Yiwu small commodities market sees sales decline amid economic slowdown

The city of Yiwu, famous as a wholesale marketplace for small commodities trading, has felt the pain of the economic slowdown in Europe and the US. 

Many traders in this Zhejiang Province city now think back fondly on the not-so-distant past, when an estimated 210,000 merchants a day – including 13,000 from abroad – buzzed about in a marketplace of some 60,000 stalls, offering almost 2 million pieces of merchandise that ranged from Christmas ornaments to toys and jewelry. 

Yiwu was such a thriving marketplace that the State Council, China’s cabinet, made it home to the nation’s small commodity index – a barometer of global consumer goods prices. 

In the past, Yiwu merchants sold about two-thirds of their products to foreign buyers. Now, with Europe facing a debt crisis and recession and the United States in a somewhat slow and shaky recovery, orders are drying up and the once noisy marketplace has lost some of its buzz. 

“I am experiencing the worst times since I started my business in 2000,” said Liu Hua, general manager of the Lucky House Toy Factory. “Sales have dropped 10 percent in May alone.” 

Liu and her husband ran a factory with 50 workers in Yiwu, selling dolls and cartoon wallets at a market stall. Theirs was a pattern similar to that of many other traders in the city. At a high point in 2008, the couple was earning a 20 percent profit on its goods. 

Whereas foreign buyers once accounted for 80 percent of the merchandise Liu sold, that ratio has now turned domestic. Where once she dismissed domestic retail buyers, now she courts the droves of consumers who come to the city looking for bargains. Products wrapped in bulk for the wholesale trade have been torn open and repackaged to accommodate the smaller-lot domestic trade. 

A certain sense of despair spreads across the relatively new four-story, air-conditioned Yiwu marketplace. 

Merchants sit in front of their stalls with little to do but discuss bad times with fellow stall owners. Some sleep or while away the time playing computer games. Tele-controlled aircraft toys fly effortlessly through mostly empty passageways as vendors try to attract attention. 

Domestic market 

There are still foreign traders, mostly from India and the Middle East. They walk through the marketplace with their Chinese translators, browsing and asking about prices. If they want to buy, they can drive hard bargains. 

“Sales have dropped by up to 30 percent this year,” said Fu Chunhan, deputy market department manager of Zhejiang China Commodities City Group Ltd, operator of the Yiwu markets. “Foreign traders are more cautious, and most favor short-term orders.” 

The Yiwu small commodities index dropped 0.8 percent in the first three weeks of May to 103.94. It was 108.02 at the start of 2011. 

Yiwu merchants like Liu are scrambling to shift their focus to domestic buyers. 

“The domestic market now gives us better profits than the foreign market,” said Chen Peilang, executive manager of the Zhejiang Rose Umbrella Co, one of the biggest umbrella manufacturers in Zhejiang. 

Rose Umbrella’s domestic sales have risen to 50 percent of revenue from less than 30 percent in 2005. Chen said it hasn’t been easy for foreign-oriented manufacturers to suddenly shift to the domestic market because it takes time to build up brand familiarity. 

“Although Rose has been popular among European and Japan customers, most domestic clients still know only the Tiantang, or Paradise, an umbrella brand in Hangzhou,” he said, referring to the Zhejiang provincial capital. 

Down but not out

Yiwu’s leading trade Agent Yachina is one of the most successful trading companies in Yiwu. “Even though the world economy is yet to fulyl recover, your own effort and dedication to quality service counts the most. ” says Oliver Stone, the company General Manager, who owes his success to American standard service and quality control. Yachina’s total turnover doubled last year despite the dire economy .

Yiwu merchants may be down but they’re not out. To raise the profile of their brands in the domestic market, many have opened online stores.

Ai Shengming, 45, has been one of the more successful. 
Ai was losing money until he established an online store for his Mengchi Ornaments Factory in 2010. Clients can now design and build three-dimensional models on his website, with prompts from factory staff. 

“Most other Yiwu ornament companies need to have samples to show to their clients,” Ai said. “But I need only draw models with computer software, which saves on costs.” 

He said he received orders valued at more than 14 million yuan (US$2.21 million) last year from traders in Russia, the United States and Europe. 

