Instrumentation procurement: price competition is a double-edged sword

Introduction: The relatively low production cost has always been an important advantage for a large number of Chinese export enterprises to win overseas orders. Since the beginning of this year, as overseas demand has weakened and order competition has become increasingly fierce, it has become a realistic choice for many exporting companies to reduce prices and increase competitiveness. However, some overseas buyers here stated in an interview with reporters that when selecting suppliers, The primary consideration for them is not the price. Exporting companies to win orders is not "the lower the price, the better."

Industry sources said that overseas procurement is the most concerned about quality, and companies blindly pursuing low prices may instead miss orders.

All along, the relatively low production cost is an important advantage for a large number of Chinese export enterprises to win overseas orders. Since the beginning of this year, as overseas demand has weakened and order competition has become increasingly fierce, it has become a realistic choice for many exporting companies to reduce prices and increase competitiveness. However, some overseas buyers here stated in an interview with reporters that when selecting suppliers, The primary consideration for them is not the price. Exporting companies to win orders is not "the lower the price, the better."

Weak competition due to weak orders

Since the beginning of this year, affected by factors such as weak international economic recovery and appreciation of the renminbi, the growth rate of China’s foreign trade exports has dropped significantly. From August to November, the year-on-year export growth rate for the single month was 24.5%, 17.1%, 15.9%, and 13.8%, respectively. Four months of decline. Taking the machinery manufacturing industry as an example, statistics from the China Machinery Industry Federation show that from January to October, the export value of China's machinery industry increased by 24.67% year-on-year, a decrease of 10.75 percentage points from the same period of last year.

The weak growth of export orders has made the competition among companies increasingly hot. It is worth noting that many small and medium-sized export enterprises are hoping to find orders as soon as possible because of funds and business pressure. In order to fulfill orders, some companies are “hungry for food”: profits are thinning, and the amount is no longer small. In the case of shrinking orders in Europe and the United States as a whole, it has become a realistic choice for many companies to seize the advantages of lower quotations and try to “live” orders as much as possible.

Low price "grab orders" difficult to bear fruit

However, the low-price strategy does not seem to be able to bring orders for “help” to enterprises. During this time, some overseas buyers said in an interview with reporters that the first factor to consider when choosing a supplier is not price, and that export companies want to compete. Winning an order is not "the lower the price, the better."

According to Li Tao, a procurement engineer at Sartorius Scientific Instruments Ltd., which manufactures high-precision metrology equipment, the first consideration of suppliers is whether they can better provide global services and their overall service levels. price.

In fact, in actual procurement options, the supplier's quotation is not as low as possible. Du Bingyun, a development engineer at Canada's Xigang Innovation Corporation's manufacturing and supplier, revealed that, in general, suppliers need to provide reasonable quotations based on a detailed study of the buyer's design drawings and multiple communications. To quote a very low price, it will make us think that it does not really understand the demand. "Compared with the price of quotation, we are more concerned with the composition of the quotation. Is it clear? If expensive, where are you?"

Long-term follow-up observation of manufacturing MFGs by buyers and suppliers. According to Hu Jingke, sales director of COM Asia Pacific, according to his many years of industry experience, no supplier is favored by buyers because of low prices. The only decisive factor for manufacturing companies to obtain orders is their professionalism.

Overseas purchasing is most concerned about product quality

What should arouse the attention of exporters is that blindly pursuing low-cost advantages may instead miss orders. MFG. COM Asia Pacific Sales Director Hu Jingke said that for overseas procurement managers, the quality defects of the purchased products are likely to cause them to lose their jobs. Therefore, their most concern is product quality, while ensuring the quality at the same time ensures that the quality is seen by many buyers in Europe and America. “Impossible to complete”; In fact, when some buyers make choices among suppliers’ quotations, the first one to be eliminated is the one with the lowest price.

For the “price war” among similar exporting companies in China, Li Tao, a procurement engineer at Sartorius Scientific Instruments, believes that suppliers should focus on providing better products and services to their customers. “Price competition is a double-edged sword. Sword, if we all pick up this sword, the final result may be that all parties are stinged and bruised. "Suppliers can only gain a place in global competition by improving their overall strength."