Many in the foreign trade industry are deeply feeling the intense competition now. What do you gain by only doing exports and not focusing on domestic sales? Mental exhaustion and a vicious price war.

A piece of land, whether farmed by one person or ten people, produces almost the same amount of crops. The more people involved, the poorer it becomes.

As long as a certain industry or market makes good money, many people will rush in like crazy. Once there are too many participants, competition naturally becomes extremely fierce.

Liu Qiangdong once said: "As long as a supermarket makes money, there will be supermarkets opening in every direction—east, west, south, and north—to crazily compete for profits." That’s exactly how it is, no exaggeration.

Foreign trade companies have moved into third countries. Chinese people are now directly going abroad to compete for business with their customers.

Bill had been working with his Mexican client for several years, sometimes generating tens of millions of orders annually. In a recent chat, he asked the client why there were so few orders, and why new product development had stalled halfway. The client said that his customers recently told him they wanted to shift focus to other businesses.

Chinese foreign trade companies are now stationed locally, visiting the end customers repeatedly. These companies ship large quantities of goods to the local market and then sell them at very low prices to different retail outlets. 

Since these Chinese companies don't need to pay taxes on imports, Bill’s client, as a middleman, simply cannot compete on price. Chinese foreign trade companies are now taking their competitive pricing overseas, cutting off Bill and his middleman client. Business is getting harder year by year, and the sense of crisis is overwhelming. Bill feels: Fewer competitors, and foreign trade would be easier.

Products undercut by low prices: Zhang was the first to get hold of a new product and listed it on Amazon, pricing it at $45. In the beginning, he got 5-6 orders a day, sometimes more than 10. But in a few days, a bunch of others started selling the same product. His competitors directly cut the price to $15, which wasn’t even enough to cover costs. Who would still buy the more expensive one?

"Foreign buyers don’t lack spending power; they could easily pay $45. It’s just that the competitors are too ruthless." As a result, Zhang had to keep lowering the price. After the price drop, getting one or two orders a day was good; sometimes, there were no orders at all. In June, his new listing made $20,000 in sales, but by July, sales dropped by about two-thirds. Zhang thinks: Fewer competitors, and foreign trade would be easier.

When customers learn to use Pinduoduo: Linda’s customer recently learned how to use Pinduoduo. After much inquiry, the customer finally admitted they found a supplier on Pinduoduo offering products for less than half of Linda’s price. Linda's price: $25. The customer: “How about $1?”

When Linda received this message, she suddenly realized that the essence of the world might be an endless bargaining game, like in India. As for why other customers didn’t place orders, one reason was that Linda’s product didn’t have any unique features, and the customer’s clients weren’t placing orders either. Linda’s company’s products were, in fact, very similar to what’s available on the market, making them easily replaceable. Linda knew that to surpass her competitors with upgrades and innovations, it would require cost and technology, which would be hard to achieve in the short term.

The fate of individuals in the midst of these changes in the times is truly beyond their control. The price wars have become so extreme that people are now selling at prices just to keep factories running. Especially large, powerful buyers who skip the foreign trade companies and contact the factories directly—it’s really tough.

Linda thinks: Fewer competitors, and foreign trade would be easier.

If you can't beat them, join them: Looking back at the boom in foreign trade 20 years ago, many people wanted to bypass middlemen. So the competition has always been there, and it will continue—relentlessly, constantly—until the surviving foreign trade companies and individuals are left.

- Why are so many companies forced into this vicious competition?
- Because they have nothing but low prices.

Without market or industry innovation, technical advancements, or quality barriers, your product is no different from the rest. The supply of similar goods increases, but the buyer’s market is limited, so price-cutting is the only way to gain more customers. Big fish eat little fish, little fish eat shrimp, and if shrimp don't want to be eaten, they must change.

Whether actively or passively, everyone is inevitably drawn into competition. To avoid being eliminated, the best defense is a good offense, so the competition continues. Compete in innovation, in building barriers, in branding, in supply chain management, in customer base, in collaboration and mutual benefit.

If others don’t have it, I do. If others have it, mine is better. Improve quality, optimize services, increase independent design, extend the industrial chain… There are countless ways to compete beyond the destructive price war. 

And for those who rely on low prices to undercut their competitors and temporarily capture the market, there will always be someone cheaper than you. There is no "cheapest," only "cheaper."