Price Increases Pressure Small And Medium Shoe Enterprises &Nbsp; Interests And Development Are Difficult.

In June 21st, "now such an exhibition, basically can be said to exist in name only."

To enter the fourth seats on the left hand side of the finished products stadium, Zhu Xiao Feng, general manager of the domestic sales department of Guangzhou Yi Si card Shoes Co., Ltd., frankly told reporters that he would not expect customers at such an exhibition.

This is the first day of the twenty-first Guangzhou international footwear, leather and industrial equipment exhibition. The exhibition hall of 5 large guilds has a sparse flow of people, and there are few buyers in the guild hall of the international footwear cost exhibition.

"This year is very difficult, even harder than 2008."

Asked about the business situation this year, Zhu Shaofeng blurted out.

His company is a veteran shoe factory that has 20 years to pform from the role of trader to owning its own shoe factory and having to sell domestically.

"Who will be the fool this year?"

"This is our new domestic market.

Zhu Shaofeng's Guangzhou Yi Si card Shoes Co., Ltd. has been in history for more than 20 years.

He introduced that when the financial crisis happened in 2008, many enterprises began to think seriously about how to get out of the predicament.

The leather industry in Guangdong is still in pition from OEM (OEM) to ODM (self design) to OBM (brand export).

"But this year is very difficult, even harder than 2008."

When Zhu Shaofeng talked about the survival of leather enterprises this year, he blurted out this sentence.

At present, most of the manufacturers in the market are still mainly export oriented, so they are affected by the international economic environment.

This year, the situation is even worse. The number of processing units has decreased, and the exchange rate has risen and domestic inflation has been severe.

"Who will expand this year is a fool. How many people will be able to do before 2007?"

Zhu Shaofeng said.

His views were also confirmed by the chairman of another footwear trade company.

"From the end of last year, the export situation was not very good.

Under the pressure of inflation, the consumption power of domestic sales is not strong, mainly because of the high-end products exported to Europe, the United States and other places, and the price of the mainland market can not afford to consume in the current market.

Guangdong Huidong footwear industry association secretary general and Huidong County silver and Trade Co., Ltd. Chen oil said.

He pointed out that the cost of the two years, the appreciation of the renminbi, the rise of domestic labor costs, the consumption power of the international market is still insufficient, our order volume can be maintained at most, a lot worse than in previous years.

"The price of raw materials is at least 10%."

Chen oil said, for example, the cow leather, last year we purchase 25 yuan / foot, and this year to 27 yuan / foot, a pair of shoes, then the skin is 1.2 feet, a pair of shoes only leather fabric 32 yuan / double, plus all kinds of costs, even if the factory price 100 yuan / foot last year, at least 110 yuan / foot this year, so that the larger the volume, the greater the cost.

"From the beginning of this year, the export orders in the Huidong region were only 15% lower.

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"Chen oil said that the international market was short in 2009. In 2010, a large number of international purchasers were purchasing large inventory, resulting in the decline in orders this year.

"Our factory can only maintain a balance this year. At least last year, it was a single quantity of 100 thousand pairs per month, and only 90 thousand pairs this year."

Chen said that workers also reduced their size from more than 300 to 260 last year.

"Many shoe factories in Huidong, the three production lines are now turning into two production lines. There were many shoe factories opened by people in Jiangxi and Hunan, and now there are basically no one left, so they can move back to their hometown and enjoy preferential policies."

Chen oil envied the expression.

Medium leather enterprises "dilemma"

"For small businesses, it has been shut down, and it is impossible to find a new opportunity for investment. For medium-sized enterprises, after all these years, there is not much chance to get up again, it is a dilemma."

Liu Weidong, Deputy Secretary General of Shenzhen Leather Association, told NetEase finance.

When Liu Weidong contacted NetEase, he was taking a group of manufacturers to explore the market in Jiangsu and Zhejiang, looking for suitable opportunities.

"Our May 28th number has already come out, and the next station is going to visit Shandong."

Liu Weidong said that this year, influenced by domestic inflation, labor costs will rise, raw materials will rise, and foreign exchange rate appreciation will be an enemy.

"Banks also like to be rich and poor, and most of their resources are tilted to the resources of large enterprises."

Liu Weidong said, "the leather industry is a labor-intensive industry. From the position of our industry, the 100-1000 artificial factory has been regarded as a medium-sized manufacturer. Therefore, the leather of Guangdong is basically a medium or medium to small scale.

