Guangdong Shoe Enterprises Try "Both Inside And Outside"

An international financial crisis has made more and more export-oriented enterprises find that the road of export after more than 30 years is in great danger. How to reduce dependence on exports and open up two markets at home and abroad to walk on two legs? In 2009, Guangdong, which still has a high degree of dependence on foreign trade, is now trying to build an "internal and external" road of 133%.

Footwear production accounts for about 30% of the world's total, construction ceramics account for about 30% of the world's total output, desktop computers account for half of the world's total output, computer heads, chassis and semi finished products account for 40% of the world's total, and electric rice cookers account for 60% of the world's total output. The international financial crisis has been rolled over, and the number once proud of Guangdong, the first largest province in the country's foreign trade and economic cooperation, has become the invisible hand to hold the lifeblood of the local export-oriented economy.

　　 In the most difficult time, Guangdong resolutely turned inward.

In 2009, the total domestic sales of foreign-funded enterprises in the Province amounted to 840 billion yuan, which effectively responded to the impact of the international financial crisis. In those days, the dependence on foreign trade decreased by 22 percentage points to 133% in 2007 before the outbreak of the crisis. The pattern of over reliance on external demand has changed.

Wan Qingliang, vice governor of Guangdong Province, pointed out the reason for turning inward: "over reliance on the international market, changes in the international economy, the crisis will come, Guangdong will bear great impact. Therefore, it is necessary for Guangdong to reduce the degree of dependence on foreign trade and economic cooperation, vigorously expand the domestic market, and catch up with the two markets at home and abroad.

　 "Walking on two legs, why are you limping?"

Sweet gifts from the domestic market

There is a new factory area in the quiet green trees of the Daling mountain town in Dongguan. A batch of furniture marked with IKEA logo is shipped from here to Europe, America and Japan. As everyone knows, this is the largest furniture manufacturer in Dongguan, the Furniture Co., Ltd.

From May 2009 to October, when most foreign furniture enterprises were still worried about orders, Aidi's sales increased by 40% over the same period last year. General manager Li Ke said it was a sweet gift from the domestic market. As the total sales volume of IKEA furniture has been rising all the way, Eddie's performance has also been heard monthly. This led Eddie to see the huge demand for high quality and simple style furniture in China. In fact, at the beginning of 2007, Aidi looked at the vast market of domestic sales. At that time, Aidi's business form was still raw material processing, and it could not be sold directly in the domestic market. It had to go through the "one day tour of Hongkong" before it could be sold domestically.

In 2009, in order to cope with the impact of the international financial crisis, the foreign trade foundry enterprises in the Pearl River Delta began to test the domestic market under the government's push. In April of this year, Eddie officially became a sole proprietorship. In just 5 months after the transformation, Eddie tasted the sweetness of domestic sales. But without its own brand, there is no way to "bite" the domestic market. According to the investor's fortune group, in the future planning, eggs should be placed in three baskets: one basket for IKEA products, one basket for own brand, and one basket for other products.

"Walking on two legs, why do you need to limp?" As one of the largest manufacturer of high-end buttons in the Pearl River Delta, Dongguan's Da Ji button has a deep sense of security for the two legs walking abroad.

Over the past 9 years, Dongguan dkey Button Products Co., Ltd. has produced buttons and other garment accessories for Armani, Esprit, Levis and other internationally renowned clothing brands, and exported to Europe, India, Sri Lanka and other countries and regions. Under the impact of the international financial crisis, button manufacturers face unprecedented "frost days". Deng Zhicong, director and deputy general manager of the group, said: "85% of the importers are already dead", and 5 leading enterprises in Hongkong are two. One of the remaining 3 families is Da Ji, who must have a sense of urgency.

Fortunately, in 2006, Wuxi invested 2 million US dollars to set up factories in Shanghai and set up offices in Shanghai, Nanjing and Wuhan. These measures have made a great contribution to the domestic sales of the company. Even in 2008 and 2009, which were seriously impacted by the international financial crisis, the group achieved a total domestic sales of more than 40 million yuan.

In 2009, in the Pearl River Delta's most concentrated foreign trade processing enterprises, the total domestic sales of foreign-funded enterprises amounted to around 150 billion yuan, accounting for 30% of the total domestic and foreign sales for the first time, 12.82 percentage points higher than that in 2007 before the financial crisis, which is equivalent to the 2/3 of foreign enterprises' exports, which partly offset the shortage of external demand.

　 "The cake is big, but it takes a lot of trouble to eat."

After turning, we have to cross several barriers.

In the past, most foreign trade enterprises did not touch the domestic market. There are some real stories circulating in foreign-funded enterprises in the Pearl River Delta region.

A large enterprise that produces high-grade luggage and bags has entered the domestic market ten years ago. It has invested tens of millions of dollars by relying on export profits, and has persisted for ten years without any gains. Finally, it ended in a bleak ending. A few years ago, the Huajian shoe industry group, more than 30 of the top 50 of global shoe enterprises, began to strengthen domestic sales to resist risks. Invest about 80000000 to create several brands, but due to lack of experience, inaccurate product positioning, and eager to expand, and so on, Huajian had to announce the suspension of domestic sales development.

"Exports to domestic sales, the cake is very large, but it's a bit hard to eat." Chen Yaohua, President of Dongguan textile and garment industry association, said that foreign trade, as long as there is a customer order means profits, this process is not complicated.

