jiangxi, Hubei, Sichuan, Chongqing, etc. Investigate and actively seek for a better production base.
It is undeniable that the appreciation of the renminbi, the sharp increase in raw materials and labor costs, and the impact of upstream real estate regulation and control policies, as well as the increase in logistics freight costs, strict environmental protection supervision, labor shortage, factory land advantage, export decline, capital shortage, etc. Factors have caused pain to many furniture companies. Frequently, the phenomenon of “electricity shortage†such as peak power consumption in the eastern coastal areas and relatively high electricity prices are also one of the factors that many furniture companies consider to move out (or shift their focus).
Furniture companies have also realized that if they change their development path when they are not comfortable, they will put themselves in a more passive situation, and the pain may last longer. As a result, the phenomenon of furniture companies going to the central and western regions for multi-site inspections has also taken place, actively seeking a variety of feasible ways.
Law of Attraction"
The central and western regions are actively improving the construction of the furniture industry park, which not only has become a “nugget place†for attracting foreign furniture factories, but also plays an important role in attracting foreign investment.
In 2006, the Chengdu Municipal Government officially approved Chengfufa (No. 52, 2005) document to build the Chengdu Furniture Industrial Park. After years of accumulation and development, relying on Chengdu's advantages in many aspects such as geography, transportation, energy, and policy, the Chengdu Furniture Industrial Park, which covers an area of ​​9,000 acres, has become Chengdu and Guangdong Lecong, Jiangsu, and Hebei. Xianghe has four famous furniture industry bases and four furniture circulation bases in China. Its comprehensive strength is second only to Guangdong Lecong.
In October 2010, the Huazhong Furniture Industrial Park, located in Qianjiang, Hubei Province, officially broke ground. Huazhong Furniture Industrial Park is the key project of the “Twelfth Five-Year Plan†in Hubei Province and Qianjiang City. The total planned area is more than 10,000 mu, and the total planned investment is 10 billion yuan. It is planned to be constructed in three phases. In March 2010, the Huazhong Furniture Industrial Park project was included in the key construction projects of the municipal party committee and municipal government for investment attraction.
“The transfer of eastern enterprises to the central and western regions has been greatly welcomed by local governments. Local governments in central and western regions including Chengdu, Xi’an, Wuhan, Kunming and Chongqing have launched targeted investment projects,†the media article analyzed.
Many viewpoints believe that under the guidance of the country's western development strategy, the central and western local governments provide furniture companies with support measures including land, taxation, infrastructure, and policies.
In fact, the shift of the industry to the west is not only the furniture industry, but also electronics, textiles, shoes and so on. What they are looking at is the rise of cities in the central and western regions, the continuous improvement of the living standards of local residents, and the huge potential of demand in the second and third-tier markets in the central and western regions.
How can the west move?
From the above, we can see whether there is a trade-off between cost and whether to move westward. The "soft rib" of the current furniture enterprises in China is not the location of the production base, but the "soft power". This is the starting point and core of the problem. The author also reiterated that furniture companies have successively sought to move westward, the essence of which is the integration and upgrading of the furniture industry.
Go back to the topic. If it is the relocation of large enterprises in the furniture industry, because they have greater advantages in scale and capital, management and operation are relatively complete, and integration is strong, which can promote more local employment and taxation, and is more welcomed by the local government; For small and medium-sized enterprises, if they only seek the low cost brought by the "hard environment", it is very likely that they will "toss" in the end.
Furniture manufacturing is a labor-intensive industry. If enterprises only rely on some “concessions†given by the outside to reduce costs, instead of making the company solid, efforts should be made to improve the core competitiveness of the company, such as increasing brand value, optimizing product structure, and improving production lines. Increase marketing innovation, even if the Westward transfer, it may not be able to guarantee enough profits, but become a "fashionism."
Moreover, even if it is successful in the west, adapting to the environment, it will take two or three years or more to produce benefits. During this period, the gap between the central and western regions will become smaller and the advantages will not last long. Moreover, everyone has gone, and together, the competition is bound to be very intense. In the long run, what is the difference between sticking to “breakthrough†and shifting “survival�
Therefore, fundamentally speaking, furniture companies should not do transfer, but transformation; practice internal strength and actively seek to develop a branded, refined and differentiated development path. Do a good job of positioning, take your own path, and let others move.
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