“Compared to the fierce domestic market competition, overcapacity, and saturated market space, the situation in foreign markets is better.” Reporters recently learned from several machinery manufacturing enterprises that the transaction volume of Quanzhou's mechanical and electrical products is quite active, and the export upward trend is obvious.

Data from customs authorities show that in 2014, the export of mechanical and electrical products from Quanzhou customs district was 205 million yuan, a year-on-year increase of 67.8%, with the ASEAN region ranking first in export destinations. Among them, Quanzhou's construction machinery exports performed prominently, with export destinations covering Southeast Asia, Africa, South America, the Middle East, Northern Europe, and other regions. The infrastructure needs of developing countries and the good cost-effectiveness of products are the “confidence” for Quanzhou's construction machinery to gain popularity in overseas markets.

Developing country markets have great potential

“In recent years, Africa's urbanization process has been very fast. Some experts predict that in the next 40 years, Africa's urban population will triple. The reality is that infrastructure construction in many African countries is still weak. To change this situation, urbanization construction is being carried out intensively, and for construction machinery, the market space is huge.” Mr. Chen, an industry insider with years of foreign trade sales experience, told reporters.

It is understood that in recent years, infrastructure investment plans have been successively introduced in Russia, Brazil, India, Vietnam, Thailand, and African countries, which has enabled the construction machinery industry, which follows national policies, to see prospects for expanding market space. These regions are increasingly becoming new export regions for China's construction machinery.

Since 2008, more and more construction machinery enterprises in Quanzhou have been布局 overseas markets, with export sales growing steadily each year, and this trend continues. “The company has fully expanded in South America, Africa, Southeast Asia, and other regions, with export volume increasing by 20%—30% annually, mainly because these developing countries have large demand. Overall, the international market sales trend is improving.” said Xu Rongrong, a salesperson at Changsheng Building Materials Machinery Co., Ltd.

Good cost-effectiveness is an advantage

“The initial motivation for us to go global was domestic overcapacity and economic pressure, which forced enterprises to go abroad. Of course, some enterprises took the initiative.” Ke Jinding, general manager of Jingong Machinery Co., Ltd., admitted that the company's layout in overseas markets is still advancing. Although export share accounts for only nearly 10% of the company's sales, going global is the general trend.

“In 2008, Quanzhou's construction machinery industry began to go global, but at that time, foreign markets did not understand Quanzhou products, customers had doubts during the ordering process, and opening up the market was slow and laborious.” Xiao Yiqing, general manager of Jinjiang Xiexing Machinery Development Co., Ltd., told reporters that initially, overseas customers ordered 3 to 5 machines with a try-it-out attitude. After use, they found that Quanzhou's construction machinery products were of good quality and much cheaper than European, American, and Japanese products. After several years of business expansion, products are increasingly recognized by the international market. “As far as I know, a small enterprise producing loaders sells nearly 300 units a year to Brazil and Ukraine.”

“Due to the limited economic strength of developing countries, they do not have much surplus funds to buy expensive European, American, and Japanese products. Therefore, Chinese construction machinery products with high cost-effectiveness are favored.” said the aforementioned industry insider Mr. Chen.

After-sales service is the core competitiveness

“Although export sales are still on the rise, profits are thinning.” Xu Rongrong told reporters that the reasons include the strong appreciation of the RMB exchange rate, the depreciation of currencies in emerging Southeast Asian markets, and rising labor costs, which are also a dilemma facing exports in the future.

“In order to maintain sales, we want to raise prices but worry that customers cannot accept it. Therefore, the impact of RMB appreciation can only be absorbed internally by the enterprise.” Mr. Chen said somewhat helplessly, “For machinery enterprises, what we can do is strive to improve product quality, reduce production costs, and at the same time develop new products, thereby increasing the prices of new products to replace old products.”

“After-sales service for products should also be strengthened.” Ke Jinding pointed out that construction machinery products are different from fast-moving consumer goods; their service life is relatively long. Selling a product is only the real beginning of sales. Manufacturers must consider lifelong maintenance issues, such as the placement of spare parts and the provision of after-sales repair services. Only by doing a good job in after-sales service can old customers be retained and new customers developed. On this basis, regional partners can be sought to expand sales channels.