AOKANG Leather Shoes: Deep Ploughing Industrial Chain

2007 the best business mode: Sixth AOKANG shoes: deep tillage industrial chain, the full name of enterprises: AOKANG Group Co., Ltd.: Wang Zhentao's main business: shoe industry highlights: August 2006, China's first "measuring shoe machine" was born in AOKANG.

In March 2007, AOKANG became a supplier of leather products for the Beijing Olympic Games in 2008.

The core logic: AOKANG is building the most complete and largest production system of China's leather shoes industry, and will form a development pattern of the footwear industry which is linked by the East and the West.

AOKANG has formed a "large production" pattern of three production bases, namely, the headquarters production base, the north international brand industrial park and the AOKANG production base of the West shoe capital.

Among them, the Wenzhou headquarters production base mainly deals with domestic product production; the AOKANG production base of the western shoes capital mainly produces low-grade products, which is the foundry for the world's retail giants. The international brand industrial park mainly attacks high-end products, becoming the main production base of the international brand OEM and Italy GEOX breathing shoes.

The whole system presents a pyramidal strategic layout, forming a hierarchical footwear production system.

In addition, the birth of China's first "measuring shoe machine" will provide conditions for personalized production for AOKANG, and a technological change in shoemaking industry is beginning to show itself.

In August 27th, Huadu, Guangzhou, AOKANG group branched over to the south, and signed the "international fashion leather city" with the Shilin Town of Guangzhou Huadu known as "China's leather capital".

The construction of the capital in the west, the Xingxing street in the central part and the construction of the city in the south are another important step in the industrial layout of AOKANG after the layout of the western region and the investment in the central part.

In the face of the overcapacity of China's footwear industry and the increasingly fierce competition in the market, why did Wang Zhentao attack all sides and launch a series of investment activities in a high-profile manner?

In fact, it is precisely because of the gradual decline of the production mode of the traditional footwear industry that prompted AOKANG to think: whether the original shoemaking production is enough to sustain the sustainable development of AOKANG, and if we want to extend to the industrial chain, how to innovate the production links, how to create high-end brands and how to catch up with the product design are all a series of problems that need to be solved in the deep ploughing of the industrial chain.

From the single flight to the cluster development, the shoe making industry is a labor-intensive industry. When AOKANG has completed its original accumulation, it will inevitably encounter bottlenecks if it wants to continue to grow bigger and stronger.

Therefore, the characteristics of Wenzhou enterprises' capital advantages are beginning to appear. With the familiarity of the shoe industry chain and the strong financial strength, AOKANG began to conceive a blueprint for building a complete industrial alliance from one enterprise to another. Thus Chongqing Bishan has entered AOKANG's vision.

In January 9, 2003, AOKANG signed an agreement with the Bishan county government to create the "West China shoe city industrial park" agreement. In September 28th, the main project of the park was officially laid the foundation.

When the land market is monopolized by the government, a private enterprise dares to invest 1 billion yuan to build an industrial park of 2600 mu, which set a precedent in the whole country.

According to the plan, the whole park can accommodate hundreds of shoemaking enterprises and nearly a thousand supporting manufacturers. After the completion of the project, the annual output of leather shoes exceeds 100 million pairs, and the annual sales revenue will exceed 10 billion yuan.

Due to the brand effect of AOKANG, the development and construction of the park has led to the follow-up of the supporting manufacturers and sales merchants. The 12 shoe industry pride of Wenzhou shoe material, Hangzhou Xinghua leather machinery, Chongqing Yuhua footwear industry and so on have been officially admitted, and the first 937 acres of industrial land have been arranged.

Most of the 566 shops have been snapped up at the opening of the southwest shoe material trading center.

Zhong Pengrong, a famous economist, points out: "AOKANG brings to the west not only the effect of a leading enterprise, but also an industrial chain."

