Wenzhou Shoe Companies Have Been Shuffled By Low Price Shocks

As "China Shoes Capital", Wenzhou City

Foreign shoe companies seize Wenzhou share

Operating in Wuhan

Over the past two years, the footwear industry in the mainland of Hebei and Henan has risen rapidly, with manpower, hydropower, factories and so on.

Similarly, in Wenzhou, the largest footwear wholesale market in the city, the reporter understands that the original pattern of Wenzhou shoes has become the three part of Wenzhou, Fujian and Guangdong.

Some operators from the previous run of Guangdong and Fujian shoes became specialized in Guangdong shoes and Fujian shoes, and the prospect of "Guangzhou shoes leading trend" and "Wenzhou shoes dominate the market" in the industry has been increasingly relentless challenge.

"The price of Guangdong shoes is not much higher than that of Wenzhou, especially the canvas shoes that are popular this year. The styles are quite unmatched by Wenzhou shoes."

A staff member of the shoe floor, two floor, operates casual shoes.

Reporters turned around in shoe city and found that many of the stalls were empty and warehouses. The bustling scenes were no longer as good as those of previous years. Some business owners revealed that shoes city accounted for a large proportion of Wenzhou's local shoes in recent years.

Wholesaler's statement and shoe city knowledge reflect the current situation of leather shoes in Wenzhou.

In fact, the number of shoemaking enterprises in Wenzhou has been shrinking over the past few years. In 2003, there were more than 4000 shoe enterprises of a certain scale in the whole industry. By this year, the number has turned to 3035, and over 7 years have evaporated more than 1000.

The cost is rising and overburdened.

What makes Wenzhou's small and medium shoe enterprises evaporate year after year?

The cost of raw materials and labor has risen, and profit margins have been further squeezed. Coupled with the financial crisis of the previous year, the small and medium-sized footwear industry, which was originally vulnerable to the capital chain, was struggling.

In 2008, the Municipal Economic and Trade Commission conducted a statistical survey of 15521 small and medium-sized enterprises in 31 industrial strong towns and development zones. The results showed that the total number of stoppages, half stoppages and failures accounted for 8.1% of the total surveyed, of which 1/3 were shoe companies.

The cost of land constraints and labor continues to rise, and some shoe companies are turning to Sichuan, Hubei and neighboring Taizhou, Lishui and other places, and some even move abroad.

At the same time, leather making enterprises supporting shoemaking and more logistics and pportation costs have also weakened the competitiveness of local middle and low end shoe enterprises.

Homogeneity competition is too fierce, but also make some enterprises change.

The shoe leather industry association revealed that the latest style of the market was quickly imitated in Wenzhou, and there was no secret between the peers. Many enterprises went away from home to create another world.

In recent years, frequent trade barriers such as customs clearance and anti-dumping are also the reasons.

Wenzhou shoes rely heavily on exports. From 1 to September this year, footwear accounted for 26% of the total exports of the city, accounting for 62% of the footwear exports of the whole province. It is a genuine leather shoes export market. Some powerful enterprises have simply moved the processing plant to a foreign country in order to avoid trade barriers, and upgraded Wenzhou manufacturing to "world manufacture".

Transformation and upgrading is easier said than done.

Reporters in the interview, heard the most is "business is more and more difficult to do"; shoe enterprise boss no one does not want to become bigger and stronger, but really put into practice is still a bit difficult.

In the middle and low end shoe factories, Louqiao and Shuang Yu, a Ma Xing manager of Dehui shoe company, told reporters that they had six or seven sets of abrasives, 3 production lines and more than 70 workers, with an annual output value of 20 million yuan.

At present, a set of abrasives is about 60 thousand yuan, and the production line is about 800 thousand yuan.

According to the average 8% profit of the industry now, if we go to the middle and high end, the cost of updating the optical equipment will double, exceeding the net profit of the shoe factory for one year.

