Surrounded by plastic Christmas trees, wreaths, tinsel and flickering lights, Chen Xilin is holding up a box of plastic balls, some covered in glitter, others with seasonal slogans such as “Oh deer”. Behind him stands boxes of plain red and silver baubles but the ones he is showing me are pink, green, yellow and mauve with patterns.
“They’re painted by hand, each ball,” he says, adding that each worker paints hundreds of balls a day.
Chen is sitting in a booth in Yiwu Market, next to a shop selling Christmas trees and across the corridor from one specialising in elves. His family’s business is one of more than 600 in this city in eastern China which between them produce an estimated 80 per cent of the world’s Christmas decorations.
Chen’s mother runs the business, which includes a factory that employs about 400 people and supplies retailers around the world, including Ireland. He came home to work with her after completing a degree in political science at the University of Amsterdam.
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“Price is important because here in the market people offer a very, very low price for Christmas goods. But we don’t want to produce garbage. Our price might be a little bit higher than other factories but our quality is better,” he says.
Officially known as Yiwu International Trade City, Yiwu Market is the biggest small commodities market in the world, offering everything from clothes and jewellery to toys, kitchenware, cosmetics and office supplies. Low prices attract buyers from all over the world and the market sold an estimated $70 billion worth of goods in 2022.
Yiwu exports more than 20,000 types of Christmas products to more than 100 countries, with Europe and the Americas the most important markets for most producers. China’s manufacturing system and supply chain is the most efficient in the world for mass production of goods, including Christmas decorations.
Sun Yingfang started producing Christmas trees in 2004, employing about 100 people in a factory in Lishui, about 160km south of Yiwu. She has two kinds of customer.
“One category comes from countries with relatively good economies, and they have very high requirements for the quality and precision of Christmas trees. Their products are more complicated and time-consuming to make, so we will set a high price, which will give us a larger profit margin and motivate us to produce,” she says.
“The other category comes from countries with average economic conditions, and they don’t care about the quality of Christmas trees, they just want a low price. In this case, the product is not that complicated to make, but the profit margin is very thin. We are basically trying to balance it, with large orders for cheap products and small orders for expensive products.”
This is the quietest time of year for the Christmas industry, which only gets going around February, after Chinese new year. Many buyers come to Yiwu and tour the market, placing orders for what they see on display.
But Sun says that others come to Yiwu with ideas for what they want for next Christmas, often bringing samples of designs they want copied.
“Basically, they are products that are very popular in the domestic market that season, but the prices are too high and ordinary people cannot afford them. They ask us to copy them. Customers provide us with styles, and we produce according to their requirements. This product here, the pink Christmas tree, is very popular in South American countries this year, but we don’t know which styles will be popular next year,” she says.
“Our customers trust us. We are honest and responsible to our customers. Word of mouth is very important. We cultivate our customers through getting along with them over time. Some of our customers have been doing business with us for 20 years and our production plan is based on their orders. We don’t pre-produce the goods and store them in the warehouse for sale. So when our foreign trade orders are completed, our warehouse is empty.”
The manufacturers in Yiwu simply make and sell their products and it is up to the buyer to organise logistics including transport and customs clearance. Typically, orders are placed in February or March and shipped from China by July, sold by wholesalers to retailers between August and October and then put on the shelves for Christmas.
Christmas trees, lights and decorations are common in China’s big cities, particularly in high-end hotels, restaurants and shops. But Christmas is not a public holiday and in some parts of the country, celebrating it is frowned upon.
Although Communist Party members are forbidden from practising religion, Christian churches are allowed to operate under the supervision of the authorities. But some state schools have recently been discouraging children from marking western holidays such as Halloween and Christmas, urging them to celebrate Chinese traditions instead.
Wang Chunxiao has been producing Christmas accessories for 17 years, selling mainly to customers in South Korea, Japan and South America. She identifies the basic elements of Christmas products as elk, snowmen, Santa Claus and red stockings and says Chinese manufacturers tend not to come up with new alternatives.
“Christmas is a Western holiday, so we are definitely not as innovative as foreigners in this regard. The efficiency of the Chinese is obvious to all, and the price is competitive. But we don’t have much advantage in the innovation of Christmas products,” she says. “South American customers bring new products of the season from Italy or Spain, and ask us to change the details a little bit, and then they will use them for the next season. Fashion is a cycle, and the products that are popular this year will become popular again in a few years. Changing a little bit around the edges and corners is not considered to be plagiarism.”
A number of manufacturers in Yiwu say that insofar as there is a trend in Christmas decorations it is away from the traditional green and red towards pastel colours. Wang says that customers are increasingly looking for higher quality products and custom-made items but she only accepts big orders.
“We all keep records of our customers’ purchases, and reviewing these records helps us sort out the trends and preferences of our customers. For example, some customers like gold, silver and red, some like white and champagne colour. Customers decide,” she says.
“But quantity wins over everything. We don’t accept small orders. Generally, the minimum order is one container. Small orders are meaningless because the unit price cannot be lowered. Because the people who buy goods from us are wholesalers, we have to make money, and they have to add profit to the goods when they ship them back to their countries. Everyone has to make money.”
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