That success hasn’t gone unnoticed.

Online store 

More than 70 percent stalls in the Yiwu market opened online stores in the wake of the European debt crisis, said market operator Fu. Broadband access is available to all stalls in the markets. 

“The city now has more than 50,000 online businessmen, with annual volume of 50 billion yuan, almost the same with that of the physical stalls in the market,” Fu said. 

To survive going ahead, Yiwu merchants must develop their own brands and move up the value chain, rather than relying on small profits from selling huge quantities of cheap goods, said Weng Jianping, deputy director of Yiwu’s Bureau of Commerce. 

Neoglory Group, a leading ornaments manufacturer in Yiwu, is a case in point. 

The ornaments maker developed the high-end brands Su and Tofu, which are mainly silver jewelry of such high quality that they were exhibited at the Paris Fashion Week, said Neoglory Ornament general manager Yu Jiangbo. 

The higher-end products and the company’s ties with global retailers like Sweden’s H&M have helped Neoglory remain profitable in these hard economic times, Yu said. 

Neoglory’s ornament production brought in revenue of about 1 billion yuan last year, dwarfing all the other similar manufacturers in the city. 

Neoglory is a typical sort of Yiwu success story – a small, tight-knit family business that grew into a major manufacturer. 

Yu, 27, is the elder son of the group’s president and is poised to take over the family empire some day. Thirty family members operate different sections of the company, and most live on the top floor of the company headquarters. 

Like most first-generation merchants in Yiwu, Yu’s parents began their business in the early 1980s, making handicrafts like embroidered goods and shoes in a small home workshop and selling them to cities across the Yangtze River Delta. 

In 1983, when the Yiwu government built the first market for traveling merchants, Yu’s parents were among the first to set up a stall. 

In 1995, his parents borrowed several million yuan to establish their own factories and began selling ornaments and crystal glass to foreign traders. Today Neoglory Ornament is the largest ornaments maker in Asia, with 5,600 employees and total assets of 250 million yuan. 

“Yiwu was a poor agricultural area, and many farmers were forced to leave the land and try their luck at small workshops,” said Ma Lihong, deputy president of the Party School of the Zhejiang Committee of the Communist Party of China. “The city government developed the markets to serve them, and that’s how the big Yiwu marketplace began.” 

The marketplace prospered along with China’s economy. After the September 11, 2001, terror attacks, Yiwu’s markets became popular with Arab traders who found entry into the US more difficult. 

In 2005, the United Nations and World Bank designated Yiwu as “the world’s biggest wholesale market for small commodities.” 

Yu Jiangbo, general manager of Neoglory Ornament 

Shanghai Daily: What have you achieved during the past decade? 
Yu Jiangbo: In 2006, my mother, chairman of the company, recruited many professional managers to try to boost the sales of ornaments, but they all failed. At that time, I had graduated from the Imperial College in London, and my mother gave me a chance to be the general manager. I have managed to develop the company’s own brands, and our ornament sales have dwarfed all the other similar manufacturers in Yiwu. 

SD: What’s the biggest mistake most businesses in your area make in looking at the future? 

Yu: Most local companies do everything by themselves – from design and manufacturing, to marketing and sales. In the ornament industry, I think they should outsource the manufacturing to save labor costs and concentrate on design and marketing. My company did so beginning last year and has cut costs by 40 percent. 

SD: What would you most like to see in China’s development planning? 

Yu: The appreciation of the yuan in recent years has added pressure to the export of local ornament makers. I hope the government can do something, like export tax refunds, to relieve the pressure. 

SD: What’s your biggest concern? 

Yu: I am afraid the impact from the economic slowdown in Europe and the US is just at the beginning and may continue for a long period. 

Located in the middle of Zhejiang Province, Yiwu is more than 300 kilometers from Shanghai. 

Besides its famous wholesale markets, its economic base rests on industries such as knit hosiery, fashion jewelry and clothing accessories. It has also come to be called “sock town” because it makes more than 3 billion pairs of socks for Wal-Mart and other foreign buyers. 

In 2011, the city had industrial output of 141.1 billion yuan (US$22.4 billion), up 21 percent from a year earlier. The city has the biggest service sector in Zhejiang Province. 

