How well are China suppliers coping with the global financial crisis? Our reporter recently attended Global Sources' spring China Sourcing Fair: Electronics & Components to find out the answer.

Biggest ever spring show, 80% exhibitors from mainland China

The spring China Sourcing Fair: Electronics & Components organized by Global Sources opened on April 12, 2009 and ran until April 15 at AsiaWorld-Expo, Hong Kong. The show featured over 2,500 booths from 13 countries and regions. The exhibitors were from Taiwan, Hong Kong, South Korea, the U.S., Italy, Israel, Australia, Germany, the Philippines, Japan, Singapore and New Zealand. Buyers coming to the Fair could find specialized product pavilions for computers & networking; consumer electronics; electronic components; digital entertainment; GPS; healthcare & personal care electronics; in-car electronics; interconnection technology; mobile phones; opto-electronics; power supplies; telecom & wireless products; and security products. Despite the global financial crisis, over 2,500 exhibitors participated in this Fair, making it the biggest-ever spring electronics show. The majority of exhibitors were from mainland China, accounting for 80% of the total.

"Despite the difficult market circumstances, the show featured 2,525 booths, an increase of 3% compared to the same period last year. It was our biggest-ever spring show," said General Manager of Global Sources Exhibitions, Tommy Wong. He stressed that the price of booths remained unchanged and many specialized product pavilions were sold out way before the show opened, such as the over 700 booths in computers and telecom products pavilions. Moreover, the in-car electronics and GPS pavilions had grown to be the biggest in Asia. Global Sources' Executive Director, Sarah Benecke, said "China Sourcing Fairs are an essential marketing channel for suppliers and buyers in this economic environment. Suppliers need to maintain a high profile and good relationships with their existing buyers. In addition, they need to strive for opportunities of face-to-face negotiation with new buyers from emerging markets."

Statistics show that 76% of exhibitors of this show were from mainland China. And among them 1,200 booths were occupied by Shenzhen exhibitors, accounting for 65% of all exhibitors from mainland China. Tommy Wong said since the financial crisis had reshuffled the supply market, suppliers and buyers who participated in the Fair were those with strength and quality. "Buyers are looking for new suppliers, while suppliers are also actively seeking new buyers," Wong added

Innovation: key for suppliers to counter crisis

We talked to many mainland China suppliers at the fair. As for the impact of the financial crisis on China, they said that they might be less affected, but there's no way they can stay away from it. In fact, its impact on China's economy is manifesting itself. Many companies now cannot raise enough capital and have difficulties in areas like product innovation and development.

What impressed us most at the Fair was a big banner that said "We are still here" – a notice that many of their fellow suppliers and competitors have been eliminated out of the market. Zhou Yi, Deputy General Manager of MenQ International Ltd, said challenges and opportunities always come hand-in-hand. In the current circumstances of slowing economy and weak capital market, many companies like these have grasped the opportunities and achieved success through adjusting development, investing in product innovation and improving services. They have grown even stronger despite the adversity.

Sales representatives from exhibitors like Huapu Digital and Yuanfeng International agreed that innovation is essential to the survival at these difficult times, and they were showcasing their innovative new products. Their successful stories told us that crisis is nothing to be feared. But when faced with crisis, China enterprises mustn't stick to the ways. They must change and innovate. Indeed, innovation has become suppliers' key to development breakthrough and prosperity amid the global financial storm.

Buyers looking for stable product quality

International buyers including 3M, Best Buy, Carrefour, Yamaha attended the Fair.

Intelbras, a top telecommunication company operating in Brazil, has been specializing in manufacturing mobile phones for many years. They started sourcing computer and security products two years ago. Business Development Manager, Juan Carrille, and his team are based in Shenzhen. They have been using Global Sources' services for their sourcing business.

Carrille said they have regained confidence as the economies in some regions are showing signs of recovery. And now they have higher interest to source from China. China-made products have an edge in price. But quality control is essential and China suppliers should pay more attention to it. China suppliers are now manufacturing good products, but they don't have stable quality control, which is what Intelbras is concerned about. But Carrille was pleased that China suppliers are improving. These suppliers have learned the lessons from Japan and Taiwan on the importance of stringent quality control and keeping product quality stable. He also revealed that since Intelbras is focused on the vast domestic market of Brazil, if there are quality problems with the products they sourced from China, they will need to return the goods all the way from Brazil, which is not cost-effective. Intelbras' factory in Brazil imports components from China. Before components are sourced, the company sends engineers and inspectors to check every production line and have a very strict quality control process for every shipment.

Global Sources is a business-to-business media company listed on NASDAQ. The company provides sourcing information to volume buyers and integrated marketing services to suppliers. The company organizes 11 specialized trade shows which run 32 times a year across 11 cities.

According to Wong, the number of international buyers participated in this Fair had increased as compared to that of last year. These buyers have one common goal: to seek more value-added, hot electronics products. And their principle is to source products of "high quality and low price". Now they are focusing more on the quality of products – and want the quality of China-made products to remain stable.