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Why Does the Soaring Demand for Masks "Thin" the Money Bag of Manufacturers? _ Liu Wei _ Peng Kang _ This Market

BLOG_POSTED_BY Curry Curry     Sep 21    
Original Title: Why Does the Soaring Demand for Masks "Slimming" the Money Bag of Manufacturers? Author | Zhang Chao Editor | Luo Lijuan What is the necessary "three-piece suit" for going out? Ten years ago, your answer would have been: cell phone, keys, and wallet. However, with the increasing popularity of online payment and the normalization of epidemic prevention and control, the answer has now become: mobile phones, keys and masks. Masks have replaced wallets as just needed for travel. According to data from Alibaba Health, in the first six minutes of this year's 618 promotion, Tmall's pharmaceutical sales exceeded 100 million yuan, and the turnover in 10 hours and 6 minutes exceeded the whole day of June 1 last year. Among the popular health products, masks became one of the most popular commodities, with a turnover of 100 times that of the same period last year in the opening 10 minutes. On the platform of Jingdong, the sales of masks increased by more than 10 times during the whole period of 618; the sales of surgical mask produced by Zhuoer Medical Textile exceeded one million, ranking first on the list of hot-selling items of masks in Jingdong Mall on June 18. Contrary to the demand expansion, in the saturated supply side, "not so good" is the word that 618 mask manufacturers often talk about this year. The mask industry has not only lost the story of "getting rich overnight", but also it is not easy to maintain steady growth. In this competitive daytime chemical industry, can mask manufacturers make a profit? How will it stand out? Myth of "creating wealth" in the past Liu Wei, born in 1992, is a serial entrepreneur. After retiring from the army in 2014, he successively contracted construction sites in Hubei, opened game operation companies, and took over clothing stalls in Guangzhou, contacting many people back and forth. Until February 2020, Liu Wei's life changed, and opportunities and challenges came to him at the same time. After the outbreak of the novel coronavirus epidemic, what reached Liu Wei's ears every day, in addition to the rising number of confirmed cases, was the surge in orders for masks. Being in Xiantao, Hubei Province, the largest domestic and export mask producing area in the country, he began to observe the market situation with a keen sense of business. At that time, many people around me were reselling masks, the most common flat masks (ordinary masks) in the supermarket also need more than 1 piece, KN95 masks even as high as 15 yuan a piece. Recalling the craziness of the mask market two years ago, Liu Wei was amazed. After all, at that time, the cost of a piece of KN95 mask was only 2-3 yuan. Because of the scarcity of the market, it was fried to a "sky-high price". In the face of huge business opportunities, Liu Wei made a decisive move and found a vacant lot with his friends to build a mask factory, Hubei Model Protective Products Co., Ltd. Expand the full text Sterile Workshop of Hubei Model Protective Products Co., Ltd. In just 20 days, on Guihuatai Road in Xiantao City, a dust-free workshop of 1200 square meters and four large warehouses have sprung up, and the whole factory area has more than 20000 square meters. Such a construction speed may not be enough in normal times, but in that extraordinary period when people, vehicles and goods are difficult to pass, it is shocking. In order to ensure the production of masks, Liu Wei bought ten mask machines at a price of about 300000 yuan each, and his friends also sent ten mask machines in the form of investment partnership. In this way, they built 20 production lines together. I have invested more than 7 million yuan from building a factory to buying equipment, and most of it has been spent on buying equipment. Even though Liu Wei bought these mask machines at a premium of several times, he did not regret it at all, and was even glad that he had bought them earlier. "At that time, some equipment was fried to more than 1 million yuan, or even up to more than 2 million yuan." Why is the price of the machine so outrageous that some people are still rushing to get it? Liu Wei made a calculation at that time: If you earn 50,000 yuan a day, even if the machine costs 2 million yuan,Medical Full Body Coverall, you will earn it back in more than 40 days. In fact, it took Liu Wei less than a month to get his money back. There is no shortage of people in the market, and Peng Kang, who does business in Yiwu, Zhejiang Province, is one of them. Unlike