By Sheena on August 16,2016

Profits are shrinking for Traditional Yiwu Small Commodities

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 Year 2016 is a global sport year. COPA America Centenario, European Football Championship, and Rio Olympics Games are going on one after another. Yiwu market, which is served as the largest sourcing market for game items, has come across waves of suppliers for importing sports commodities. However, reports showed that the series of sports events didn’t make out too much profit for those small suppliers who are producing low value-added products with the cost surging. 

 
Profit margin has been going down the drain
 
“For us, the mascot order has been finished. There are lots of following orders,” Hong Chengfang said. Her company won the contract to produce Vinicius mascot orders for 2016 Rio Olympics Games. “In people’s eyes, we are lucky enough to win the Olympics orders. But what they never knew is that all those orders’ profit could only make the ends meet. Running the company on track is the only target for us now.” Hong told us. Meanwhile, the surge of Olympics orders could not save the slump economy of Yiwu traditional market. These years, labor-intensive industries have been facing a series of challenges including lacking innovation ability, low value-added products, rising cost and trade barriers. “As a matter of fact, our stuffed toys are making razor-think profit margins. Minus cost and expenditure, there is barely any profit left. We are nearly going through with the 3% -5% tax refunds from the country.” Hong complained. Although the Olympic Games economy exerted a certain stimulation effect on the sports-related industries in Yiwu, that didn’t work out anything. The whole Chinese manufacturing shared only a small share of the cake. Reported by some experts, Chinese manufacturers seldom got 10% of the profit cake. “Asides from the toy industry, other labor-intensive industries in Yiwu market encountered the same problem. We have to say, the profit margin has been going down the drain day by day.” Hong said. 
 
Sports Events Make Rare Difference to Boost the Market
 
As always, Yiwu market, as the world small commodities wholesale center, is acting as the supplier to different world events, or large festivals. However, those large events couldn’t get the Yiwu market economy back any better. For instance, the COPA America Centenario, European Football Champion and Rio Olympic Games didn’t make much difference to the staggering Yiwu market. All these three major events only boosted a little to Yiwu’s trade performance. 
 
However, Chinese manufacturers are still at the bottom of the profit pyramid. We don’t know how long the market could be making through. “According to the previous experience, international sports year can stimulate the market. But results turned out that this year’s sports economy only kept the even with last year.” A sports product supplier complained. The cost of resources and human are on the rise, and the international trade condition isn’t on the bright side, suppliers are hard to get through the dilemma. 
 
 

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