I just returned from the Canton Fair. I was there for all five days of Phase 2 and had occasion to talk to quite a few vendors. One question I often ask vendors is how business is compared to a year ago, or even five months ago – since the spring fair. Most vendors said that business was not good and the figure I got from several vendors was that booth visits were down about 30 %. Some halls seemed busier than others but by the last day all of the halls were somewhat empty. The concierge at the hotel told me that it used to be that people would stay for the entire fair but now they attend for a couple days only and then leave. Like everything in China, the Canton Fair is changing as well.
One day I walked over to the Jin Han fair, a parasite fair next to the Pazhou complex and I was shocked at how empty it was. This was my third or fourth time at the Jinhan Fair and this was emptiest I had ever seen it. I can imagine that some vendors at the fair did not have even one visitor. It was that empty.
When I called an old friend of mine in Shanghai, Nat, to catch up on things he told me that the 30% figure I had heard from vendors was accurate. He is in the paper industry in China– he supplies the companies that make corrugated cartons – and told me that mills are carrying a lot of inventory nowadays. He added that some of China’s largest paper mills are closing factories because of the reduced demand for corrugate from both inside and outside of China. When I told him that China’s growth rate this year is forecast for 9 % he said that much of that will be due to a busy first two quarters. Since the summer business has fallen off considerably and he said he would not be surprised if China’s growth rate then is only 4-5%. Nat has been living and doing business in China for 15 years and he seemed genuinely concerned about the situation in China– growing inflation and shrinking exports.
One other thing I noticed at the fair this time is that there were many more mainland buyers than usual. I saw quite a few of them. This is testimony to the increasing consumer demand coming from within China.
I received an email a couple weeks ago from one of my customers who is going to be at the Canton Fair and she asked me if it was OK to go cold. In fact, a lot of people attend the fair without ever having so much as looked at the Canton Fair exhibitor’s list. A company I used to work for was like this. When they attended the fair there was absolutely no preparation at all – unless I was going with them. Why someone would want to plop down $ 5,000.00 to attend a trade fair but not prepare for it I have no idea.
In fact, one of my favorite pastimes at the fair is to see who on the fair shuttle bus has prepared extensive notes on vendors and mapped out the show. You can always tell who is prepared and who is not. The women are much better than the men at this and the Europeans better than the rest of the world.
Most importantly, if you go to a trade fair without any preparation then you are increasing your risks of a disaster at production time. In fact, there are many vendors at the trade fairs in China and Hong Kong that you would just not want to do business with. These vendors are synonymous with bad quality, late delivery, poor communication etc. You can begin the process of eliminating bad vendors by contacting them before the show. Vendors that do not reply to your emails, even after several attempts on your part are not vendors you want to deal with. Vendors that reply to your initial inquiries but then disappear after you ask them to quote on a product or make a sample for you to review at the fair are not vendors you would want to deal with. Giving people the benefit of the doubt has its risks.
Over the past month, in preparation for my trip to Guangzhou, I have reached out to over one hundred vendors of toys and plastics . Of these one hundred I would say 10-15 have turned out to be pretty good at communicating and showing interest in developing a business relationship with my customer (s). But among the companies I have reached out to so many have proven irresponsive or simply not helpful to the point that I would not recommend dealing with them. Would I have known this had I not reached out to them? Yes, but only after a frustrating and costly sample or production order.
I do not envy the overseas buyer who will meet vendors like this at the fair and who, after receiving promises of low cost, quality product and cooperation will return to his/her respective country feeling that they have found a good vendor in China only to realize, after their order is a month late and they have lost an important customer, that this was not the case.
I am about to head off to the Canton Fair. This will be my first visit to the fall Fair in a few years and I am excited. The weather in Guangzhou is very nice in the Autumn – in contrast to the spring when it rains almost every day – and the October fair is generally better attended than the April fair ( though there is no shortage of people at either fair).
As preparation for my visit I am reaching out now to vendors for samples/quotes on behalf of a couple of customers. By doing this I am beginning to get a good idea – even before I am in Guangzhou – of which vendors might be good to work with and which vendors I would want to avoid. As is usually the case many vendors I send out inquiries to neglect to get back to me – even after two or three attempts on my part to contact them. This tells me of course that this is probably not a vendor I want to work with. But I will nevertheless stop by their booth, talk to them and collect their name card. If the email address on the card is the same as I have on file, this will be the “kiss of death.” I always say that if a vendor is not good at communicating when you are showing interest in doing business with them, then imagine how difficult it might be after you have given them a 30 % deposit on an order and they have lost 30 % of their incentive to follow up with you. It is best to avoid vendors like this.
Other vendors are very helpful, offering quotes and samples by show time. Pre-fair sampling not only gives one a good indication of vendor responsiveness but by having vendors bring samples to the show – which you can collect and take back with you – you can not only save on expensive air freight to ship samples from China but you have a great opportunity to discuss with the vendors all production problems associated with your product. Needless to say it is better do discuss these problems face-to-face than in an email.
In total I have contacted probably over 100 vendors so far for this show, on behalf of two clients. It is a lot of work. But it is worth it.