I have a basic judgment that in about the next five to 10 years, the incremental market will become a stock market.

Incremental times, gold everywhere, either yours or mine. Friendly and harmonious, polite and modest.

Stock the world, brutal fighting, everyone began to hold tight the money bag, look tight, and even look at each other, dare not take it lightly.

IC693APU302P Many enterprises are facing such a “dilemma” : in the stock world, how to find new increments?

Not long ago, I paid attention to some phenomena, such as Cao Dewang and his Fuyao Glass to build a factory in Ohio, the United States, the documentary “American Factory” tells this story. Musk and his Tesla ran to Shanghai, China, to build a factory, the end of the year will achieve mass production.

Behind all this lies an important trend.

Going to sea may be a new round of growth dividends

IC693APU302P Why going to sea could be a new round of growth dividends

To answer that question, you need to understand what’s happening, one bad news, one good news.

The bad news is that we have to admit that the supply-side demographic dividend is about to disappear.

Over the past 40 years, China has been able to become “Made in China” because of its unique demographic dividend.

We rely on the abundant supply and low price of labor, forming a huge comparative advantage, in the development of globalization to seize the position, become the “world factory”.

IC693APU302P At that time, there also emerged a group of excellent enterprises represented by Lenovo and Haier.

But now the demographic dividend on the supply side is gradually disappearing, and the number of labor is becoming more and more scarce, resulting in more and more expensive labor costs, and many factories have no one to recruit.

Many factories cannot afford the high cost and are dying. Cost, cost, cost, they asked worriedly:

What to do?

But the good news is that technology is advancing at an extremely fast pace, and the advent of robotics and mass automation has the opportunity to reduce factory costs.

For example, BMW’s assembly factory and Haier’s lightless workshop are typical representatives of the use of automation.

The rapid development of technology will reduce the threshold and cost of using technology, and these technologies will greatly reduce the expensive labor costs.

Cost, or cost, as long as the cost problem can be solved, these factories have a chance to be revitalized.

Understanding these two changes, we can see why going “out to sea” could be a bonus.

Because “cost” is the “business life and death line” of most enterprises, “success or failure”, entrepreneurs and entrepreneurs must keep accounting, accounting can be even, there is a chance to make a profit, otherwise, there is a crisis.

IC693APU302P Cao Dewang, apparently, was an excellent actuary.

In an interview with Chen Weihong on The Conversation, he talks about why he went to Ohio to invest in building an “American factory.”

An old man in his 70s, breaking his fingers to calculate the account so fine, marveled.

In the United States, almost everything is cheaper than China, only labor costs, more expensive than China.

But just mentioned that the advent of mass automation will greatly reduce labor costs, you say that this “wily” actuary, where will the factory be built?

Therefore, in the changing times, going to sea means more profits, a bigger market, and a more rational choice.

IC693APU302P Going to sea can set up factories in destination market countries

What do you mean?

We often say that there are generally three options for investing in a factory:

The first is to build in raw material producing countries. It is rich in resources, such as copper and aluminum in some countries, coffee beans and rubber in others.

The second is the establishment of third-party manufacturing countries in the middle. The raw materials are shipped to third countries, processed and then shipped to the world.

The third is to establish in the destination market country. Establish directly in the market where the target customers are located.

In the past, China was in the second category, a third-party manufacturing country. Because labor costs are cheap, we find that the total cost of shipping raw materials to China, manufacturing and processing and then shipping to the world may be the lowest.

IC693APU302P But thanks to the automation just mentioned, labor costs will no longer be a decisive constraint, and more factories will be established directly in the destination market countries, which will facilitate rapid response to the market, and also facilitate the fastest transportation and sales of finished products.

Like Cao Dewang and his Fuyao glass.

One of Fuyao’s main customers in the US is General Motors. The glass product is extremely difficult to transport, and the construction of a factory in the destination market country greatly saves costs and improves efficiency.

Or take Musk and his Tesla.

A large proportion of Tesla’s customers are in China. In the first half of this year, Tesla’s retail sales in China reached about 25,000 vehicles.

This is almost equivalent to the combined sales of Weilai, Weima and Xiaopeng in the first half of the year.

In this way, we can understand why these two people want to build overseas factories, they are not “no confidence” in the country, not “sick”, may just be because overseas factories are more cost-effective, closer to the target user.