Health & Personal Care Suppliers Keen on Keeping Prices Stable, Reports Global Sources11 Jun 2012 • by Natalie Aster
China suppliers of health and personal care products are facing a difficult year, with several factors hampering growth. Foremost among these challenges is the anticipated weakening of external demand in light of the economic woes of the US and the EU. Although several midsize and large enterprises see overseas revenue remaining on an upward track, the pace is expected to be slower than in 2011.
According to the report “Sourcing Report: Health & Personal Care” by Global Sources, rising manufacturing outlay is another critical concern, with suppliers keen on keeping prices stable to encourage purchases. Compounding this is the rising value of the yuan against the US dollar, which is cutting into margins and making China's products more expensive overseas.
Sourcing Report: Health & Personal Care
Published: March, 2012
Price: US$ 350,00
Suppliers are implementing a variety of strategies to enhance competitiveness and ensure continued export growth in the months ahead.
- Pressure from rising production costs and a stronger yuan is expected to push prices upward in coming months. Most companies, however, will be limiting increases to the 10 percent range as higher adjustments may discourage purchases further.
- To keep quotes under control, some companies are reducing the impact of the exchange rate on margins by using the yuan as a trade settlement currency. A few enterprises are also employing forward foreign exchange contracts to minimize the risk of profit loss.
- Many suppliers are looking to Asia, the Middle East, South America and non-EU countries for growth. Nonetheless, the US and the EU will remain key export destinations since demand from these areas is still considerable, even with the projected slowdown.
- Makers will be enhancing their capability to deliver products that will meet the requirements of various export destinations. Allocations for R&D are being increased to support the hiring of more technical personnel and collaborative projects with academic institutions.
- Selections for both the low-end and upscale segments will increase. Releases will be characterized by ergonomic structures, additional functions and better aesthetics.
- Besides offering a wider range of products, several companies are upgrading their QC capability. A few large makers have invested in facilities that will enable them to test products in-house.
More information can be found in the report “Sourcing Report: Health & Personal Care” by Global Sources.
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