What is the recent market quality trend like?

Will there be a significant year-end price reduction in just over a month?!

1. At the beginning of this year, following the lifting of pandemic restrictions in China, many factories exhibited unwarranted optimism by ramping up production to full capacity. However, overseas clients faced economic downturns, resulting in lower-than-expected sales. Consequently, factories accumulated excess inventory and had to resort to price reductions for stock clearance.

2. Midway through the year, factories sought to cut manufacturing costs by engaging in price wars and reducing product prices. The use of lower-quality raw materials, even subpar in some cases, for newly produced items led to an overall decline in the market’s quality standards.

3. Many small-scale suppliers and factories have initiated inventory clearance efforts and granted their employees time off. According to our survey, the majority of factories are set to commence their Chinese New Year break around January 20th next year. Additionally, some are considering transitioning to different business ventures in the coming year.

4. Towards the end of the year, suppliers are aggressively liquidating their inventory, potentially leading to low-priced and substandard products. This trend follows a cyclical pattern, and we anticipate gradual improvements in both price competitiveness and product quality after the months of April and May next year.


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