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As production costs continue to rise, many companies are hesitant to increase their prices. The challenge lies in maintaining competitiveness in foreign markets and securing orders. At the second session of the 106th Canton Fair, exhibitors showcased various strategies to tackle these issues, including introducing cost-effective new products, incorporating “China†elements, and customizing global identities for their goods.
During the event, which ran from the 23rd to the 27th, three major categories—“Daily Use Consumer Products,†“Gifts,†and “Home Furnishingsâ€â€”were on display across 16 exhibition areas. Among the highlights were traditional export items like toys, which have long been a staple at the fair.
Since 2007, the European and U.S. markets have significantly raised safety standards for toys, increasing the entry barriers for Chinese manufacturers. This has led to higher testing costs, especially for small and medium-sized enterprises. According to Xu Hong, General Manager of Jiangsu Qintai Toys Co., Ltd., the testing cost has risen by 10%, meaning that 10% of each toy’s production cost now comes from testing fees. The company currently spends up to 100,000 yuan on testing, compared to just 80,000 to 100,000 yuan in the past.
Despite rising costs, companies are reluctant to raise prices. Xu Hong noted that current net profit margins are between 5% and 8%, but this is expected to shrink further as raw material and labor costs continue to climb. “The market is just recovering, and we can’t afford to raise prices,†he said. “Our quotes remain flat compared to previous periods.â€
To stay competitive, many companies are shifting from OEM manufacturing to brand-based production. Guo Jianhong, Business Manager of Nanjing Delta Toys and Gifts Co., Ltd., explained that when a customer approves a design, long-term cooperation often follows, leading to larger orders and higher profits. “It’s all about innovation and building trust with customers,†he added.
One example is Guangdong MingLang Life Products Manufacturing Co., Ltd., which introduced its self-designed “Light Life†product line at the fair. By hiring high-salary designers and engineers, the company focused on creating lighter, more cost-efficient products. The “Light Life†design incorporated traditional Chinese “windowless†art, reducing material usage and saving costs. This approach helped the company secure large-scale export orders.
Notably, products featuring “China†elements performed exceptionally well at the fair. Zhan Jianbiao, General Manager of Starco Porcelain Art Development Co., Ltd., mentioned that the “Dream of Red Mansions†story series sold over 5,000 sets within two days. The company also received $5 million in overseas orders, with more than half coming from the “China Wind†collection.
In addition, Christmas gifts are now being tailored for multiple markets. Pan Yong, Head of Fujian Deyi Group, revealed that instead of using only English greetings like “Merry Christmas,†they now include translations in Spanish, Portuguese, and other languages to better target regions such as Brazil, Argentina, Russia, Eastern Europe, and Southeast Asia. This localization strategy has helped them tap into emerging markets more effectively.
