Dongguan Shoe Enterprises Are Struggling To Break Even.

　 3 years ago, a pair of leather shoes earned 1 dollars, and now it can only earn 20 cents. This is the current situation of Dongguan's export-oriented shoe enterprises.

Recently, the shoe industry in Dongguan has constantly heard the news of factory closures. Even thousands of shoe companies, which are thousands or even thousands of people, are reducing production scale in a large scale to cope with the shortage of orders and rising cost pressures.

"In the context of a series of high costs, Improvement trade It has completed its historical mission, and primary processing is doomed to be eliminated. It is imperative for enterprises to transform and upgrade. Experts believe that.

　　 European and American businessmen are no longer generous.

"Conservative estimates of global shoe orders shrink by 10% this year." Footwear industry in Asia Li Peng, the Secretary General of the association, told reporters about the overall situation of China's shoemaking enterprises this year, revealing its optimistic attitude towards the situation.

Even the European and American businessmen who have always paid attention to design and detail, and are very generous, have become "calculating".

Dongguan Huahong shoe industry has recently received an email from the head of Spain's MENBUR brand. The price is higher than that of last year. Some prices are too high to sell. The economy of Europe is worse now. If we give a better price, our market competitiveness will rise and the quantity of orders will increase. If one of the shoes is decorated without beads, the price should be reduced a lot. Please tell me the price of the buckle.

In the mail, he also specifically mentioned, "do you charge 1.2 dollars for a shoe bag? It's too expensive. We have changed it into a $0.25 bag."

And the shoe factory not only recently raised the price of a pair of shoes for a customer by 10 cents, but was threatened by the customer's request for a change of order. That night, the customer called the shoe factory. Yang Yongqing, the general manager, told the other party that the price would not go up. The customer flew to Dongguan from abroad second days later.

"I was shocked when I received the phone call. I never had a customer who went to the door without saying hello. The customer directly went to the factory and randomly checked all kinds of costs. After verification, we found that we had almost no profit and finally reluctantly accepted the price increase. Yang Yongqing said helplessly.

The profit margin is only 1%.

Statistics show that the average annual increase in labor costs is about 15%, and leather stocks have risen by 10% - 20% since last year. Since then, the appreciation of RMB has risen to more than 26%. In addition, Dongguan shoe enterprises will have to cut power for two days a week, and the factory will cost 50 thousand yuan per day for generating electricity. Multiple factors superimposed on it, more and more shoe companies are struggling to break even.

Yang Yongqing has a deep understanding of this. 3 years ago, a pair of leather shoes It can earn about 1 dollars, and now only about 20 cents, and the cost of a pair of shoes will cost 120 yuan, with a profit margin of about 1%.

"We must make the cost accounting precise and precise. We must keep a close watch on every link in the production process. Once the product is reworked, it will be lost." Yang Yongqing said that export orders declined this year.

Bei Youping, the general manager of bey shoes, who entered the footwear industry in Dongguan earlier than Yang Yongqing, has a bigger gap.

"When we opened the factory in Dongguan in 1987, we had a lot of orders. Sometimes we worked overtime in factories for two days and two nights. At that time, the monthly salary of a worker was only 100 yuan, and it was easy to recruit workers. Exporting a pair of women's shoes of 4 dollars can earn 2 dollars or so, with a profit margin of about 100%. Bei Youping told reporters, "now the export price of a pair of shoes is two or thirty dollars, but the average monthly salary of employees is 2800 yuan, the manager's monthly salary is 16 thousand yuan, the cost is rising and the appreciation of the renminbi is RMB, and the profit margin of 1% is hard to guarantee."

Even Zhang Huarong, chairman of Huajian group, China's largest women's shoes manufacturing and export company, has recently been in a media interview and even sighed "difficult" for corporate profits. Zhang Huarong said, "labor costs rose by 20% in the first quarter of this year. We must keep a close eye on profits and profit margins, and no longer pursue expansion of scale."

Huajian mainly OEM for NINE WEST and other international famous brand shoes, although the scale advantage, but its current profit margin is only 3% - 4%. {page_break}

　 Improving survival skills

The latest data released by the General Administration of Customs recently showed that in July, the export of Dongguan to the US suffered the first negative growth during the year, due to the debt crisis in the US and Europe and the depreciation of the US dollar.

Zhou Shijian, a commentate expert of the Ministry of Commerce, described the fate of Guangdong's foundry with "no alternative". He believes that processing trade has completed its historical mission, and primary processing is doomed to be eliminated. Transformation and upgrading of enterprises is imperative.

In the face of severe reality, the export oriented footwear industry in Dongguan is undergoing a fission. Dongguan shoe companies are trying to improve their survival skills, including renewing quotes, defusing exchange rate risks, transferring industrial capacity and exporting to domestic sales.

"Workers in Bangladesh have a monthly salary of only RMB 100 yuan. With the world's largest sports shoe manufacturer, Baocheng set up factories in the area, the monthly salary of workers has risen to more than 300 yuan, and the number of workers in Taiwan funded shoe factories has reached 50 thousand." A shoe manufacturer in Dongguan said.

At the same time, Huajian and many other shoe enterprises in Dongguan have also become the supporters of "South shoes north and East shoes moving westward". Brazil international trader, even Dongguan has moved half of its business to Sichuan and Shandong Qingdao, and has also built a shoe-making line in Chongqing, and many enterprises have begun to try to export to domestic market.

"It is hard for me to see those workers who have worked with me for more than 20 years." Bei Youping said he is also thinking about how to transform the company next.