Enter Tax-Free Channels“ Another Possibility And Thinking Of "The Rise Of National Brand"

On May 10, the four-day first China International Consumer Goods Fair came to an end. In the exhibition halls 7 and 8, the elegant and exquisite exhibits of Manchu embroidery, Nanyang Jianzhan, Quanzhou white porcelain and Jingdezhen blue and white porcelain attract visitors to stop. Almost every tea drink tasting booth has a drinker. However, compared with the flow of people in the fashion life exhibition area of hall 5 and the jewelry exhibition area of hall 2, the popularity here is still a little lower.

"Developed countries have created high-quality and good price goods or brands through scientific and technological innovation, making many Chinese consumers become loyal customers of foreign brands or high-end goods, forming a huge consumption spillover." Chen Wenling, chief economist of the China International Economic Exchange Center, pointed out that China's manufacturing industry has accounted for 30% of the world's total, with 49 major categories, 207 medium-sized categories and 666 small categories, but it is still in the middle and low-end of the global industrial chain. In the future, we must rely on high-quality development of the manufacturing industry and seize the commanding heights of competition.

In fact, the quality of China's goods has become better and better, and the younger generation of Chinese people have a certain degree of brand awareness, but in terms of entering the overseas market, brand upgrading and marketing channels still need to be improved.

Strong domestic demand supports domestic brands

"The products selected by us are outstanding in each industry and category, which can help us to develop the domestic and foreign markets of Liaoning manufacturing." Li Zhi, deputy director of the exhibition industry development department of Liaoning Provincial Department of Commerce, told reporters that according to the orientation of "high, new, excellent and special", Liaoning has selected Zitao, Yingkou piano and other characteristic products and time-honored brands to participate in the exhibition.

The reporter saw on the scene of the consumer Expo that the local provinces, cities and autonomous regions that participated in the exhibition brought "business card products" and "fist products", such as Shoushan stone, oolong tea, Pianzihuang, Inner Mongolia woolen blanket, Jiangxi hemp embroidery and other local characteristic products, as well as fashionable scientific and technological consumer goods such as bags, robots and automobiles. Several consumers directly bought the exhibits at the scene.

"There are a lot of consumers to buy, but they are mainly retail, and there are few large purchasers." Two Jewelry Stand staff told reporters. During the interview, the reporter also found that "business card exchange" and other scenes mostly occurred in hall 3, hall 5 and other international famous pavilions, while local pavilions No.7 and No.8 often saw individual consumers making inquiries or even bargaining.

However, this does not mean that there is no opportunity for domestic brands. With the support of strong domestic demand, there is a great space for the development of domestic brands. Long Guoqiang, deputy director of the development research center of the State Council, believes that at present, China's resident consumption rate is less than 40%, which is significantly lower than that of countries and regions with similar development level in the world, and even lower than that of developed countries. Therefore, China has great potential to expand consumption demand.

In fact, in recent years, the spectacular national trend has repeatedly highlighted the consumer's preference for domestic brands, but how to seize the market for domestic brands has always been a topic to be discussed and solved.

Chen Wenling pointed out that the future must rely on the high-quality development of the manufacturing industry and seize the commanding heights of competition. "To form a new development pattern, the demand side needs to promote the structural reform of the supply side through its endogenous impulse, forming industrial upgrading and technological upgrading, organizational management upgrading and market upgrading."

In fact, supply side structural reform is one of the main topics of economic development in recent years. Long Guoqiang also proposed at the "global consumption innovation and tax-free and tourism retail conference", the main forum of the consumer Expo, that we should grasp the quality orientation of consumer demand upgrading, comply with the digital transformation and green transformation of consumption, and realize a virtuous circle of supply and demand at a higher level.

Tax free potential opportunities

The holding of the Fair provides another perspective for the rise of domestic brands.

"Domestic brands will certainly grow rapidly in the next 10 or 20 years." Zheng Mingju, managing partner of China retail and consumer industry of anyong University, believes that domestic brands need some time to learn from foreign brands with the help of platforms such as the consumer Expo.

"The fair plays a key role in promoting China's excellent consumer brands to the international stage." Yu Yan, an Yongda's China government and regional economic consulting service partner, believes that after the epidemic, more and more international tourists return to Hainan and other parts of China. For them, buying duty-free goods must be aimed at Chinese brands. Which brands may be favored by the duty-free market? Hainan, where duty-free operators gather, is undoubtedly the earliest and largest "training ground". This is also the careful thinking of many domestic brands when entering the consumer Expo. They hope to test the water here and be ready to enter the international market.