Yiwu, founded in about 222 BC, also has a rich cultural heritage that includes traditional Chinese paintings and calligraphy, kung fu and folk arts. 


square kilometers 


registered population 

6 towns 

How to get there: 

Take a train from Shanghai Hongqiao Raiway Station to Yiwu. The No. 803 bus is needed to the Nanfanglian Station before having the Bus No.311/312/313 to the town. 

A drive along the G92 Expressway takes about 3.5 hours.

Another Indian trader goes missing in Yiwu

An Indian trader has gone missing in the Chinese town of Yiwu, after an unidentified man took him away from a local restaurant, in an incident that is set to trigger a fresh commercial and diplomatic dispute, amid already rising strains between India and China regarding the safety of businessmen in the southern trading hub.

Indian officials told The Hindu the trader from Mumbai, who was in Yiwu on a temporary visa, was taken away on the night of May 19. He has remained unreachable since then.

Two Indian traders, who were accused of owing Chinese suppliers 10 million RMB ($1.58 million), were kidnapped in December, and held for more than two weeks, before Indian officials pressured Chinese authorities to arrange for their release. Their case is now being heard at a local-level court in the nearby town of Jinghua.

The kidnapping of another Indian is set to further strain ties, particularly after the Chinese Foreign Ministry on Tuesday hit out at an advisory issued by the Indian Embassy here a day earlier, warning Indian businessmen of the dangers of doing business in Yiwu, a major trading hub in the southern Zhejiang province, after fresh cases were filed against the two traders.

“The Indian Embassy’s advisory isn’t conducive to resolving the relevant issue, and will also affect normal trade and economic exchanges between China and India,” Foreign Ministry spokesperson Hong Lei said at a briefing.

“We hope that India will view China’s handling of the case in a rational way,” he said, adding that China “always safeguards the legitimate interests of foreign businessmen, including Indians”.

Mr. Hong, in a briefing in March, called on Indian traders to honour their compensation commitments. The traders argued at a court hearing last month that they were only employees of the trading firm that owed the dues, with the Yemeni owner missing. One of the traders, Deepak Raheja, told The Hindu on Monday the traders had presented documents supporting their case to the court, and they had been hopeful of a favourable verdict.

A fresh case filed by suppliers in Yiwu at a local court in January, accusing the two Indian traders of owing a further 1.6 million RMB (Rs. 1.39 crore), triggered Monday’s advisory from the Indian Embassy, which warned of “a high possibility of fresh cases being lodged in order to exert additional pressure on Indian businessmen.”

The circumstances surrounding the disappearance of another trader from Mumbai on May 19 are still unclear, although indications are that his trading company had run into a commercial dispute with suppliers in Yiwu.

Dozens of foreign businessmen are reported to have been held captive by Yiwu traders when deals encounter problems. They are usually released after dues are settled and cases usually aren’t made public. Indian traders who are based in Yiwu have played down the cases, describing them as the norm in the entrepreneurial and often lawless business environment in many parts of southern China.

One Indian trader, who spoke to The Hindu, said kidnappings happen “only if you owe large sums of money.” “If you pay your dues, there is no problem, and Yiwu is a place where you can do a lot of business,” the trader from New Delhi said.

He added that several traders had expressed concerns regarding the advisory issued by the Embassy. “You cannot say the whole town is a bad place to do business because one or two people haven’t settled their dues,” he said. “We worry that this will harm the good business that several hundred Indian traders are doing here, with no problems.”

Indian officials said they have received panicked calls from more than half a dozen Indian businessmen in Yiwu, Shaoxing and some other trading hubs in Zhejiang and neighbouring Guangdong in the past year alone, after traders were held hostage because of payment disputes.

“Perhaps, this is a feature of doing business in the Pearl River Delta,” said one official in an interview earlier this year, referring to China’s southern manufacturing and trading heartland.