The downturn in the international market is undoubtedly the biggest driving force of "export to domestic sales", but the difficulties of business models, sales channels and settlement methods are in front of enterprises. The mode adopted by domestic enterprises is to make fixed sales, not only to invest a large amount of funds for product development and inventory, but also to take large risks.

"The construction and maintenance of sales channels and brands is the bottleneck that restricts the export enterprises' transformation of domestic sales." Deng Xiaoling, general manager of Dongguan Shang Jing Garments Co., Ltd., in a word, pointed out the entanglements of foreign trade enterprises in the domestic market. "The situation of delinquent payments and" triangle debts "often happens. I flew to the northeast for two times for tens of thousands of dollars, but no result, and simply gave up domestic sales. Mr. Zhang, owner of a garment factory in Pearl River Delta, said.

Faced with this situation, Guangdong held the first International Expo in Houjie Town, Dongguan last June. For the first time, it built a platform for export to domestic sales, and enterprises can participate in it for free.

The huge business opportunities that the government actively set up and the domestic market has made the Expo a success. The 3 day reached 4879 business items, with a total sum of 50 billion 900 million yuan. Wan Qingliang said to the executives of enterprises: "the Expo aims to build a" through train for export to domestic sales "of foreign-funded enterprises, and try to solve the puzzle of export enterprises in developing the domestic market, so that the Expo will become an important platform for promoting export to domestic sales, promoting strategic transformation and stimulating domestic demand market.

At the first Expo, some enterprises with suspicious attitude have tasted the sweetness of domestic sales from "one heart outward" to "both inside and outside".

The overseas Chinese express industry, with the latest development of its three series of products, such as high-end watches and ornaments, has attracted many buyers to cooperate and negotiate. In the past, all the products sold to the overseas Chinese express industry in the Middle East, there were more than 70 stores in China, and the proportion of domestic sales accounted for 20%.

In 2009, the "overseas facing" Canton Fair also finally opened a door to "inside", and many domestic buyers and wholesalers first went to the fair to purchase foreign trade products.

In the past year, San Marco has gradually changed the pattern of export oriented products, such as the "Expo", the Guangzhou Fair and other exhibition platforms and the opportunity of the north of Guangdong. In 2009, the proportion of domestic sales accounted for more than 90% of sales, which made up for the significant loss of exports.

　　 "The beneficiaries are not only Chinese enterprises, but also Chinese consumers".

From "expediency" to active attack

The government set up a platform for the docking of domestic and foreign trade, narrowing the distance between "foreign trade" and "domestic trade". This is the only way for the healthy development of Guangdong's export-oriented economy.

Guangdong's surplus production capacity accounts for 25% of GDP, the highest in the country. Trade barriers, low cost competition, rising prices of raw materials and exchange rate problems have been the last straw for foreign trade enterprises in recent years. It is just that the international financial crisis has made this moment fast and spicy, and it has made everyone's reflection more profound.

Chen Yaohua said: "in a few years, the capacity of Guangdong's manufacturing industry has expanded rapidly, and the main order markets in Europe and the United States have set up trade barriers and quota restrictions. Enterprises are constrained by the overcapacity crisis."

In 1980, Liang Lin and Liang Zhongming founded the first toy enterprise, Hongkong, from Dongguan to Hong Kong. 29 years later, the two brothers' "OEM" processing enterprises gradually developed into a H-share listed company with annual output value of 800 million yuan, which is integrated with R & D, design, production and sales. Whether it is R & D, brand or expansion channels, Long Chang has been very experienced.

The road of Long Chang's digital is precisely the "internal and external repair" that many Guangdong export-oriented enterprises are honing. Each year, R & D funds reach about 30 million yuan, and 250 new products come out every year. The company has applied for 365 patents, 56 applications for trademark registration, and acquired the US KG and its Bendos brand in 2002, thus obtaining its own brand and 2500 chain terminals in North America.

In the second half of 2008, the financial crisis just broke out, and the number of dragon Cheong digits was keenly aware that only by raising the share of domestic sales to 15% to 20% could we resist the survival difficulties caused by the decline in overseas demand. "Developing domestic sales is also a good way to deal with the increasingly serious trade barriers in the toy industry abroad." With its strong brand and R & D technology, and with toy dealers in the channels, and expanding the sales channels in all directions, second years, the toys of Long Chang are on the counter of Jusco.

In a forum held in Dongguan in mid March, Zhang Huarong, chairman of Huajian group, admitted that foundry enterprises rely on low price orders, cheap labor and extensive family management. They urgently needed to "adjust the development mode and carry out transformation and upgrading". The thought of the industry bigwigs represents a surging trend of thought and transformation. Compared with last year, "export to domestic sales" is no longer an expedient measure to deal with the crisis. Guangdong enterprises began to take the initiative to plan "both inside and outside".

This is also confirmed by the investment situation of the second Expo held in June. 1200 foreign-funded enterprises were actively enrolled, and 2500 booths were full for a short time. The organizing committee had to dissuade the endless stream of enterprises, and many enterprises in the first Expo were mobilized. In fact, the significance of Guangdong's "export to domestic sales" is far more than just saving the losses of enterprises and adjusting the pattern of local foreign trade. More importantly, it provides an opportunity to break the unreasonable system design and policy limitations, allowing enterprises to decide whether to make foreign trade or domestic sales according to the changes in domestic and foreign markets.

Ma Yu, director of the Department of foreign investment research of the Ministry of Commerce and international trade cooperation research institute, said that the future of "export to domestic sales" will become a norm. If this step goes well, the beneficiaries will include all Chinese enterprises and even all Chinese consumers.