Gu Jiangsheng, Chairman of Zhejiang Gujia Craft Sofa Manufacturing Co., Ltd.
This has already surprised many Chinese manufacturing companies, especially for those export-oriented Zhejiang manufacturing companies, this will be a difficult task.
Use more than 3,000 cowhide a day
Reporter: As everyone knows, the financial crisis has hit China's manufacturing industry. Has this crisis been transmitted to the Gujia process?
Gu Jiangsheng: It is definitely impossible to say that there is no impact. As can be seen from the exhibitions of our trade fairs around the world, our exhibition area and the number of employees involved have shrunk considerably. This is mainly because, under the same conditions, exhibitors around the world spend more in this area. The bigger feeling for employees is that they don't have to work late. Fortunately, this year, the operating rate of the Gujia process has reached more than 90%.
Reporter: Is there a more visual way to explain the meaning of this data?
Gu Jiangsheng: The operating rate is like the occupancy rate of a hotel. The higher the occupancy rate, the stronger the profitability of the company. Our comparison is for a five-star hotel. It is generally believed that when a five-star hotel occupancy rate reaches 50% or more, the hotel can generate profits. In other words, the status of the family is like a five-star hotel with a occupancy rate of 90%.
Reporter: In addition to the occupancy rate, I also think of another data. It is reported that Gu Jia used 3,000 cowhide a day. Has this data changed?
Gu Jiangsheng: Basically maintain this level, but also slightly increased.
The proportion of internal and external sales has been significantly adjusted
Reporter: Gujia is an export-oriented enterprise. The consumption power of Europeans and Americans will determine the development of Gujia.
Gu Jiangsheng: After the Spring Festival, I went to the United States. I can feel that under the economic crisis, Americans have not lived well. This will inevitably affect the sales of our products. However, since 2007, we have shifted our sales of products from dependence on sales to domestic sales. This proportion has quietly changed.
Reporter: Please give us some data and what kind of changes have happened.
Gu Jiangsheng: When I was in the morning, I saw several sets of data. The proportion of foreign sales of the company has dropped from 70% to about 50%.
Reporter: What happened to the foreign sales direction?
Gu Jiangsheng: Indeed, in addition to changes in the proportion of domestic and foreign sales, the regional changes in product sales are also obvious. Sales in Europe and the United States have declined, while the share of Asia is rising. The United States is about 27%, Europe is 30%, and Asian countries and regions such as Singapore are about 40%.
Reporter: The financial crisis has enabled Chinese manufacturing companies, including Gujia, to start looking for new market opportunities outside Europe and the United States, generally reflecting a shift in Chinese manufacturing in the international market.
Gu Jiangsheng: This is a very real problem. For a long time to come, many companies will have more strength in domestic demand and their strength will continue to increase. At present, Gujia has opened 700 direct stores and franchise stores nationwide.
Have doubts about the expenditure of every penny
Reporter: When talking about a certain problem, you would like to add the words "as a private enterprise". Why do you emphasize the identity of private enterprises?
Gu Jiangsheng: Although private enterprises have many advantages, the advantages of resources are not obvious. The most important point is that the operation and management of most private enterprises are still extensive. Why do many private enterprises feel pressure to survive and some have closed down? The internal management is too extensive.
Reporter: Since the reform and opening up, especially in recent years, many private enterprises can be said to have grown up in the background of economic prosperity. They are rarely worried about order problems, and they rarely worry about the survival of enterprises. They rarely feel it. The existence of a crisis.
Gu Jiangsheng: This actually seriously weakens the competitiveness of enterprises. This crisis has made me realize that the competitiveness of private enterprises should be tapped from the inside. In the past, we were guided by “data authenticationâ€. As long as it is slightly profitable, spending money never cares. Now it is guided by "possible certification", that is to say, we have doubts about the expenditure of every penny, and doubt whether the expenditure of each penny is absolutely necessary. Through this adjustment of thinking, you can save a lot of money for the company, and these will eventually be displayed on the profit column of the book.