The incident may trigger a fresh dispute between India and China

Circumstances of the disappearance still unclear

Experts and Professors Shake Hands with Enterprises in Dachen Town_News_China Yiwu

Recently, the Bureau of Science and Technology organized an activity of “Shaking Hands” for the second time in 2012 between 15 experts and professors from the science research institutes and colleges like Yiwu Virtual Research Institute and Shenyang Institute of Automation Chinese Academy of Sciences Yiwu Center and the preventatives from 15 agricultural and industrial enterprises in Dachen Town.The economic development of Dachen Town started early. However, because of its single industrial economic structure, it needs upgrade and adjustment of industrial structure urgently. The most of the agricultural business are still in the basic form of cooperation between peasant households, and the condition of effective scale operation has not formed.Liu Jintu, the director of the Bureau of Science and Technology said: “at present, there are some projects cooperated by the agricultural and industrial enterprises and the science research institutes and colleges, but the full popularization of science and technology and then the transformation and upgrading of industrial economy still need many enterprises especially the outstanding representatives in each industries to set an example.” All of the institutions and colleges that participated in the virtual research center have strong scientific research strength, and the experts and professors of virtual research center are considered to be the best in each filed. This activity of “Shaking Hands” between professors and enterprises will make positive influence in improving Enterprise-University-Research Institute Cooperation and promoting the promoting the transformation of science &technology achievements.During this activity, the experts made investigations in the enterprises, communicated with the representatives of the enterprises, made analysis and guidance about the technological difficulties that the enterprises were facing, and proposed many constructive advices in the aspects of enterprise brand building and rational allocation of production procedures, which have laid the foundation of deeper Enterprise-University cooperation. Ji Shenlai     Zhang Chenlu


Yiwu community building a roadside Jingxian “trap”


  Street “trap” really scary

  Yesterday morning, the reader Mr.Gong call the Hong Kong Daily News Band of Brothers News Hotline 85.454 million reflect: Yiwu Beiyuan street construction village side of the road is suddenly exposed to a several-meter-deep “trap”, the man almost fall into a field.“Trap” in the embroidery Lake Secondary School to the corner of the construction of the village, usually every day, many secondary school students and parents via the junction, if a timely manner to the “trap” stamped in case someone fall into they do not get the timely rescue out what was in big trouble.

  【Reporter verify】

  ”Trap” mouth belly bulge

  Yesterday morning, the reporter came to Mr. Gong said that the intersection and found that the “trap” is actually a cellar well, the hole diameter of about 80 cm inside the inner diameter of 2 meters, 2 meters long of a bamboo pole actually probe is not in the end , it is estimated that there are several meters deep.

  Mr. Gong said yesterday morning, a young man living in three villages of the construction sent to the boss’s son secondary school Xiuhu, back, one foot in the “trap” Fortunately, the quick reaction did not fall into, but a semi-circular The gap appeared.

  ”Do not know which departmental management, nearby residents met with the heart very nervous but I do not know to whom the complaint.” Construction of village households Sheng British standard, “If the night was falling into the call for help no night was very dark.”

  ”It was horrible, the front of the shop there is such a will eat holes in the ground of the people.” Chen Chun and store more than 10 meters from the “trap” road, often passing through the intersection, did not expect so large a Yinjing actually thin thin piece of plywood for the cover, which also paved the thick layer of mud.

Yiwu enjoys sound momentum in seamless underwear production_Global Intimate Wear-Global Intimate Wear

Yiwu of Zhejiang, one of the biggest production bases of seamless underwear in China, has more than 70 enterprises involved in this kind of business.

Yiwu of Zhejiang, one of the biggest production bases of seamless underwear in China, has more than 70 enterprises involved in this kind of business.

In order to do the surveillance on the export of seamless underwear enterprises in the jurisdiction well, Yiwu Office of Zhejiang Branch, CCIQ has actively proceeded with the daily surveillance. The detail work are to help the enterprises better manage and monitor the running, to do the sampling inspection of raw materials and sewing products, to do safety control of the product quality source and the key links, to provide technology support, to help the enterprises avoid trade risks, accomplishing the good momentum of the export of seamless underwear.

According to the statistics, Yiwu Office of Zhejiang Branch, CCIQ had finished 992 export inspections of Seamless Knitting Apparel from 56 different enterprises, valued USD $ 44,826,000 by Feb 17 th, 2012.