“According to the latest news from the front line, the prices of sellers who started selling thermal insulation products to Europe in September have increased by about 15%-40%.” The Longchuhai Research Institute, which has been deeply involved in the European and American markets for many years, told Huxiu.
Recently, the European energy crisis has become the focus of global attention. As the temperature gradually drops, how Europeans spend the winter has also “broken their hearts” for the Chinese on the other side of the ocean.Various keywords such as “Europeans are buying Chinese electric blankets”, “French President Emmanuel Macron is wearing a turtleneck sweater”, “Qiuyi and long pants are selling well in Europe” are on the hot search.
All of a sudden, the Chinese “winter eight-piece suit” began to gain popularity in Europe. According to the relevant data of AliExpress, in October this year, the active search volume of European consumers for thermal underwear/qiuyiqiuku and other thermal products reached twice that of the same period last year, while flannel pajamas, “bare leg artifact”, Sales of domestic down jackets, domestic hot water bags and other products in Europe also increased respectively.
Some Chinese cross-border sellers also see business opportunities.
The GASMAN domestic down jacket brand, which originally mainly sold in the Russian market, also began to develop the European market this year. According to the brand manager Li Guibin, the European market grew very fast this year.
From this point of view, the export of thermal products to Europe has indeed become a popular business.
“But this is not the case for all categories, and it is still a short-term hard demand for the time being.” Longchuhai Research Institute told Huxiu that, according to its description, due to the stricter export policy of live products, the current demand for European thermal products is beginning to favor ” No electricity products”, the peak demand for electric heating series has passed.
“After Christmas, the advantage of these winter season products will take a dive,” it added.
Electric blankets are no longer as popular as rumored
Although various products such as turtleneck sweaters, “bare leg artifact”, hot water bottles, and electric blankets have appeared in the hot search of “Best Selling in Europe”, in fact, some categories are no longer as popular as described.
Such as electric blankets and other live products.
Before September, there had been some growth in such products. According to data from the General Administration of Customs, the number of electric blankets exported to Germany, the United Kingdom, the Netherlands and Italy in the first eight months of 2022 has reached a five-year high year-on-year growth rate. But in fact, compared to Europe, the United States is the largest exporter of electric blankets. In the first eight months of 2022, exports accounted for 60% of the total.
“For European countries, the procedures for exporting electrified and magnetic products are very complicated, and the surcharge is very high,” said Longchuhai Research Institute.
In addition, electricity is also included in the energy crisis. With the increasing electricity bills, heating by electricity is no longer a “replacement” for heating by natural gas, and the effect of saving living costs is also greatly reduced.For example, in Italy, which is currently the most serious, the electricity price has reached 3 yuan/kWh.
“The price of natural gas heating is not as exaggerated as the outside world, and it has basically risen by about 20%.” Many overseas students mentioned this when they communicated with Huxiu.
He Ling, an international student living in western Germany, told Huxiu that natural gas is generally used for heating in the local winter, and heating is generally supplied from mid-October to April to May of the following year.
According to the cost shown by He Ling to Huxiu, although the increase in natural gas prices has led to an increase in heating costs, it is still within the acceptable range.
“The previous rent price included heating costs. No matter how the price changes, there will be no more charges. The landlord has also signed a contract with the gas company for several years.”
He Ling said. “But they haven’t signed the gas contract after this year, so the price needs to be calculated after winter. Judging from the current notice, each person needs to pay 32 euros. In contrast, the electricity bill is more than 38 euros. Euro,” he said.
Many European students mentioned in their exchanges with Huxiu that compared with natural gas, the increase in electricity bills is not low, and using electricity instead of natural gas for heating is not a very economical way.
In addition to the same rise in electricity bills, the heating habits of Europeans also make such products less stamina.
According to He Ling’s description, local residents did not have many habits of heating with electric heating equipment before, and air conditioners were not common. In his eyes, he did not see how many people around him were using electric blankets, and the local mainstream supermarkets rarely sold them.
“The wave of demand before September was largely panic-driven,” said the Longchuhai Research Institute. In addition, it was not winter at that time, and the sellers of electric blankets had more time to transport a large number of products by cheap sea freight, which diluted the cost.
If you still plan to invest in the electric blanket business at this time, the time has passed. First, in order to catch up with the winter, it is necessary to use faster logistics methods (such as air freight, and sea freight will take up to a month at the earliest), and the cost will be higher. Second, the previous wave of output has digested a lot of demand, and there is not much room for re-entry at this time.
In this way, the export of electric blankets to Europe is more like a business with insufficient stamina. Tiger Sniff once asked about the four companies that produce electric heating products, and they all said that they have not received orders for exporting to Europe. In contrast, the United States has more orders.
Compared with electric heating equipment such as electric blankets, the life cycle of “non-electric products”/”heating products” seems to be longer.As small as “bare leg artifact”, hot water bottle, as large as thermal insulation wall materials, there is a certain increase in sales.
