RMB Appreciation; Shoemaking Is Very Hurt

The latest data from China Foreign Exchange Trading Center shows that on September 21 RMB The central parity rate against the US dollar rose above 6.7 to 6.6997, 113 basis points higher than the previous trading day, rewriting the record since the reform of foreign exchange for the eighth consecutive trading day. It is understood that since September, the RMB has appreciated as much as 1.6% against the US dollar profit margin The low export of shoe industry has brought great losses.

"The industries that have the greatest impact are textile, shoes and hats, which have a large export amount but low profit margins." According to a person who has been engaged in exports for a long time, the appreciation of the RMB will not only increase the price cost and weaken the competitiveness of export enterprises, but also directly bring profit losses. He pointed out that at present, the overall profit margin of the electromechanical industry is 8%~10%, and the impact of RMB appreciation can be digested, but many textile and footwear exports with low profit margins will lose nearly half of their profits due to the sharp rise in foreign exchange.

how Risk avoidance

In response to the change of exchange rate, export shoe enterprises are more active than anyone else. At present, there are only two visible and tangible ways. One is to make an effort on time, and the other is to make an effort on price.

Delaying the delivery of orders is the simplest and most common method adopted by enterprises at present.

Li Jia, general manager of Wenzhou Jiayu Leather Shoes Export Enterprise, told reporters that the enterprise had just signed a batch of orders with an American customer last month and delivered them within three months. But what he did not expect was that the RMB began to appreciate continuously from September 13. Now if the goods were delivered immediately, the enterprise might not earn any money, but the company kept dragging, hoping to wait until the RMB exchange rate fell.

Although postponing delivery may solve the immediate urgency, it is not a long-term solution after all. If the RMB continues to appreciate, the more companies wait, the more they will lose.

If the enterprise does not want to "wait for death", there is another way out, that is to raise prices. At the end of the international OEM chain, squeezed under layers of pressure, it is not easy to raise the price, but if you want to lose money, you must raise it.

Li Guorong, secretary-general of Wenzhou Hardware Chamber of Commerce, said that for the rapid appreciation of the RMB, the response measures of enterprises are related to their scale. Large enterprises will have specific plans, while small enterprises are very passive and can only "follow the market".

He said that for old customers who have cooperated for many years, export enterprises can lower the purchase cost of raw materials by giving play to the scale effect at the original price if they need large quantities of orders. If only a small order of 1000 or 2000 pieces is needed, the price will be increased by about 5%. In addition, try to recommend the newly developed products to old customers. European and American customers can still accept the price of the new products raised by about 10%. But for new customers, prices will be raised.

Forced enterprise transformation

The appreciation of the RMB has exposed the loss of low-cost competitive advantages of Chinese export shoe enterprises, but it has also become a condition to force export shoe enterprises dominated by export-oriented economies to improve their innovation ability and increase the added value of their products. Therefore, for export-oriented shoe enterprises, how to improve the profit margin by improving the gold content of products will be a key issue in the future, and the upgrading of export products is very important.

First, concentrate on the production of products with high scientific and technological content. For export-oriented shoe enterprises, there are many defects and deficiencies, lack of market risk and share, and lack of product personality due to weak development capacity, which make export-oriented shoe enterprises face huge business difficulties. At present, export-oriented shoe enterprises account for a small proportion in the whole technology intensive industry, and the lack of brand is also serious. Therefore, enterprises can only gradually adjust the price of products according to the change of exchange rate by continuously improving the quality and added value of products. In terms of product research and development, more technical talents should be introduced, and multi category production should be carried out on the premise of ensuring quality through technology.

Secondly, change the marketing mode to improve the voice of price. Nowadays, most export-oriented shoe enterprises rely on price war to attract foreign markets, lacking independent innovation and self expansion of sales channels. However, this marketing model has affected the image of export-oriented shoe enterprises, and can not achieve long-term development. Therefore, the urgent task of adjusting export-oriented shoe enterprises is to be good at seizing favorable channels, establish a win-win model, and improve market share through promotion of event marketing, exhibition marketing, soft articles, websites, etc.