Export has always been the main export business. At least half of the enterprises are mainly exported. "

In NetEase finance and economics talks, Liu Weidong has always emphasized that "policy factors" become the biggest uncertainty factor in the leather industry.

He pointed out that corporate profits began to decline in fact, since 2006, it has already begun to appear. In 2006, domestic economic growth dropped, the state promulgated relevant regulatory policies, the implementation of the new labor law in 2007, and the global financial turmoil in 2008; up to now, the macro-economy has been in the state of policy regulation, and Guangdong has implemented the plan of industrial pfer.

"In addition, the competition in the market, the strength of our own factors, some enterprises can not eat, only forced to scale down."

He added.

According to the survey of industry associations, more than 1000 large factories have been reduced to 300 people this year.

At least 90% of the leather industry enterprises in Guangdong province have been reduced to varying degrees.

Liu Weidong said that the difficulties faced by this small and medium-sized enterprises are still too fast for policy changes, and the small and medium enterprises affected by them are not able to respond well.

If the policy is stable, some preferential policies will be implemented and enterprises will benefit from it.

In addition, in terms of labor costs, these enterprises have to say "pain point."

"You have to pay a high salary this year for your order."

Zhu Shaofeng said that during 2007, the factory recruited a new person with a probationary period of 1000 yuan, plus 200-500 plus, but generally 1200 he could accept it. But now a small number of workers have paid 3000 to 5000 yuan a month, and technical workers are up to more than 4000 per month.

In addition to difficult to recruit, it is difficult to manage. "Now the workers are very difficult to manage. They dare not fire him. They are afraid to find no one if they fire him, and they dare not let him work overtime, but also delay the order time."

Chen oil used him to speak in Cantonese and said with reluctantly, "if you fire him, he will be able to work in the next factory in less than ten minutes."

The industry initially estimated that, after 4 years, its labor cost rose by an average of 40%, plus the increase in raw materials, and the two largest cost of labour intensive industries rose by 50%{page_break}

Small and medium brands only dare to "slightly increase" prices

NetEase finance in Guangzhou modern department store, Tianhe City department store and other shoe brand counters found that last year, BELLE's Staccato brand price between 700-800 yuan, this year basically increased to more than 1000 yuan, and the so-called cowhide material less than 1 square meters of material.

"This year, in the major shopping malls, we can see that some of the new footwear brands are basically priced at 400 yuan this year, but at a price of more than 600 yuan or more."

Zhu Shaofeng, general manager of the domestic sales division of Yi Si card Shoes Co., Ltd., said that the Rome style was popular this year, which was very complicated and costly. For example, BELLE, the biggest seller of footwear, this year, its footwear prices generally rose by 20%.

It is understood that because of their advantages in design, workmanship, consumer recognition, and inflation, consumers will choose to buy even if the terminal price rises.

However, small and medium-sized brands have not been so "reasonable" in terms of price rise.

"The cost of raw materials, labor costs and other kinds of taxes, pportation and other costs are soaring. A pair of shoes with medium and low positions will increase in price at 5-8 yuan per person."

Zhu Shaofeng said.

"For enterprises that have been engaged in export business, it is impossible to put eggs in a basket. Only by diversifying investment can we reduce risks."

Zhu Shaofeng said.

Based on this idea, their company set up the domestic sales department and began to do the domestic market.

"Now do not go out to look for opportunities, are we waiting for death?" Liu Weidong, deputy secretary of the Shenzhen Leather Association, said reluctantly that under the control of the government, only by sacrificing the interests of enterprises, many enterprises had been shut down in 2008.

Now it can only accelerate the elimination of backward production capacity faster.

"Now we have to come out and see what is happening in Jiangsu and Zhejiang provinces, and see if there are any possible opportunities for cooperation."

Liu Weidong told NetEase finance that Guangdong's internal and external sales are basically 46, and the competition for domestic enterprises is more intense. Now enterprises only have to maintain their mindset and increase profits, ensure relatively stable sales, ease sales pressure, and only shift outward opportunities.

"A lot of uncertain market factors, a lot of enterprise personnel dare not move, the money is also dare not vote."

At the end of the interview, Zhu Shaofeng said with great significance that at least a lot of enterprises were going to go bankrupt in June.