The ducks feel the water first: in a downturn, survive first
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
"The ducks are the first to know when the spring river warms."
As a business that faces consumers directly, we actually sensed as early as last September that trade wasn't going as smoothly as in past years. From then on the company kept trying new directions, and only early this year did we start to see a little improvement.
But these past few weeks, more and more friends and peers have been asking me: "How's business?"
Is it great? Compared with last year or the year before, it's below expectations.
Is it terrible? Honestly, we're getting by.
I want to use this chance to share some of what we're seeing in the industry:
Local wholesale and the Malay market
Since March, peers from the wholesale centres have been coming to us one after another to offload stock, and quite a few have said plainly: "After Raya, we're not going to carry on."
Malay clothing is a classic seasonal product. If it doesn't sell by the end of the fasting month, it basically has to wait until next year.
Some traders have even told us they can no longer pay wages.
Offline retail isn't looking good either
Foot traffic has come back, but malls are also looking for ways to make money. The most extreme case: we saw one mall running five different fairs at the same time.
Store sales were already a struggle, and now they have to share traffic with all these fairs. Too many monks, not enough porridge, and neither side does well.
Online is no better
With offline struggling, everyone has moved online. The result is fiercer competition, platform traffic split thinner, ad costs soaring, and conversion harder than ever.
Other countries? Same story
We recently went to the raw-material markets in Guangzhou, expecting them to be busy. Instead they were nearly empty.
Most materials were on clearance, with 60 to 70 percent off everywhere. Traders said they'd had almost no orders since Chinese New Year.
Because the materials are seasonal and autumn-winter starts in a month, they still have piles of spring-summer stock and have to cut prices to move it fast.
As for the future, they said: "We can't see it."
Factories are even more cautious. As long as there's work to keep the lines running, they're happy. They don't dare set targets for next season at all.
What to do in a downturn?
When I hit a problem, I like to ask people.
I'm lucky to have a mentor who lived through the 1997 Asian financial crisis.
He said: "What's happening now is child's play."
To him, my "haven't seen the world" anxiety is just a small episode in life.
He gave me some very practical advice:
"Survive first."
- Open the company's books and go through every expense.
- Cut what isn't necessary.
- Save whatever can be saved.
- Accept that sales may drop, but protect your ability to generate cash.
He told me: "Mindset matters. Don't look at all your problems at once; that only makes you more anxious. Break each problem apart, treat it as a separate event, and solve them one by one."
Several veterans around me with decades in business have told me this isn't the worst yet, and it could go on for a year or two.
But their decades of experience tell them that the market won't always be good, and it won't always be bad. The key is to see it as a cycle, get your mindset right and hold your pace. After all, when we feel winter's chill, it's also a sign that spring isn't far away.
I hope these small stories give you something useful, and I hope we can all keep steady, get through the winter in front of us, and reach our own spring.
"Brace yourself, winter is coming."