From the low end to the high-end, AOKANG has the advantage of marketing management. But when AOKANG is not satisfied with the low end of the industrial chain and is ready to climb up, its brand positioning seems to be out of tune: AOKANG has long been positioned in the two or three tier cities, aiming at the salaried class, and the retail outlets are mostly located in the bustling commercial streets of prefecture level cities.

In April 2003, a brand survey showed that the brand difference between "wearing AOKANG and Sifang" is not strong enough, lacking distinctive brand personality, and the brand is already close to aging, lacking affinity and fashion sense. It is considered by some consumers to be a local brand, which means that AOKANG can only win by price.

In order to break the inertia of consumers' minds, AOKANG changed its face on the one hand. VI changed from "AK" Phoenix to AOKANG, and launched the third generation store image. It inherited the original hue, but changed from red to dark red, highlighting the international sense and modern sense. The core brand advocated that "dream is coming out" instead of "wearing AOKANG and going all directions".

On the other hand, AOKANG also played the banner of "internationalization" and highlighted the international elements in brand promotion.

Unlike some of the enterprises talking about internationalization, as early as 1999, Wang Zhentao was in the layout of internationalization. He invited Italy designer Maria to be stationed in Wenzhou for millions of years, and opened the first pnational chain store in Soho, New York.

But these are just dragonflies, until Wang Zhentao really gets excited when he meets GEOX.

Italy famous brand GEOX is the first famous brand in Europe and seventh in the world. It is famous for its "breathing shoes".

In February 2003, AOKANG reached a cooperation agreement with GEOX and set up a joint venture in Pudong, Shanghai. GEOX will take advantage of AOKANG's network and use AOKANG as a production base. AOKANG will borrow GEOX's sales network in 58 countries.

GEOX wants to borrow AOKANG to enter the Chinese market. AOKANG wants to raise the brand level and realize the dream of internationalization through GEOX.

"We cooperate with GEOX, in fact, we have invited a free teacher, the director of more than ten factories in the world.

After the process reform, our production efficiency has doubled. "

Zhou Wei, director of AOKANG group administration center, said.

AOKANG's knowledge sharing is very good. The headquarters production cadres are interchanging with the production cadres in north of the union. So naturally, AOKANG will apply the experience learned from GEOX to the whole company.

Zhou Wei said: "it is not our goal to earn money from foundry. What we want is to learn. Finally, what we need to do is AOKANG brand".

GEOX has more than 100 sales outlets in China, with sales of nearly 100 million yuan last year.

In addition to its own brand, it has become another brand that contributes to AOKANG's sales and profits.

Another achievement of Wang Zhentao is that, because of GEOX's OEM order to AOKANG, other foreign high-end brands are also following orders.

He has signed an order contract for 300 million yuan next year.

AOKANG's efforts to upgrade to the high end have shown the effect.

In June 22, 2007, AOKANG Shanghai flagship store was located in Shanghai international shoe city with a business area of nearly 2000 square meters.

AOKANG's AOKANG shoes, Kanglong casual shoes, beautiful ladies shoes, red Firebird leather shoes and other brand shoes all appeared in the international shoe city.

Up to now, AOKANG has opened more than 80 stores in Shanghai, plans to break through 100 at the end of the year, and has signed strategic alliances with Shanghai Bailian Group, a listed company, plans to move forward to the 20 shopping malls of the group at the end of the year.

From the standardised production to the popular design, the top of the shoe industry chain should be the design and research and development. Wenzhou is not the fashion frontier. How should AOKANG design shoulder to shoulder with the leading manufacturers?

In 2007, AOKANG international R & D center moved from Dongguan, Wenzhou to Dongguan to close to the shoe making industry in southern China.

Many of the fashion trends in the global fashion industry originated in the UK. These designs are not easy to accept at the beginning, but this trend will spread to the European continent. After the interpretation of France and Italy, it will spread to Asia.

Japan and South Korea are the countries that crave the popularity of international brands. The next stop is Dongguan - where fashion information is rapidly pformed into different industries.

This is also the reason for attracting large traders who send tens of millions of orders to Dongguan.

