Price Inflation &Nbsp; Shoe Enterprises Facing Foreign Trade Spanformation "Slight Profit"

On the 109 three session of the Canton Fair, which is dominated by labor-intensive industries, the price inflation of export products has become the most obvious impression for buyers. The price hike of products is far less than the increase of costs. The profits of enterprises have not improved, but have become increasingly thin. No worries Order Worried about profits, labor-intensive foreign trade enterprises are facing the painful process of Phoenix Nirvana.

　　 Price inflation

In May, the city of Yangcheng was shrouded in misty rain. In May 1st, the third phase of the 109th Canton Fair opened on schedule. In the context of inflation, this large-scale exhibition, known as "China's barometer of foreign trade and weathervane", has aroused renewed concern.

Compared with the past, enterprises dare not raise prices. The 12th Five-Year "The first Canton Fair in the opening year, the price inflation of export products became the most obvious impression for buyers.

"The price of our products has been raised by 10%." Mr. Yu Yu, manager of the Export Department of Rongcheng Tai Xiang group, said that its main business was frozen and canned food. Last year, wheat, potatoes and corn starch increased sharply, plus the increase in energy and labor costs, as well as the trend of exchange rate changes, and the prices of products had to rise.

In the next step, if Japan's nuclear pollution is further spread, the raw materials of the sea will become scarce, and the prices of raw materials such as fish and shrimp will increase, "he said.

A home textile enterprise official told reporters that they mainly produce towel products, raw materials mainly cotton, although in recent years, enterprises are developing new alternative materials, but completely replace cotton is not possible.

"Last year, when cotton prices were the highest, a ton sold to more than 30 thousand yuan, up nearly 140%, while cotton prices accounted for 60% of the total cost." The official said that the price of their products increased by 15%, and some of the best sellers increased by 20%.

Reporters noted that the third phase of the Guangzhou Trade Fair mainly focuses on labor intensive industries, involving home textiles, clothing, food, bags, leather shoes and other industries. In the face of rising domestic costs and instability of the RMB exchange rate, most enterprises can only raise their prices in response to the increase in prices of food and textiles.

Liu Hongtao, deputy manager of import and export company of golden monkey group Weihai Footwear Co., Ltd. told reporters that the price of leather shoes has been raised by about 5% compared with last year. Sun Zhi Gang, vice president of Shandong Regal Leather Co., said that the price of leather bags they produced increased by about 10%.

Profit thinning

Does the rise in prices mean an increase in profits? The opposite is true.

According to the enterprise, the price increase of the product is far less than the rise in the cost, and the profit of the enterprise has not been improved, but it has become thinner and thinner.

Guan Yan, director of overseas sales of Zhucheng Ailing bag Garments Co., Ltd. told reporters that these days, the company can receive more than 50 foreign new customers every day, with an intention to reach US $600 thousand, and the order has been released to mid July.

As he said, reporters at the Canton fair show that a customer from Japan FACTORYFUJITA picked 13 women's bags and ordered samples. The buyers from Europe and America and South Korea also showed great interest in Ailing's bags in Zhucheng.

"What worries companies now is not orders, but profits." Guan Yan said that during the financial crisis, enterprises were focused on preserving orders and ensuring production. But in the post crisis era, worries were increasing. The cost of raw materials and labor has risen sharply, bringing the gross profit margin of its company from 20% to about 5%-10% today.

Chang Hao, director of Weihai silver embroidery product sales center, told reporters that since last year, the company's orders have been good, but profits are getting thinner and thinner. Now the RMB central parity with the US dollar has broken through the 6.50 pass. Although the company raised its export price by 10%, in fact, the cost price has risen by 30% since last year.

"For us, it's good to be guaranteed." Xiao Feng, import and export manager of Jining Jin Long Yuan International Trade Co., Ltd., told reporters that they mainly engaged in garlic exports. When the cheapest garlic was only 8 cents a Jin, it soared to 6 yuan last year, and now it falls back to about 4 yuan.

"At the beginning of May and the beginning of June, new garlic will be on the market. At present, the demand in the international market is stable, but its price is generally expected to fall. So far, buyers are reluctant to place orders, waiting for better products and prices. Xiao Feng was helpless.

Transformation pains

Kong Qingfeng, a professor at the school of economics, Shandong University, said that China's foreign trade enterprises will inevitably enter the era of meager profits as the world economy enters a new low speed growth cycle, trade protectionism is rising, and cost factors are rising, and the appreciation of the renminbi will affect them.

He further stressed that, especially for traditional resource intensive labor-intensive industries, the production of traditional comparative advantage products, due to low technology content, homogenization competition, product bargaining power is weak, and the increase of labor and raw material costs has more "pain".

Lv Wei, head of the Shandong provincial trading group, said: "if you want to make profits in the era of meager profits, export enterprises will only have spanformation and upgrading, and now is undoubtedly the best node."

She told reporters that at this fair, the Shandong home textile industry relies on a complete industrial chain, research and design advantages, from the source to control the cost of enterprises, customer quality and spanaction prices remain high. With the brand and technological innovation, Linyi Xinguang blankets not only increased the volume of spanactions, but also made a number of excellent customers.

Lv Wei also said that the spanfer of production lines through overseas factories can also defuse the cost pressures cleverly. For example, the Zibo LAN Yan Group actively "go out" and invest in factories in Kampuchea, which not only evaded trade friction, but also spanferred to Europe and America through the ASEAN channel.

In addition, the spanformation of Zhejiang Thompson is also worth learning. As an outdoor leisure products company, "Tempson" has expanded its own brand export through building a global sales system and building e-commerce platform. In order to maintain the leading position of products, it has also hired a group of designers such as the United States, Holland, Germany and so on, with the help of their brain bags, to make intelligent "relay development" for the company's products.

Nowadays, in the European and American fishing and leisure market, every quarter of the new type is designed by "Tempson". The annual output value of this series of products is 300 million yuan, which has been firmly on the top of the overseas quota, and has achieved the spanition from OEM (Foundry) to ODM (Design) to OBM (brand).

"Transformation itself contains the painful process of the Phoenix Nirvana, but it can only become a butterfly if it breaks the cocoon." Lv Weiru said.