Cooperation with Chinese manufacturers enters a new level
The 2nd Russia - China Forum: New Opportunities for Sustainable Business Development will be held during the autumn edition of the Mir Detstva Exhibition. The results of the last year forum proved a positive effect of these business events. Between2countries, the forum organizer, has had a number of meetings with Chinese businessmen and developed and introduced a detailed procedure of partner business arrangement. We interviewed Leila Pavlova, the company head, on the details and technologies of the Russian-Chinese cooperation.
“What was your target during the trip? Was its format different from your previous visits to China?”
“One of the tasks we are working on now is to search for factories in China for Russian companies. The market in Russia is changing these days and the middle-size companies with stable sales levels who used to repurchase the goods already inside Russia are now turning to direct purchase from manufacturers. There are two reasons for it: the sales margin became lower and the price offered inside Russia became not quite attractive. After the 1st Forum, being very interested, quite a lot of companies turned to us to place orders for the goods in China looking for their “own” factories.
“This visit was very unusual, because I chose among the factories loyal to the Russian market and prepared to invite Russian companies to examine their production process, quality control and, of course, to have the orders for their products placed.”
“Today, the quality control and safety issues are especially important for manufacturers of the goods for children. In view of this issue, the confidence in Chinese manufacturers is not quite high. What changes have been recently made at the Chinese factories in this connection, if any?
“Chinese manufacturers became very attentive to the production quality issues, tidiness of the production process, and ecology, too. Many factories are now installing sophisticated air and water purifying equipment. Now the Chinese law has new requirements for equipment characteristics and industrial practices. In many industries there have started planned changes in production cycles in order to install various kinds of filters.
“The quality standards have been introduced for plastic products – the granules used in toy production. There are regular checks of the factories on the basis of which they receive certificates proving that they manufacture products strictly complying with the established quality standards of the country.
“A new segment of factories has emerged: those who keep product stocks or those who accumulate stock items.
“A special state program aimed at credit provision of exports is under development. There appear more various and affordable kinds of product credits and leasing programs for production equipment.
“Independent quality laboratories have emerged; they make checks from spectral analysis to analyzing whether the toys are suitable for use at cold or hot temperatures.
“A large number of producers are changing their marketing policies and start to form their own brands and trademarks; and they are prepared to study operational marketing and develop package types in accord with the market demand; they study the market demand, they are busy looking for designers in respect to the target markets.”
“What opportunities in cooperation with China does your company offer to the Russian manufacturers and suppliers of the goods for children?”
“We are searching for factories for our customers from the CIS countries. We help to make a ‘correct’ purchase if a customer company has never dealt with the foreign trade operations; for the medium-size business we build the whole supply chain from the product collection and the factory up to their warehouse. We help small companies from different regions unite and place a consolidated order to ensure the purchase volume and the price suitable for the Russian market. During our visit to the Chinese factories we try to make the Russian entrepreneurs understand the difference in mentality, learn Chinese traditions, and like this country and its people. When you build your partnership with a Chinese manufacturer, it is very important to demonstrate flexibility and loyalty.
“Friendly relations are established which influence the price level and business as a whole. Business, first of all, means people; it is they who invent, create, and develop it, and later on money, profit and turnover will come.”