Reporter: Let us talk about other aspects of change?
Gu Jiangsheng: I just talked about one aspect. As far as the home is concerned, it can save about 5% of the cost in the manufacturing process, and in the manufacturing management process, it can save 3 percentage points. These are actually very simple. A master transforms the structure of a lower foot of the sofa, including the shape and material, and will have a surplus of 5 million yuan a year. If a company has a production value of 2 billion a year, a total of 5 points of cost savings, it can generate 100 million yuan in profits. It takes only half a day for a master to make similar technical changes.
If it were not for the financial crisis, many private enterprises would not really appreciate the true meaning of the phrase "to benefit from the inside."
In addition, companies should be cautious when receiving orders. Due to the rapid exchange rate changes and the pressure on some Western companies to survive, companies often have huge risks in accepting large orders. In order to develop, enterprises must first minimize the risk of trade. Under the financial crisis, entrepreneurs especially need to exercise restraint. They cannot forget the possible risks when they see large orders.
Reporter: According to public information, Gujia has 6,000 employees. The international practice is to save business costs through layoffs during the economic downturn and make the financial statements of the company beautiful.
Gu Jiangsheng: Actually, layoffs are not the best idea. Of course, in the process of process transformation, we really need to adjust the structure of the personnel. This requires removing some employees and absorbing a new batch of employees. The total number of employees is still the same, but the quality may be improved. It is.
I am a person without ambition.
Reporter: Gujia is not very competitive with foreign products in the European and American markets. Why do your products win?
Gu Jiangsheng: In Europe and America, Gu has never advertised. Our strategy is to participate in a wide range of exhibitions, which is a good way to attract customers, which is more effective than advertising. We participated in the exhibition and never hesitated to spend more money, more than the competition area of ​​the competition, and a team with a luxurious lineup. This is the case in the industry. As long as designers can participate in global exhibitions for five consecutive years, they can learn and edify. His creativity and thinking can be in line with international standards. We are not worried about the issue of competitiveness. On the other hand, although the company is a family system, the sales and design teams are employed by professionals in Europe and the United States. You know, we paid a lot for this.
However, I want to remind everyone that there is no way for enterprises to do OEMs, because the price dominance is not in their own hands. Even if the economy recovers in the future, don't expect OEM orders to continue to prosper. In addition, I can reveal that I wrote in the notebook at the beginning of this year that this year's sales increase is 15%. I think there should be hope for it.
Reporter: One topic that everyone likes to talk about is that the financial crisis is frustrating, but it provides opportunities for mergers and acquisitions in the industry. Do you want your family to invest in it?
Gu Jiangsheng: No, no. I am a person without ambition. In 2009, for companies, don't have too many ideas to make the existing companies solid. Our industry is very large, with a market space of several hundred billion yuan. Even if there is a crisis, the sales volume of the whole industry will drop by 20%, and there is no market. Therefore, what I want to insist on is to make a good job of doing a good job.
Reporter: This does not mean that you will not only do one thing forever. You also have a lumber mill in the northeast, and leather factories and sponge factories in other places. Are these strategies for companies to prevent risks, or are they making money themselves?
Gu Jiangsheng: Specialization in the strict sense is not suitable for China. For Chinese companies, every aspect of manufacturing can generate profits. Having such an industrial chain can create more profits for the company.
Gujia Craft Fundamentals:
Since its founding 20 years ago, the sofas, sofa beds, coffee tables and other living room products of Gujia Craft have been exported to more than 160 countries and regions in the world, including Canada, the United States, Belgium, South Korea, United Arab Emirates, Australia and other furniture importing countries and CARREFOUR, ATLAS , CSL, FOUR HANES and other well-known companies, while in the Netherlands, France and other countries have brand stores. In 2008, the sales of sofas in Gujia Craft reached 1.8 billion yuan.
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