Since the outbreak of the novel coronavirus in January 2020, it has triggered an unprecedented crisis worldwide. In the era of global economic integration, almost all countries cannot escape the impact. Massive job losses and business closures are reported frequently. Today, I would like to share with you my personal experience as a traditional silicone rubber product manufacturer during this period. I hope these reflections can inspire some new thoughts for entrepreneurs.
It is believed that in 2020, most enterprises, whether in the silicone rubber products industry or other industries, will encounter various problems to some extent. Perhaps the only industry that developed against the trend is the mask industry or the medical industry, right? This year, it is not about how enterprises can develop, but rather how they can survive. Behind every worker may be a family. During the epidemic, we did not abandon any employee. However, in the face of the huge impact that the epidemic has brought to the company, the company still needs to develop and survive. As for the silicone rubber products industry at this crossroads, how exactly can we break through the predicament?
Let me briefly introduce the general situation of our company. Our enterprise is a 25-year-old manufacturer of silicone rubber products, mainly producing automotive rubber parts, industrial rubber seals, and consumer electronics silicone rubber accessories. It is located in Weng City, Guangdong Province, a major manufacturing area. The company has manufacturing plants in Chang'an Town and Shatian Town in Weng City. In 2019, the company also opened a branch factory in Vietnam. In the silicone rubber industry, it can be regarded as a medium-sized or small-sized enterprise. In 2019, the company's costs continued to rise. Moreover, due to the opening of a branch factory in Vietnam, the company's financial pressure faced a severe test. We originally intended to make a comeback in 2020, but unexpectedly, we encountered the sudden outbreak of the epidemic. Because our company mainly provides automotive rubber accessory products for Japanese automobile manufacturers, due to the impact of the epidemic, most Japanese automobile manufacturers were basically in a state of shutdown. The company's largest customer, INOAC in Japan, significantly reduced its orders. This can be said to be an additional blow to the company.
First of all, we must not let go of any opportunity for cooperation. As the saying goes, "Don't neglect a small opportunity just because it seems insignificant." Sometimes, you might think that a small customer is of no consequence in the short term, but what you might lose could be a vast territory. You might believe that such a small customer might bring you unexpected surprises. A client we collaborated with last year, although the volume was not large, we still maintained high-quality service. Unexpectedly, in the first quarter of this year, they became our lifeline. Despite a significant reduction in overall order volume, their order volume continued to increase. To meet the delivery demands of the customers to the greatest extent, the company spent a large sum of money to purchase three sets of brand-new vacuum flat vulcanizing machines. Although the profit margin was not high, at least it could ensure that our workers had something to do.
Improving efficiency and reducing costs have always been the fundamental and consistent cornerstone for the continuous development of enterprises. Only in this way can our products become more competitive and find a way out in the fierce market competition. Previously, our factory in Shatian Town only had one small refining machine. The refined materials needed to be transported from the Chang'an factory to the Shatian factory. The process was slow and often caused machine shutdowns due to material waiting. During the transportation, the materials were also prone to contamination, resulting in an increase in product defect rates. Therefore, the company spent a lot of money to purchase a brand-new refining machine for the Shatian factory. This move greatly improved production efficiency and reduced production costs. Reasonable investment in hardware is also very necessary.
The traditional business model, which relied more on the boss's connections and referrals among acquaintances, can no longer meet the current market demands. Therefore, it is necessary to explore multi-channel business models. During the pandemic, a large number of internet enterprises led by Douyin and Taobao experienced unprecedented growth. A huge amount of traffic gathered here contained numerous business opportunities. Our company began to implement online promotion in 2018, which brought over 30% of the business volume to the company, which also partially alleviated the operating pressure of the enterprise.
Innovation is the key to maintaining a company's market competitiveness. The traditional strategy of relying on low prices for competition will only lead to a vicious cycle, ultimately harming the company itself. Companies need to have a sense of vigilance even when they are in a stable situation, and enhance their core competitiveness in order to remain invincible in the fierce market competition.
The above merely represent personal opinions. For more information about the silicone rubber products industry, please visit Yongyong Silicone Rubber official website at www.seidai88.com. Contact person: Miss Luo, 0769-87274491.