Liu Weichu, Peng Kang came into contact with the mask industry as early as the outbreak of bird flu in Japan in 2008. All along, he has been cooperating with Hubei manufacturers to resell masks to customers. Although he has not built his own factory, he also maintains a certain inventory. In January 2020, Peng Kang, who was on vacation abroad, paid close attention to the news of the epidemic in China. He immediately distributed tens of thousands of masks in stock to some departments and friends in his hometown in Hunan in the form of donations, and then organized some goods to be sold to foreign customers. At that time, after donating masks, I bought 9000 N95 mask from customers in Hubei at the price of 7 yuan each, and then sold them abroad at the price of 30 yuan each. Even if the price is so high, Peng Kang clearly feels that the mask market is still in short supply. Stimulated by a friend who said, "Since you can get cooperation, it's better to produce it yourself." Peng Kang gritted his teeth and opened his own mask factory, Yiwu Baozhining Mask Factory. Due to the lack of congenital location advantages, coupled with the booming market,Medical Disposable Coverall, it is difficult to buy a mask machine in a short time, Peng Kang had to find a source of goods in Hong Kong. In March 2020, he bought two mask machines at a price of up to 600,000 yuan each. "I bought two at that time, and I couldn't buy a machine even if I had money." As a businessman who has been working for more than 1688 years, Peng Kang mostly deals in international trade, and his customers are all over the world. Based on the severe epidemic situation abroad, many customers initially signed N95 mask orders with Peng Kang, which forced him to spend more than 1 million yuan to buy an N95 mask machine and several 3D mask machines, and the investment in the machine was as high as 4 million yuan. Yiwu Baozhining Mask Factory Production Workshop But Peng Kang used only one year to earn back the cost of early investment, and also transferred some of the masks produced to his relatives and friends for sale. "I transferred the goods to my brother to sell, and now his Tik Tok sales reached 4-5 million yuan a month; another friend also took the goods from me and earned 10 million yuan." The myth of "creating wealth" in the mask industry is everywhere at the beginning of 2020. Subsequently, with the rapid response of the state, the epidemic was effectively controlled, and the supply of masks in the market became more and more abundant, which also meant that the mask industry was facing a turning point: in June of the same year, news about manufacturers turning from big profits to big losses continued to emerge, and a number of enterprises collapsed in 2021. Tian Eye Check information shows that in 2019 and before, the number of enterprises whose business scope includes "masks and respiratory protection" has been maintained within 1500, but by 2020 the number has risen rapidly to more than 7800, and in 2021 the number of enterprises cancelled has more than doubled, approaching 32000. Image source: Tian Eye Check It takes skill to "survive" and live well when the temperature drops rapidly. Liu Wei and Peng Kang happened to be a small part of the people who were favored. The tide receded After seeing many examples of mask manufacturers losing money in those two years, Liu Wei decided to stick to it. In his view, the reason why he invested heavily in the mask industry without experience came from the invitation orders issued by past customers. "At that time, although the orders were not so formal, unlike the purchase letters now, they would pay the deposit in advance." From hundreds of thousands of masks at the beginning to millions and tens of millions later, Liu Wei has never been short of orders in the process of building the factory. Peng Kang's situation is roughly the same. In the process of building the factory, he received orders for tens of millions of masks from overseas customers. There is no need to worry about the sales situation. When the market is in short supply, it is not difficult for orders to rise, but it is difficult to maintain profitability in today's saturated market. Liu Wei and Peng Kang attributed the secret to small profits but quick turnover and adjusting measures to the times. According to the different types, the common masks on the market at present can be roughly divided into: ordinary gauze masks, medical masks (disposable), industrial dust masks (such as KN95/N95 mask), daily protective masks and protective masks (against oil fume, germs, dust, etc.); according to the differences in appearance, masks include: flat, folding and