OEM Shoe Enterprises Die For Life And Death

Labor costs rise.

In March 31st this year, the EU nearly 5 years of China.

However, contrary to expectations, in July 30th, a 20 year old shoe manufacturer in Xiaolan announced that it was going to stop production because the company could not get new orders.

Another family in Zhongshan

Between life and death, is every choice of shoe companies "forced" or "voluntary"?

The EU anti-dumping duty on Chinese leather shoes was officially terminated in March 31, 2011, and it has been nearly 5 months now.

At the moment when the EU was about to terminate the anti-dumping duty, many shoe companies in Zhongshan excitedly indicated that orders should not be worried in the future.

It is understood that in the most severe financial crisis in 2009, Zhongshan footwear export volume and batches showed a double decline. By 2010, as the EU insisted on high anti-dumping duties on Chinese leather shoes, footwear exports did not recover significantly, so in early 2011, many shoe companies were still worried about orders.

When the European Union announced the termination of anti-dumping duties on leather shoes, many shoe companies breathed a sigh of relief, and the broad EU market seemed to open the door for them at a draught.

With the increase of labor costs, raw material prices and frequent fluctuations in the RMB exchange rate and other unfavorable factors, the EU's abolition of anti-dumping duties is undoubtedly good news for Zhongshan and even China's export shoe enterprises.

But the good times did not last long. Then many shoe manufacturers concerned responsible persons said in an interview with reporters that the EU's subsequent monitoring measures against footwear seemed to indicate that the road to enter the European Union was not smooth.

It is understood that, while canceling anti-dumping duties on leather shoes, the EU has also introduced a number of monitoring measures, including weekly key monitoring to ensure that there is no unfair behavior and pay attention to the various government subsidies enjoyed by Chinese footwear enterprises.

The relevant person in charge of Zhongshan Tong Jia shoe factory said that the most direct advantage of the EU's anti-dumping duties on Chinese leather shoes is that the cost of pressure reduction is the most direct benefit of Chinese shoe enterprises. However, due to the existence of many uncertain factors in the international market, all parties, including EU businessmen, have a wait-and-see mentality, and orders from the EU are hard to change at once.

On the other hand, EU's trade protectionism measures such as "technical barriers" to China's footwear industry will also exist, and the situation should not be too optimistic.

In fact, according to the statistics of Zhongshan customs, Zhongshan footwear exports from 1 to July increased by 670 million US dollars, an increase of 10.5%, and no export blowout appeared after the EU's termination of anti-dumping duties.

How long can it last?

The relevant staff of Tong Jia shoes and associated Kai shoe industry said in an interview with reporters that in the near future, the company did not directly feel the benefits brought by the EU's termination of anti-dumping duties on leather shoes.

"The biggest problem that bothers us is the exchange rate problem. We dare not take the long list. We have to be cautious when we take orders."

The relevant person in charge of the Kai Kai shoe industry said that when the international financial crisis broke out, orders were "life-saving straw", and now orders have become "hot potato", and even there are orders not to answer.

Since the beginning of this year, the appreciation of RMB has been unstoppable. Recently, it has entered the "6.3" era.

For Zhongshan shoe enterprises, which are mainly exported to Europe and America, the exchange rate risk is a problem they must face.

It is understood that most shoe enterprises are settled in US dollars, and the settlement period is mostly between 3 and 6 months.

In the first half of this year, tight banking led to obvious capital chain tension in small and medium-sized enterprises, including shoe industry. "Money shortage spread" has even become the fuse for many small and medium-sized enterprises to go bankrupt.

In addition, enterprises with difficulty in capital turnover have to face the helplessness of rising labor costs and rising raw material prices.

Take the plastics and leather commonly used by shoes enterprises as an example. Due to the high impact of the international crude oil prices, plastics and other oil add-on products also follow the "rising trend", squeezing the profit margins of the shoe enterprises, and the recent fluctuations in the price of plastics have made some shoe enterprises at a loss.

In fact, in addition to the exchange rate risk, many shoe companies are cautious to take orders. Influenced by the debt crisis in Europe and America, the continuous shrinking of orders from Europe and the United States has also led many shoe companies to encounter "June snow."

In July 30th, a thousand shoe making enterprise in Xiaolan suddenly announced that it would stop production and dismiss all employees.

Qiu Yuefeng, deputy general manager of the shoe enterprise, told reporters that the factory was shut down because there was no order.

Because of the depreciation of the US dollar and the decline in US consumption power, the shoe industry has entered a struggling period this year.

"When the RMB appreciation, domestic inflation, labor costs rise and other factors hit at the same time, as a foundry enterprise, the original advantage vanished."

Qiu Yuefeng said that this year, several major customers of shoe enterprises have reduced orders and gradually pferred orders to some countries with lower labor costs in Southeast Asia.

Transformation, the choice of life and death

As a foundry enterprise with more than 20 employees and over 1000 employees, it collapsed when the traditional export season was coming.

One example also seems to be a sign of the time of internal and external difficulties. As a traditional OEM shoe manufacturer, if it can not change early, shutting down or closing down is only a matter of time.

Qiu Yuefeng told reporters that after the start of this year, the company basically did not receive new orders, and only relied on the orders received last year. "After entering May, the original order was finished, and no new orders were received."

In addition to the sharp deterioration of the external environment, the company's shutdowns may also be able to find out the reasons from inside. According to the relevant person in charge of the plant, "the factory buildings are smaller, machines are outdated, and large customers are reluctant to place orders when they visit factories."

Under the internal and external troubles, some OEM shoe companies died because of their old habits. Some OEM shoemaking enterprises were born with positive innovation.

As the carrier of Zhongshan's foundry industry, tens of thousands of employees are left behind by Bao Yuan shoemaking, and many domestic and foreign troubles encountered by other shoe companies fall on many of them. They all say that the boat is small and good turn around. Bao Yuan shoe factory did not give up the U-turn because of its bad turn.

The reason why Bao Yuan shoe factory has gone out of this step is to innovate its business mode in the context of increasing labor costs, labor shortage in the coastal areas and the basic pfer of manufacturing industries.

Starting from the low value-added foundry industry, many enterprises have gained a firm foothold, and "independent brand" has become a stumbling block for their pformation and upgrading.

From "manufacturing" to "creating", the road is not easy.

The contradiction between the existing foundry business and the self created brand is often the embarrassing problem faced by the manufacturing enterprises on the road of pformation.

"The commodity market can have a channel brand like Watsons. Why can't we make shoes?" as a successful Zhongshan enterprise in pformation and upgrading, Zhang Yuzhou, deputy general manager of Bao Yuan shoe factory, does not think that the company is creating "independent brand".

"To be more precise, we create a channel brand, or a channel brand."

The "channel brand" in Zhang Yuzhou's mouth was the FOOTZONE of Bao Yuan shoemaker, which began operation at the beginning of last year.

"At the same time, if we create our own brand, we may lose the risk of the original OEM business."

The background of the pformation and upgrading of manufacturing industry, the increase of labor cost in manufacturing industry, and the serious shortage of coastal labor force......

A series of factors make Bao Yuan shoe factory begin to turn its sights to the domestic demand market under the premise of ensuring the superiority of manufacturing industry.

Obviously, Bao Yuan shoe factory has also learned about the crisis. The differentiation route and channel innovation have quietly become their trump card in the "creation" field.

Opening a door does not usher in sunshine.

access

Refers to the intermediate sales process from the production to the consumer use of the products, and the industry is accustomed to understand the "channel" as the channel is the circulation channel.