Christmas goods' factories and retail outlets in Yiwu, Zhejiang province, get ready for the festival. [Photo/Agencies]

"So the cost of electronic parts has gone up by 80 percent. Even though we have raised our prices, the profit margin is now much lower than previous years, which is less than 10 percent," he said.

Even though the profit margin is less lucrative, the company profits have not been impaired, mostly because retail orders have increased quite significantly this year, thanks to the proliferation of internet and online shopping, Luo said.