Labor prices have been falling all the way
Due to the different geographical areas and different business areas, the perceived time for prices to fall is not exactly the same. However, the more recognized time period began in 1997. Before 1997, the labor price of CaiHuo was still very strong. With the Asian financial crisis and the continuous fall of the domestic economy, CaiHuo's wages began a long process of falling.
The drop in the price of Caihuo’s wages can be described as a blip. More generally, it is thought that it has dropped by nearly 1 times. 40-60 yuan/color before 1997. At present, only 20 to 30 yuan/color order can be made. The decline is even more alarming in some highly competitive regions. It has been alleged that the small offset printing job price in Wuxi has dropped to 8 yuan/color order, which is almost unprofitable.
The continuous fall in color work price directly affects the profitability of printing companies, which corresponds to the decrease in the wages, and the profit rate of printing companies is also reduced by a factor of two. Companies generally reflect that compared with the lucrative profits of printing colorful prints in previous years. Now that Choi & Fung's profits are thin, the customer's offer is harsh and the business is difficult to do.
In the mixed battles where the color of live-work falls, there are state-owned enterprises that are helpless, with recklessness of private companies and small businesses, and active price cuts by powerful companies, especially foreign-funded enterprises. According to sources, a well-known foreign company in Beijing has pressed the price of color rotation to be less than RMB 10 per color. With their quality level and professional quality, the impact on the market is conceivable.
The view on the decline in color work price is also a beholder of the benevolent and the wise see wisdom. Some interviewees believe that the original price has a high rate, and the current drop in the labor price is also a natural process of returning high profits to reasonable profits. This shows that the hands of the market are functioning normally. During the interview, a person who had previously worked at a large SOE factory was not without emotion. In the 1980s, the state-owned printing companies had good equipment, large scales, and comparative advantages. Colourful livelihoods were quite profitable. Now it’s not a day. The scenery is gone.
Some respondents also pointed out that in recent years, the decline in color work price, there is a certain degree of rationality. Because the raw materials needed for printing are also falling in price in recent years. For example, as much as 50% of the raw materials, the price has undergone several downward adjustments. This to a certain extent eased the impact of the decline in Choi Live prices on the profits of printing plants, allowing them to maintain a meager profit while the prices of the printing factories were falling sharply.
However, people in the industry agreed that the current price for Choi Live is already at the bottom and there is not much room for it to fall. Once again, everyone can only lose money and earn money. However, facing the severe situation of entering the WTO, whether the price drop will stop, and only the market can make the final answer.
Causes of imbalance between supply and demand
Exploring the reason for the continued falling of the wages, the industry experts analyzed the characteristics of the industry. The barriers to entry in the printing industry are low, and the average profit rate of the industry in previous years is high, which naturally attracts the flow of social capital to this area. From this point of view, there is a certain degree of rationality in the drop in color work price, which is a market adjustment process.
However, in the adjustment process of this market, due to a policy opportunity, the total supply of the market has been over-expanded. In early 1998, the state began to implement preferential policies for importing high-speed multi-color printing equipment, and the tax exemption rate was as high as 42.74%. For a while, orders for importers of printing equipment such as Heidelberg and Mitsubishi soared. According to preliminary estimates, in 2000 more than 400 multi-color offset presses were imported across the country. In the interview, many people invariably pointed out that the time when Choi Wah’s work price continued to fall was precisely the time when high-end imported printing presses were pouring in. The supply was enlarged in a relatively short period of time, but the demand did not immediately catch up. This was the direct cause of the round of price cuts.
To this end, it was pointed out in a sharp geology. In the course of this large-scale centralized purchase of equipment, is the government's guiding power available? Is there a phenomenon of out-of-control adjustment and waste of resources? Some people even pointed out that under the condition that the low-level printing production capacity has not been effectively controlled, the problem of excess production of advanced productive forces has begun to show its signs.
Whether or not the advanced production capacity is surplus does not depend on the growth rate of production capacity, but depends on the balance of supply and demand. The degree of fierce competition in the market intuitively shows that if demand growth is slower than supply growth, people will compete for food. The situation has dropped.
Objectively speaking, domestic printing demand has also grown rapidly in recent years. In particular, demand for packaging, printing, commercials, and commercial samples is in a period of rapid growth. Although the increase in demand lags behind the increase in print supply, this slow-growth cake has finally grown. The prospect of increased business activities after the accession to the WTO, and the huge business opportunities that have increased since the successful application of the Olympic Games have convinced people that there is unlimited potential for growth in the printing industry.
Therefore, optimistically, this centralized purchase is not an oversupply of equipment, repeated investment, but an opportunity to upgrade the industrial structure. Crucially, how can printing companies spur potential printing needs into real-time printing needs.
In fact, the most profound background and reason for the decline in color photo living prices is that China has gradually entered a market-oriented economy. In the interview, the person in charge of a Xinhua plant pointed out that the marked decline in printing prices did not start from the coloring, but started from prepress and from the color plate. The platemaking shop in the factory was the first to be affected. The pre-press plate entry barrier is lower and the market is open earlier. In this sense, today's competition in the platemaking market heralds the future of the color and live market competition.