cup-shaped. In the actual production and manufacturing process, KN95 Face Mask ,KN95 Face Mask with Five Layers, the mask is composed of two parts: the mask and the tightening belt. The manufacturer only needs to place the raw materials in the corresponding position of the mask machine. In general, one mask machine will be equipped with two staff members; in a few very skilled cases, two mask machines will be equipped with three staff members. Ordinary gauze masks, medical masks (disposable) and industrial dust masks, the biggest difference in the production process is the mask surface material part. To put it simply, the former (ordinary gauze mask and medical mask) is mostly made of the surface layer of spunbonded non-woven fabric, the filter layer of melt-blown fabric and the inner layer of spunbonded non-woven fabric, with a nose bridge in the middle; while the latter (industrial dust mask) often has an additional layer of activated carbon, or an additional layer of melt-blown fabric filter, that is, 4-5 layers. Although there are only one or two more layers of thin cloth, in addition to improving the protective effect, there is also a very big difference in cost. Peng Kang revealed that at present, the ordinary masks produced by his company generally weigh about 25 grams and cost about 6 cents a piece. Medical masks are only 1 cent more expensive, but the cost of a N95 mask is 1-1.2 cents. Ordinary masks produced by some non-standard small family workshops may weigh only 22 grams each, and the cost can be lower. Peng Kang said. This has also caused the retail price of masks to drop again and again. In addition, the cost of raw materials has been significantly reduced compared with the first half of 2020, which is also one of the important reasons for the decline in the price of masks. According to Peng Kang, among all the raw materials, the price of melt-blown fabric falls the most. In 2020, the purchase price can reach 700,000 yuan/ton, but now the price of the same product is only 15,000-16,000 yuan/ton. The price of non-woven fabric reached 80,000 yuan/ton at its peak, but now it is only 10,000-11,000 yuan/ton; Ear band once sold to 60,000 yuan/ton, but now it has dropped to 19,000 yuan/ton; including the peak price of nose bridge strip, it reached 70,000 yuan/ton, but now it only costs about 9,000 yuan/ton. Usually, one ton of non-woven fabric can make 500,000 masks, and one ton of melt-blown fabric can make 600,000 masks, "said Peng Kang.". In terms of cost, ordinary masks produced by Liu Wei cost an average of 4 cents, while medical N95 mask cost 40 cents. On Taobao, the price of ordinary masks produced by Liu Wei, 300 pieces of non-independent packaging, reached 22.3 yuan. If all expenses such as logistics and labor are taken into account, the overall profit of the company remains between 20% and 40%. The price of 300 ordinary masks produced by Liu Wei is only 22.3 yuan. An interesting phenomenon is that both Peng Kang and Liu Wei, even though they know that N95 mask can sell higher prices and have greater profit margins, have focused their production and operation on ordinary masks. I haven't seen the N95 mask machine in more than a year. Liu Wei said with a smile that at present, the demand for domestic orders is still dominated by ordinary flat masks. Peng Kang also lamented that he had sold two machines, "600000 bought one, sold at the price of 5000 yuan, no one bought it.". I won't sell it later. If there is an order one day, I will continue to do it, otherwise I can only be used as scrap iron. Fortunately, even if the machine was sold cheaply or idle, they did not lose money, unlike many players who followed the trend at the beginning, a large amount of money was thrown in, but failed to make waves. Peng Kang has heard the most exaggerated example is that in March 2020, a friend of his customized 12 melt-blown cloth manufacturing machines at a price of 5 million per unit. As a result, they arrived in June, missed the golden period of sales, and lost 120 million yuan before and after all kinds of expenses. Most of the laymen who poured in bought machines at high prices because they wanted to make quick money, and finally lost millions of yuan (many of them) for various reasons. "Peng Kang learned that such people were mainly concentrated in N95 mask manufacturers." If they made ordinary masks honestly and were not greedy, they would not lose money. ". Is it still a good business? Under the ongoing control measure, the mask industry is returning to rational development. According to the data of iMedia Consulting, the market scale of China's mask industry in 2020 has a substantial increase on the basis of the original