Author | Li Chengdong

Dong's Notes Issue 146 (Dinner Notes):

The 106th Dong's Dinner (Guangzhou Edition). This dinner mainly discussed the current market situation, challenges, and opportunities of multiple industries in the global economic environment, including apparel, e-commerce, AI content creation, watches, medical aesthetics, the Southeast Asian market, the cosmetics industry, and global market business opportunities.

Note: The following content is desensitized and summarized.

1 Current State of the Apparel Industry: Severe Market Decline

China's apparel industry is experiencing declines in both volume and price, with an overall industry drop of 20-30%. The number of specialized wholesale markets nationwide has also decreased, from over 1,000 to around 800. The industry is highly concentrated at the top, and individual operators are facing a market reshuffle.

Some entrepreneurs in fourth-tier cities operate large offline apparel factory stores, leveraging Douyin for traffic. With a markup rate of only 1.5-1.8, they focus on cost-effective, factory-direct sales, achieving annual sales exceeding 100 million yuan across four stores.

2 Characteristics of the Middle East E-commerce Market

Countries like Saudi Arabia, the UAE, and Kuwait, with a combined population of around 30 million, support three e-commerce platforms with GMV exceeding 10 billion yuan. In contrast, Egypt and Iraq face significant purchasing power challenges.

E-commerce penetration in the Middle East is low, at about 10%, far below China's 26%. The region includes many foreign laborers, with only about 60% of the population being locals with spending power. Cross-border e-commerce products are mainly apparel and home goods, while standardized products like electronics are harder to sell.

Due to religious beliefs and the lack of bank cards among female consumers, cash on delivery is the dominant payment method in the Middle East, though it faces delivery confirmation issues.

3 AI Applications in Commercial Video Content Creation

In AI, there are only a handful of major platforms, and the focus is ultimately on industry applications. This year, only four or five domestic companies have truly surpassed 100 million yuan in revenue, one of which was present at this dinner.

AI is widely used in e-commerce and content creation, automating the production and distribution of commercial short videos to improve efficiency and reduce costs. Mainland China generates 150 million commercial short videos daily, with intense competition. For example, a well-known cosmetics brand distributes thousands of videos daily.

AI can replace much of the editing work, maintaining brand identity while boosting output efficiency. Due to regional content and market preference differences overseas, localized production and distribution strategies are needed. AI excels in maintaining content consistency and avoiding repetition. AI is the most powerful tool for Chinese companies going global.

4 Current State of China's Watch Industry: Rise of the Secondhand Market and Export Potential

China's watch industry has declined significantly due to economic impacts, but the domestic market still maintains a scale of over 100 billion yuan. As the world's largest watch manufacturing hub, China exports over 90% of its production, with annual exports reaching 540 million watches, showing huge export potential.

Domestic secondhand watch trading is rising, though online transactions remain limited. Platforms like Douyin have created buzz but haven't driven substantial actual sales.

The future opportunity for the watch industry lies in branding and channel expansion overseas.

5 Transformation and Challenges in the Medical Aesthetics Industry Amid Market Decline

Market decline in medical aesthetics: China's medical aesthetics industry shrank by 30-40% in 2023 and is expected to drop another 20% this year, returning to 2019 levels.

Challenges for large medical aesthetics institutions: High costs have led to severe losses, and the industry is undergoing rapid consolidation.

High customer acquisition costs: Leading institutions spend thousands per customer, but visits don't always convert, resulting in low conversion rates.

Market trends: Despite the overall decline, the medical aesthetics market remains promising, especially with stock market rebounds and restored consumer confidence.

6 Market Opportunities in Indonesia and Vietnam

Southeast Asia has over 600 million people, with a third in Indonesia, which adds over 5 million annually. Rich in minerals and population, Indonesia is aggressively developing local manufacturing, offering many opportunities, with high status for ethnic Chinese. Vietnam, with 100 million people, excels in manufacturing for re-export to 欧美 markets.

7 Global Competitiveness of Korean Cosmetics and Strong Performance of Chinese Brands on Amazon

Korean cosmetics hold a significant global advantage, with large factories and front-end brands, especially strong on Amazon.

China excels in globalization, particularly on platforms like Amazon, where its brands and products are highly competitive. Amazon has multiple recruitment hubs in China, including Shanghai, Hangzhou, Qingdao, and Yiwu, with Shanghai serving as its headquarters for China and the 亚太 region.

8 Global Market Business Opportunities and Industry Potential

Based on economic development and 消费能力， global markets are divided into three tiers: developed markets like 欧美， middle-income countries like the Middle East, and developing regions like Southeast Asia and Latin America. Middle-income countries, though smaller, offer opportunities, especially in basics like food and water.

Finance, resource mining, and land acquisition are seen as big-money sectors. Consumer industries, especially those providing essentials like food and water, also offer stable profit potential.