Countermeasures to break through the market
Behind the phenomenon of Choi Wah’s falling wages, the company’s survival situation is very different and it can be described as a few happy families. There is a saying in the printing industry that one class is losing money, two classes are guaranteed, and three classes can make money. Among the companies we surveyed, there are both companies that are dissatisfied with single classes, and companies that have opened 3 classes and have equipment utilization rates of more than 80%. Some rising stars, especially foreign companies and private companies, are full of vitality, while traditional state-owned printing companies have suffered even greater losses.
Whether it is waiting for death or survival, some companies have come to a decision. With the adjustment of the tax exemption policy for imported high-speed multicolor printing equipment, large-scale equipment purchases have ended, and actual productivity is facing a process of reintegration. In the process of a new round of staking and market adjustments, what kind of companies can win depends on what kind of development ideas they are taking now, what market gaps they are looking for, and breakthroughs.
In contrast, business development ideas have two directions: external and internal. Opening up the market to the outside world is offensive, and its potential is unlimited. Strengthening inward management is defensive and the potential is limited. A senior manager of a packaging and printing factory in the industry told us that strengthening management contributes only 10% of profits. Therefore, we have focused our attention on the pioneers of the market in the industry to see how they can find new economic growth points through market breakthroughs in the market environment where the color of live-work prices continues to fall.
Really broken one: from mx 1 to mxn
Here m, we define a fixed customer for the company. From mx 1 to mxn, it means that companies need to consider how to provide multiple services for your customers. The money that he can get out of his pocket is not 1 yuan, but is more than 1 yuan.
Beijing Ditai Color Printing Factory knows how to develop its business. Their service range from the single black and white eight-color printing business in 1987 to the development of a “prepress creative design, color quality printing, and post-print protection†for customers in 2000. Dragon's printing solution. Take them for example in capturing the short-run color printing market. In 1993, they began short-run color printing; in order to move toward short-run color printing, they purchased German manroland double color machines and Heidelberg four-color four-color machines in succession. The quality and output have been further improved; the printing cycle has become more stringent with customers' requirements. The shorter the time, they purchased a short-run color printing high-speed printing press, which greatly shortened the delivery time and quickly expanded the market share.
Breakthrough 2: Excavate the first pot of gold in the market
Jilong Pudong Color Printing Company insists on winning with technology in Shanghai, where printing plants are like clouds. In 2000, they engaged in a new product, offset printing on PVC plastics, and was awarded the third prize for new product achievement in Shanghai. Because the new technology is the exclusive force of the industry, the current product in the country is only the Jielong one can do, so the labor price is 2 times the general color of live, the profit rate is high. Jie Long has tasted the sweetness and continuously expanded the output of such products. In 2000, it produced 6 million color reams. In 2001, it plans to produce 10 million color reams, which has become an important force to ensure the profitability of enterprises.
The success of Jie Long is that they know how to actively develop new products and new processes, strive to increase the added value of products, and rely on technological superiority to tap the first barrel of gold in the market. Due to monopoly advantages and exclusive advantages, this barrel of gold is often the most abundant. At the same time, the exclusive technological advantage also enables the company to obtain a brand effect accordingly, laying the foundation for the long-term development of the company. However, due to the numerous imitators and followers in the market, the first pot of gold will not be eaten for a long time. Companies must strengthen their awareness of the crisis and continue to innovate to discover more gold mines.
Breakthrough 3: Providing Value-added Services
Huixin Color Printing Co., Ltd., in developing an organic compound fertilizer plant printing business, helped the plant transform marketing concepts, conduct market research, improve packaging design, and plan marketing programs, so that the plant has achieved substantial benefits in a very short period of time. Huixin Color Printing Co., Ltd. has therefore obtained a large number of local high-end fertilizer packaging bags from the point of view.
Shanghai has a fast printing company that screens more than 800 customers each year at the end of each year to provide loyal customers with value-added services tailored to their characteristics. These two companies are not confined to merely providing products for their customers, but they also help customers to develop customers by providing value-added services and have entered a new realm of market development.
Breakthrough 4: Opening Up Foreign Markets
After China's accession to the WTO, the domestic market will gradually show an international trend. Only in the domestic market cannibalize, vicious competition has no way out. Enterprises that have launched products abroad and look for new economic growth points will gain more opportunities for development. At present, some companies are already trying to find ways to do this. Although profits are now very thin and even lose money, but companies believe that this is an opportunity to train the team and establish a brand, with a view to laying the foundation for future development.
Breakthrough 5: To be a leader in the small market
It is better to be the leader of the small market, not to be the follower of the big market, and take the path of professional development. Some companies have tasted the sweet spot for this. Jiangsu Unicom Group has a wide range of original printing processing. Later, they shortened the business front, specialized in cigarette label printing, actively expanded the range of cigarette marking services, and strengthened the means of processing tobacco labels. Now it has become a professional cigarette production base. As long as the customer prints the smoke mark, whatever the requirements are, they can be satisfied here. Taking the path of professional development has enabled Jiangsu Unicom Group to define its own market position and make them leaders in this field, consolidating its market position.
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