The question of how to make a business grow in a healthy and long-term manner is perennial. In the post-financial-crisis period, all businesses must enhance quality, efficiency, R&D, and innovation, as well as work together as a team. This is the only way to get out of this situation.
How could domestic embroidery machine firms deal with the crisis, grasp market possibilities, and achieve scientific progress in the face of the “chain reaction” of capital chain security, market development and services, and ruthless competition brought on by the global financial crisis? The author conducted an in-depth analysis and gave useful coping skills.
1st Challenge: Financial stability
The capital chain is a critical lifeline for every company’s continued growth. Corporate management frequently views a lack of funds as a “blood cancer”. Many former powerful corporations went bankrupt or got into problems during the global financial crisis that began in 2008, and the capital chain was the culprit of the former giants. The subsequent chain reaction is created exactly because of the enterprise’s poor capital chain.
Many Chinese embroidery machine manufacturers are still battling to keep their capital chains afloat. In a moment of strong market demand for embroidery machines (including computerized embroidery machines), several embroidery machine manufacturers strive to capture customers by lowering prices and allowing customers to pay in installments. On the surface, market sales appear to be brisk, but the reality is that the majority of embroidery machine makers’ “earnings” have been in the form of arrears for some time. Simultaneously, embroidery machine makers keep funds flowing by borrowing from banks and acquiring accessories on credit. In general, embroidery machine development at the period was haphazard and blind. Due to the tightening of bank funds when the global economic crisis affected firms with weak capital chains, components suppliers no longer enabled them to take credit, resulting in “fund gate” and even “bankruptcy” of small and medium-sized embroidery machine manufacturers.
Facts show that simply occupying a market through price rivalry is akin to quenching thirst with poison. If domestic embroidery machine companies want to grow, they should do everything they can to improve their collection rate and keep the funds needed for normal operations; on the other hand, companies should actively develop new products, continuously improve the added value of their products, and gradually eliminate the low-end market. ruthless pricing competition.
2nd Challenge: Expansion of the outside market and after-sales service
In 2009, embroidery machine sales in China increased despite the market, giving many businesses much-needed downtime. The fundamental cause for the market’s upturn, though, is robust demand in India. At the moment, the Indian market resembles that of Shaoxing’s Keqiao market. Fabric processing is the primary use of embroidery machines. Although the quality criteria for embroidery items are not great, they are price sensitive. As a result, most domestic embroidery machine businesses’ goods can fully suit the expectations of Indian clients, and a huge number of domestic embroidery machines are fast flooding into this expanding market.The characteristics of the Indian and Keqiao markets, however, are distinct: the former’s market demand is heavily influenced by local political and economic policies. It’s unclear, if not impossible, how long the present sales momentum will persist.
Furthermore, the high cost of after-sales support for international products is a deterrent to Chinese embroidery machines being shipped to India. Although Chinese embroidery machine products are exported to India, it is undeniable that, given the fact that domestic embroidery machines’ overall performance cannot meet the needs of the high-end market, actively exploring the emerging medium and low-end product markets in India is still a good choice.
3rd Challenge: Market positioning of “post-India” items
The quality and grade of items are determined by market demand. Because the items produced by users in grey fabric embroidery markets such as Keqiao and India are not of high quality, the technology and quality of embroidery machines do not need to be very high. Finding a new low-end market will be more challenging as the old industry becomes saturated. The product market must be repositioned in order for the Chinese embroidery machine sector to grow in the future. Instead of focusing on product quality after the market has saturated, key firms should make preparations for joining the high-end apparel industry in advance.
As we all know, product quality enhancement does not happen overnight. Companies who fail to prioritize product quality will eventually be phased out of the market.
4th Challenge: Counterfeit and substandard product competition is fierce
The majority of China’s large and medium-sized computerized embroidery machine businesses despise the market’s false and poor goods. The makers of these fake and shoddy products make low-cost embroidery machine products by refurbishing machines, using low-cost inferior accessories, installing fake electronic control systems, and so on, crazily stealing market share from legitimate embroidery machine businesses and bringing significant benefits to their operations.When the market condition isn’t optimum, this competitive pressure is amplified. Due to rising operational costs, essential businesses are under more pressure to survive, and "trickster" businesses fare better.
Furthermore, the service life and reliability of imitation embroidery machines cannot be guaranteed, and once the machine fails, the clients’ interests are at risk. Fake and inferior products are mixed in with regular products in rising markets like India, which would certainly harm the entire national brand image of Chinese embroidery machines abroad and affect the overall competitiveness of Chinese embroidery machine enterprises.