R & D has always been the weakness of the small and medium-sized shoe enterprises in our city. Once the style is wrong, it is easy to compensate for the old version.

This is also the fundamental reason why many shoe companies are aware of danger but still sell their products in a rush.

"A high-end shoe manufacturer in Cangnan did not do well because of its open design, and it also had problems in management, and it went bankrupt in two years."

Ma said, "bigger and stronger, of course, there are temptations, but most SMEs can only stabilize steadily, because" really can not afford to lose. "

All kinds of uncertain high risks make small and medium-sized enterprises' enthusiasm for pformation and upgrading not high.

The head of a shoe factory in Longwan District told reporters that they sold eight hundred ninety thousand pairs of shoes to distributors everywhere in the year, and they could not sell them any more. This idea of "small wealth and immediate security" existed in many other small factories.

Despite the influence of various factors inside and outside, Wenzhou shoes are not as good as those of previous years, but Wenzhou shoes still have its market and reputation.

An Chongqing businessman who bought the shoes city in Wenzhou told reporters that Wenzhou's leather shoes design is unique, and the Wenzhou shoe leather industry chain is very perfect. If we make full use of these advantages, Wenzhou shoes will not go downhill.

And another wholesaler from Henan said that he and many of his colleagues still liked to deal with Wenzhou shoe owners because they "experienced rich and trustworthy without losing their loyalty".

Shuffling is not necessarily a bad thing.

"Shoe industry is an old industry in Wenzhou. Even if there are no external factors, it will shuffle itself."

Insiders said that the market competition of Wenzhou footwear industry has been fierce.

After years of competition, the footwear industry in Wenzhou has shown a "1+N" pattern.

This "1" refers to Kangnai, AOKANG, red dragonfly, etc., which have completed the brand building and established the first group of powerful marketing networks. "N" refers to those small and medium shoe enterprises whose production capacity is not weak but is in OEM processing. Many of them have become the "processing plants" of the first group army.

It is understood that some of the city's "1" of cattle, behind the relevant "N" or even a number of ten.

These "1" concentrates on building brand and R & D value-added products, and outsourcing more processing links.

This combination of strength and strength has not only made many small and medium-sized enterprises play a dominant role in the production of superior products, but also made some big brands stand out.

"From this point of view, the cooperation of Wenzhou shoe enterprises in competition is still healthy."

Xie Rongfang, Secretary General of the shoe leather association, analyzed that the trend of the reduction of small and medium enterprises will continue. In the future, more SMEs will be restructured and entered the industrial chain of big enterprises. This is the market rule of survival of the fittest. In this sense, the sharp decline of Wenzhou shoe enterprises is not a bad thing.

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The reporter observes:

Brother or brother

Rivers and lakes are not the rivers and lakes.

In the peak period, there were more than 4000 small and medium-sized shoe enterprises, and more than 1000 were reduced in seven years, but 30 of them were really big.

To be sure, the shoe industry in Wenzhou will continue to shuffle.

Looking at the success of the shoe industry in our city, we have to invest heavily in R & D, import advanced manufacturing technology from abroad, build up our own marketing network with strong capital, set up a brand shop, and create a brand.

But such a road to success is no longer suitable for the small and medium-sized enterprises at present.

In the fashionable words, "brother is still the elder brother, but the rivers and lakes are not the rivers and lakes".

At that time, the footwear industry was just starting up, with less competition and the market in the seller's market. As long as there is good quality and style, it is easy to occupy the market.

Now, with the excess capacity and the shoe industry everywhere, the brand, capital and strong marketing network are all compared. These are the weak points of the small and medium-sized enterprises.

The embarrassment faced by small and medium-sized enterprises is similar to that of urban white-collar workers.

If the white-collar workers can not set up their own doors, they will bow their heads and do things for BOSS; and the most realistic of small and medium-sized enterprises seems to be squeezing into the famous big brands supply chain, so that besides the order guarantee, the profits are also good.

But just like this, are the BOSS of the small and medium-sized enterprises happy?