"We will use Dongguan as a window to expand our internationalization," said Gu Feng, deputy director of AOKANG international R & D center.

"Dongguan is very special. After the version comes out, the sample is confirmed and tried out. Foreign businessmen are required to complete it in Dongguan.

In the past, we did not set up R & D centers in Dongguan. After the confirmation of foreign orders, foreign businessmen would have time to go to Wenzhou factories with us.

Although the three production bases are very satisfied, we believe that the technology and equipment in the country are top-ranking, but many businessmen do not want to go to Wenzhou to confirm that they want us to develop R & D centers in Dongguan.

Compared with Dongguan, Guangdong, Italy is closer to the starting point of fashion.

In order to get first-hand informative information more quickly, AOKANG set up a research and development center in Vergy Vano, a traditional shoemaking town near Milan (Vigevano). From here, designers and craftsmen were invited to return from Wenzhou to Italy, bringing new technologies, new materials, new design concepts and styles to Wenzhou for a re integration of AOKANG designers.

The globalization of shoemaking industry brings about globalization of demand.

AOKANG invited a Taiwan designer who has a design studio in the UK, so that he often travels to the United States and Britain, and specializes with European and American sales companies and purchasing groups.

Seeing the demand and bringing the information back to the R & D department, the factory can make the shoes that customers really need.

To the forefront of customization, "shoes are not fit, only feet know", and shoes that are truly fit are all very personalized products, but they are difficult to solve in traditional industrial production.

However, Haier designs personalized refrigerators through the Internet, and DELL makes personalized computer assembly through telephone. It shows that meeting the needs of personalized customers is a huge potential market. Once excavated, it will become the trigger point for leading the industry change.

In this regard, AOKANG has been at the forefront of the world.

AOKANG's investment and development shoe-making machine was announced.

It originated from Wang Zhentao's idea of a wild sky: which day AOKANG opened the "store without shoes", only a computer was placed in the shop, the customers had a good foot shape, and the shoes were selected for their styles, colors and materials, and then delivered to the door after the customization was completed.

He thinks from "tailoring" to "measuring shoes".

The idea that came out a few years ago contributed to the emergence of AOKANG's first shoe measuring machine.

According to our understanding, the development of measuring shoe machine has invested about 3000000 yuan. At present, the first machine has been completed by experts from Zhejiang University.

Measuring shoes machine is not the first in the world.

Wang Zhentao said that as far as he knows, one company in Britain and Canada has developed a shoe measuring machine, but the machine is too expensive to be promoted.

The cost of the machine developed by one company is about 7000000 yuan.

A Italy leather shoes brand has customized points in Shanghai, and the price of each pair of shoes is more than 6000 yuan.

Unlike them, Wang Zhentao decided to choose the direction of popularity rather than targeting a few high-end clients.

He thought: "in 3 to 5 years, every AOKANG store has a machine, and every ordinary consumer can enjoy customized services."

The premise of popularization is to reduce costs.

The first machine developed by AOKANG costs 200 thousand yuan.

They plan to reduce the cost to 6~7 per machine in 3 months, and control the cost to 30 thousand yuan per unit within 1 years.

In addition, the production cost of each pair of shoes may increase as a result of customization.

Wang Zhentao introduced that due to the improvement of leather shoes production equipment in recent years, the cost of customization and mass production is not going to rise too much.

In the short term, the significance of AOKANG's development of shoe-making machines is personalized service, zero inventory management, and the promotion of information technology in enterprises.

In the long run, Wang Zhentao believes there are more business opportunities worth digging.

For example, measuring shoe machine may become an industry itself, and the database itself has commercial value.

"Let tens of millions of feet of foot data remain in AOKANG's computers," Wang Zhentao said. "Getting these data and making their owners the lifelong customers of AOKANG is the most precious asset I want."

Zhou Wenming, the deputy general manager of AOKANG China consulting consulting service office, represents the history of Chinese footwear enterprises, and the typical development process of Chinese traditional manufacturing enterprises.