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Home » Opinion » Chinese Views
IT salesmen, shoppers like wolves and sheep
January 9, 2009, Friday
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Print Edition
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IT should have been a good year-end sales season for Huang Ping's IT products shop in Zhongguancun, Beijing's Silicon Valley.
But Huang didn't see a surge in sales. Instead, sales slumped almost one-third compared with the previous year.
She still felt lucky. "At least my business kept going ?? some shops could not survive and have gone out of business."
As the global financial crisis impacts economies around the world, Chinese enterprises are starting to suffer weakening demand, both internationally and domestically. As a result, Huang and her thousands of competitors in Zhongguancun technology hub are now facing a hard winter.
Huang's shop is in a popular electronics mall, Kemao Electronics Market. It sells notebook PCs, desktops and other IT products. Sales slumped dramatically after the snow and ice storms at the beginning of 2008 and the earthquake in Sichuan Province in May.
Huang had expected to celebrate high year-end sales, however, though recent sales were better than in previous months, it was lower than the same period in 2007.
Thanks to the decades of economic boom in China, Zhongguancun has developed into a modern urban area - a far cry from the bleak northwest suburb it once was.
It is crowded with China's IT giants such as Founder and Lenovo, as well as thousands of IT products dealers. With one-fifth of the total electronics in China, it is the biggest electronics market in the country and the IT market weathervane.
It once had heavy traffic jams and crowded electronics malls, but now the streets have few cars and the malls have few buyers. The people wandering the malls tend to be salesmen rather than customers. When a customer entered Kemao Market, a crowd of salesmen hoping to guide the customer to their respective shops, besieged her.
"Too many monks with too little porridge," said Huang, referring to the increasing number of salesmen and shrinking numbers of customers. "Now salesmen look at customers the way wolves look at sheep."
Wu Linguo, another electronics dealer who opened 22 storefronts in Zhongguancun, said that his company suffered a 30 percent decrease in sales in November last year, compared with the previous month, while December saw another 15 percent drop.
Industry insiders estimated a 30 percent drop of wholesale volume in Zhongguancun. "It's difficult to predict when the financial crisis's impact on Zhongguancun's electronics market will come to the end," said Xia Wenjun, vice president of Hilon Capital Management Corp Ltd that manages the Hilon Plaza - one of the most popular malls.
To spur the ever-shrinking market and lower overhead, most malls are cutting rent. Xia said rental of storefronts in Hilon Plaza would drop by 5 to 10 percent.
After prosperous times in 2006 and 2007, rent surged by as much as 40 percent since 2005.
(The author is a Xinhua writer.)
But Huang didn't see a surge in sales. Instead, sales slumped almost one-third compared with the previous year.
She still felt lucky. "At least my business kept going ?? some shops could not survive and have gone out of business."
As the global financial crisis impacts economies around the world, Chinese enterprises are starting to suffer weakening demand, both internationally and domestically. As a result, Huang and her thousands of competitors in Zhongguancun technology hub are now facing a hard winter.
Huang's shop is in a popular electronics mall, Kemao Electronics Market. It sells notebook PCs, desktops and other IT products. Sales slumped dramatically after the snow and ice storms at the beginning of 2008 and the earthquake in Sichuan Province in May.
Huang had expected to celebrate high year-end sales, however, though recent sales were better than in previous months, it was lower than the same period in 2007.
Thanks to the decades of economic boom in China, Zhongguancun has developed into a modern urban area - a far cry from the bleak northwest suburb it once was.
It is crowded with China's IT giants such as Founder and Lenovo, as well as thousands of IT products dealers. With one-fifth of the total electronics in China, it is the biggest electronics market in the country and the IT market weathervane.
It once had heavy traffic jams and crowded electronics malls, but now the streets have few cars and the malls have few buyers. The people wandering the malls tend to be salesmen rather than customers. When a customer entered Kemao Market, a crowd of salesmen hoping to guide the customer to their respective shops, besieged her.
"Too many monks with too little porridge," said Huang, referring to the increasing number of salesmen and shrinking numbers of customers. "Now salesmen look at customers the way wolves look at sheep."
Wu Linguo, another electronics dealer who opened 22 storefronts in Zhongguancun, said that his company suffered a 30 percent decrease in sales in November last year, compared with the previous month, while December saw another 15 percent drop.
Industry insiders estimated a 30 percent drop of wholesale volume in Zhongguancun. "It's difficult to predict when the financial crisis's impact on Zhongguancun's electronics market will come to the end," said Xia Wenjun, vice president of Hilon Capital Management Corp Ltd that manages the Hilon Plaza - one of the most popular malls.
To spur the ever-shrinking market and lower overhead, most malls are cutting rent. Xia said rental of storefronts in Hilon Plaza would drop by 5 to 10 percent.
After prosperous times in 2006 and 2007, rent surged by as much as 40 percent since 2005.
(The author is a Xinhua writer.)
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