Hainan Xiangshu Chenxiang group has set up exhibition stands in hall 5 and Hainan Province exhibition area. Ding zongmiao, chairman of Hainan Xiangshu Chenxiang group, told reporters that after the end of the consumer Expo, its stores in Sanya marine tourism duty-free city will also officially open for operation“ Entering duty-free shops is mainly based on the consideration of customer flow and credibility. " Ding zongmiao believes that tax-free stores have a large flow of customers and can attract more consumers through some profit sharing measures. In addition, the products of duty-free stores will be more demanding than those of other channels. Entering duty-free stores will increase brand awareness and give consumers and the market more confidence.

Yu Yan believes that the design, quality and service of domestic brands will be paid attention to by putting domestic brands in tax-free channels and consumer Expo, which is also an opportunity to promote domestic brands to international tax-free channels.

"We can't always talk about" foreign inventory ", and" de Stocking "of domestic brands is also a very important aspect." Xie Xiangxiang, vice president of the school of tourism of Hainan University, stressed in many interviews that the expansion of commodity categories of duty-free shops should also provide opportunities for domestic brands. In Xie Xiangxiang's view, will Hainan's departure tax rebate quota and list for domestic products change with the overall tariff reduction in the future? This can be considered in the system. This involves two issues: Treasury revenue and expenditure and consumers' purchase. If a balance is found between the two, Hainan can not only become a channel to buy foreign goods, but also an important window for foreigners to buy high-quality goods in China.

Ding zongmiao also mentioned that Hainan has its own special policies and systems. If the local characteristic products are promoted through tax-free channels with large passenger flow with the help of government support, domestic brands will develop faster.

On March 13, 2020, the national development and Reform Commission and other 23 departments jointly issued the implementation opinions on promoting consumption expansion and quality improvement and accelerating the formation of a strong domestic market. It was proposed that a certain area of domestic commodity sales area should be set up in duty-free shops, and relevant enterprises should be guided to develop high-quality and characteristic domestic products for tax-free channels, so as to build duty-free shops into high-quality products supporting domestic products It is an important platform for displaying independent brands and spreading national traditional culture.

Domestic brands don't know about tax-free channels

Although the policy is good, it is not easy to implement it. Moreover, there are still many problems to be solved when domestic brands enter duty-free stores.

Chen Ping, general manager of Yili Xijun Garment Embroidery Co., Ltd., told the story of the company's cultural and creative products entering the duty-free shop. They entered the port duty-free shop in Horgos as early as 2017, but were forced to withdraw a year later. After quitting, they began to sell in the commercial area next to duty-free shops and cooperated with a cross-border e-commerce platform. Before the outbreak, foreign customers accounted for 50% of the total sales“ In the pilot Free Trade Zone, there are some Russian traders who operate in duty-free shops abroad, but their purchase volume is larger than that of our duty-free shops at ports. Some even went directly to our factory to purchase, the effect is very good. "

"At the beginning, they took a fancy to our handicrafts, but the profit margin was too low due to the low price of the intermediate agent. At that time, the products were not exquisite enough, so they were withdrawn. " Chen Ping said.

However, only a few domestic brands like Chen Ping enter duty-free stores. The reporter found that many domestic brands did not know about the tax-free channels, even confused with general trade.

"I don't understand the concept of tax exemption."“ Who should I go to when I enter the tax-free channel? How can I get in? "“ Do you have any resources to introduce? "The reporter asked the responsible persons of more than ten domestic brands in the exhibition area, and they all expressed the same confusion.

In addition, the lack of operation experience, price attraction and brand awareness also limit the pace of domestic brands entering duty-free stores.

Chen Ping also mentioned many times in the interview, "our enterprise itself is not willing to do its own sales, we can do production, provide products, and the third party has resources to help us sell and operate."

Keith Tam, vice president of strategy and business development of DFS group in China, believes that the only difficulty for domestic brands to enter duty-free stores is that they are not tax-free. However, he also said that Chinese consumers are very interested in domestic brands in the past two years, and there is still a lot of space for domestic brands. In the future, he will also pay attention to some high-quality Chinese brands entering DFS duty-free stores.

Jessica's Secret CEO Wang Meng once told reporters that the general duty-free shops are high-priced brands with high visibility. At present, the price and brand awareness of domestic brands are not enough, so we need to do a good job in brand cultivation.

Chen Ping believes that we still need to catch up on the quality of our products. They have made a lot of attempts now, and still hope to continue to operate in duty-free shops. "Our products should not only make money, but also be recognized by the society."

It is gratifying that the first China Consumer Expo once again built a bridge for these intangible cultural heritage to enter duty-free shops. Chen Ping said that on the launch day on May 7, a Russian buyer operating duty-free shops had been contacted.