When Payment Terms, Subsidies, and Tax Tricks Are Tapped Out, What Is Left?

 


Lately the word I hear most from veterans in the feminine hygiene industry is "neijuan" — involution. Everyone is asking the same question: how do we survive?

An old-timer who has been in this business for over thirty years described what he has seen. At first, companies competed by lowering prices and sacrificing margin. Then they tried to lose less instead of earn more. Then even that stopped working, so they started squeezing internal costs: longer payment terms with suppliers, chasing government subsidies, optimizing tax structures. Every possible source of savings got dug out.

But here is the tragedy. The money saved often did not go back into the product. It went into marketing — live streaming, promotions, paid traffic. And marketing without a differentiated product is just burning cash. This month you get a spike; next month a new brand copies you and buries you. You are forever running just to stay in place.

Why? Because everyone got the priority wrong. What the industry lacks is not money. It is R&D.

R&D costs money and shows results slowly. Marketing spends money and shows results this month. When margins are thin, nobody wants to invest in something that takes two years. But the result is product sameness, which leads to price wars, which kills margins even more. It is a death spiral.

I know this from experience. In my early e-commerce years, I spent heavily on models and traffic. Sales hit twenty million yuan in the first year, but after platform fees, warehousing, and payroll, I lost over five million. The company was pulled out of the hole by one product: a well-made, thin, breathable period pant. Not by a marketing trick. By product.

So when there is nowhere left to cut, the only weapon left is to make the product right. When everyone else is out of moves, the ones who quietly focus on product gain the advantage.

For buyers evaluating long-term suppliers

A factory that only knows how to cut costs will eventually run out of costs to cut. A factory that invests in R&D can keep delivering better products year after year.

At Nafei, product development is not separated from manufacturing. We prototype, test, and iterate OEM sanitary pads and menstrual pants in-house. If you want a partner focused on product rather than shortcuts, start here: China Feminine Hygiene Wholesale & OEM.


Li Genyuan is the founder of Hunan Nafei Biotechnology, a feminine hygiene OEM/ODM manufacturer in China. He writes about building a real product business in the pad and menstrual-pants trade. More at hnnafei.com.

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