continuous growth, reaching 71.41 billion yuan; in 2021, there is a certain extent of decline, but the overall market scale of the mask industry is still expanding. Image Source: Asset Information Network Some speculators are gradually eliminated because of the lack of stable sales channels and excellent technical strength, leaving only those players who can adapt to market changes and master the law of consumption. At this point, Liu Wei has already prepared for a rainy day. Before the outbreak of the epidemic, Liu Wei opened a number of stores on the e-commerce platform, but operated a middleman without source of goods sales model. In 2021, as offline orders cooled down, Liu Wei, who had a factory, shifted his focus to online and made his business bigger. From Pinduoduo to 1688, Taote and Tianmao, he continued to expand channels, and the daily turnover increased month by month. Only 10 minutes after the opening of the Double 11 pre-sale in 2021, Liu Wei's Taote online store received more than 6,000 orders, and the results were gratifying. After comparing the advantages and disadvantages of various platforms, Liu Wei found that Pinduoduo is more favorable for consumers. "The same product is cheaper, but the punishment mechanism for businesses is stricter." Amoy is more favorable for businesses. "Because of the advantages of the operation mode, in case of emergencies, the second-year communication is more timely and can help negotiate and solve problems.". Liu Wei cited an example that stores had been unable to deliver goods because of the epidemic in some areas, but Pinduoduo platform still punished the merchants for clicking on the delivery, "In fact, I only know whether I can deliver goods by clicking on the delivery.". On similar system issues, Liu Wei was fined hundreds of thousands of yuan, which directly led to his enthusiasm for operating platform stores greatly reduced. In addition, Taote has greatly reduced the logistics cost of the merchants because of its access to the rookie logistics warehouse. He simply calculated that from the warehouse to the nearby rookie warehouse, a whole truck of goods only cost 200 yuan. "The cost of each commodity may be less than 10 cents, and then I don't have to take care of anything, and the rookie warehouse delivery is cheaper than our own delivery." After weighing several times, Liu Wei put his focus on the operation of Taote store. At present, his company's online sales last month are about 2 million yuan, of which Taote orders account for 60%, Pinduoduo and Tianmao orders account for about 20% respectively. Although Peng Kang's company's monthly sales of masks are not so high, it has also opened online sales channels directly or indirectly on Taote, Jingdong, Tik Tok and other platforms. He concluded that the unit price of Jingdong commodities was higher, the explosive force of tremolo platform was better, and Taote showed small profits and quick turnover as a whole. In addition to increasing the possibility of channels, manufacturers also need to be flexible in the pattern and function of mask products. Since 2021, Liu Wei has received the demand for customized masks, that is, to produce joint masks with enterprises and institutions. According to him, this is the most profitable mask at present, with a cost of about 14 cents and a price of 4-5 cents. This summer, he also sold cool masks, which make consumers feel "cool" by changing the material of the skin-friendly layer. Since its launch, he has sold more than 2 million masks in a month, which can be regarded as the "hottest" mask this summer. In Liu Wei's view, although some people lose money and some people earn money, "demand may rebound", and the mask business still needs to be steady and steady. However, Peng Kang, who has earned a pot of gold, seems to have the idea of quitting. He doesn't think it's an evergreen industry, and he plans to return to his jewelry business as demand for masks may decline as the epidemic is better controlled in the future. Return to Sohu to see more Responsible Editor: (function() { function getBrandHtml() { var brands = [],Full Body Disposable Coverall, html = ''; for(var i = 0; i < brands.length; i++) { var brand = brands[i]; if(brands.length i+1) { html+= ''''; } else { html+= '''、'; } } return html; }; if(document.getElementById('linkBtn')){ document.getElementById('linkBtn').onclick = function() { $('#brands').removeClass('brand');$ ( '# tipInfo').text ( 'Real name responded'); $ ('#linkBtn').remove();$ ('.real-response .content').css('line-height', '20px');$ ('.real-response .time').css('line-height', '20px'); }; document.getElementById('brands').innerHTML = getBrandHtml(); }; })();。