“The basic logic of these products selling well is that they can keep warm without consuming electricity and gas, and they are cheap and cost-effective. Europe itself is degrading consumption.” Wang Xiangqing, a big seller of clothing to Europe for many years, told Huxiu.
Like many overseas countries, Europe is also experiencing an inflation crisis. According to He Lingxiang Huxiu’s description, he can intuitively feel that the cost of living has increased by at least 20% this year. In the two shopping receipts from the same supermarket that it showed to Huxiu, in 2020, it cost 63 euros to buy far more products than this year’s 71 euros.
In this environment, consumption downgrade has become the main factor driving the growth of these low-cost thermal insulation products.
However, compared with some sellers who only pursue short-term business, some cross-border sellers are more ambitious, “We not only pursue short-term growth, but also want to take this opportunity to promote brand development, hoping to leave a brand impression on European consumers. “Li Guibin told Huxiu.
But perhaps for most cross-border sellers, whether this wave of trends can take the long-term route and the branding route is a big challenge.
First of all, in terms of categories, most categories do not have the conditions for branding, the production threshold is low, and the homogeneity is more serious.
In addition, from the perspective of sellers’ mentality, many sellers who want to end the market just want to make a wave of quick money, and their financial strength cannot afford the high cost of the brand line.
From the perspective of the environment, winter will end sooner or later. And in the long run, European countries are also looking for their own energy solutions. Recently, the energy agreement reached by Turkey and Russia has attracted much attention, and it is still unknown how long the energy crisis will last.
At present, most industry insiders believe that it is more stable to define this wave of growth as a short-term trend. With seasonal changes and changes in national conditions, there is a lot of room for future fluctuations.
There are many challenges for new players to enter the game
“At present, there are still a lot of small sellers who are fighting for the end. It is a good business to prepare a small profit for 100kg products, provided that there is this reserve.” Longchuhai Research Institute told Huxiu. Some time ago, there were not many sellers who consulted with them about European logistics, and many of them were sellers in other markets such as the United States.
But for these sellers, whether they can catch up with “this train” will have a certain test for their supply reserve capacity, logistics capacity and financial strength.
First of all, in terms of time, many industry insiders told Huxiu that early October is theoretically the fastest time to start, and it is too late to start rushing goods now. The first to gain benefits are those sellers who have already covered these categories or have already laid out their layout. As early as September, there was a clear rise in the wave of this stock.
For new players, if they do not use higher logistics costs to enter the market at this time, they are likely to miss the best time.
“At present, the more cost-effective way is air dispatch (air transportation plus delivery), and several air dispatch companies have also specially opened relevant logistics channels.” Longchuhai Research Institute told Huxiu.
When there is a sudden large demand, air transportation, express delivery and other methods are often more efficient means of replenishment for sellers. In addition, there are some signs of strikes at ports in various European countries, and the uncertainty of shipping is even higher.
Compared with international express forms such as air freight, air dispatch takes into account the time of customs declaration at the departure airport and customs clearance at the destination airport. Although the time limit is 3-4 days later, it is more suitable for transporting large quantities of goods due to its lower cost.
In addition to logistics, the biggest test also comes from the supply chain. Given that the current trend is growing faster, the ability to control inventory and respond quickly is key.
“The supply chain of down jackets is relatively traditional, and orders are mostly made on a quarterly basis.” Li Guibin said that this time he was able to enter Europe because the corresponding inventory was prepared as early as the first half of the year.
“At present, what we are most afraid of is overcapacity.” A manufacturer of turtleneck sweaters in Zhejiang told Huxiu that, in his opinion, this wave of demand in Europe can only last this winter, and some of the hot-selling thermal products are basically Without a high production threshold, once the peers are “rolled up”, everyone’s inventory will be a problem.
Wang Jian, member of the Standing Committee of the Jinhua Municipal Party Committee of Zhejiang Province and Secretary of the Yiwu Municipal Party Committee, also mentioned this issue publicly before, and suggested that sellers and manufacturers should stay awake and prevent overcapacity caused by blindly increasing production. Emerging industries, and further promote the optimization and upgrading of the industrial structure.”
For many new players who want to enter the game, another test is how to quickly adapt to the new market.
If you have already deployed in a certain European country, it is relatively smoother if you want to expand to other European countries. According to a number of industry insiders, the European regions are close in latitude and longitude, and have similar cultures. There is little difference in the market demand for products and marketing methods in different countries.
For sellers who have not deployed in Europe before, it is an essential process to re-investigate the market and improve products and marketing methods.
“We observed a fashion trend in Europe this year, which is that coats are getting longer and longer.” Li Guibin told Huxiu. It shared a detail. In previous years, on the streets of Europe, fashionable, thin and brightly colored coats mostly appeared in winter, but after the temperature dropped this year, more practical and warm coats have become more and more trendy.
According to a student in the UK who told Huxiu, many foreign students who did not wear down jackets in previous years have also prepared down jackets this year.
In general, although the threshold for thermal insulation products going to Europe is not high, it is not easy to quickly settle logistics, supply and design more suitable for the European market, and catch up with this train.