Dongguan Shoe Enterprises Struggle On The Line Of Life And Death

The ninth Dongguan international shoes exhibition, merchants are purchasing finished shoes.

The report said: the footwear industry in Dongguan is undergoing a painful pformation period. Some small shoe factories with poor strength are in the semi operational state. Large shoe enterprises are stable in order and in good condition.

For the news of CCTV financial channel on August 30th evening, well-informed Liu Daosong has already known the related content.

Liu Daosong, general manager of Dongguan Lekai Anji leather goods Co., Ltd., said: "Dongguan shoe enterprises do very little in their own brands. Many shoe companies are doing OEM (OEM), and rely on orders to survive.

This is the main sticking point of shoe enterprises' predicament.

In Guangzhou Zhongda Changjiang ingredient city.

He believes that at present, Dongguan shoe enterprises face at least four major tests.

First, foreign trade orders are reduced.

Because of this year's European and American economic stumbling, coupled with the Libya war and other factors, the shoe enterprises that rely on OEM for their livelihood are either short of orders or afraid to take orders.

Second, the impact of exchange rate will lead to a decline in export profits.

Third, because small and medium-sized shoe enterprises have neither collateral nor bank credit, the financing cost is high.

Fourth, labor costs and raw materials prices soared.

Liu Daosong said,

A pair of shoes earn only 20 cents.

The following is a set of data from the Ministry of Commerce: leather shoes on the American market, in 1976, 53 pairs of 100 pairs were produced in the United States, while in 2006, the United States produced only 1.5 pairs, most of which had been processed in other countries and regions.

It can be said that at the very beginning, this pattern created the Dongguan footwear industry, which is mainly oriented to the outside world.

Li Liangsui, general manager of Dongguan icannon Footwear Co., Ltd., said that a major reason for the decline of orders for shoe enterprises is the debt crisis prevailing in the United States and Europe, and some clients are very cautious because they are worried about the market prospect.

According to statistics from the Asian Footwear Association, conservative estimates of global shoe orders will shrink by 10% this year.

Because the shoemaking industry is a labor-intensive industry, the price of labor in Southeast Asia is low, and the comparative advantage of Chinese labor is no longer there. Some Taiwanese shoe enterprises have moved to Vietnam, Kampuchea and other places, and these enterprises have also diverted some orders.

Li Liangsui said that in China, a master can be three thousand or four thousand yuan, or even 5000 yuan, and only four hundred or five hundred yuan in Vietnam and Kampuchea.

On the one hand, orders are shrinking. On the other hand, shoe manufacturers are also facing enormous cost pressures.

It is understood that from last year to now, the price of leather has increased by 10% to 20%, and the labor cost has increased by about 15% annually. The appreciation of RMB has reached over 26% since its reform.

Zhang Huarong, chairman of Huajian group and chairman of the Asian Footwear Association, said that the labor cost could be controlled at 18% the year before last, which was about 20% last year and 23% this year.

A shoe company official revealed that the shoe industry was very sensitive to costs because of its small profits. 3 years ago, a pair of leather shoes of their factories could make about 1 dollars, and now only about 20 cents left.

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The way of managing Dongguan Wenshang

The 1 day of each month is the day when Dongguan Three Li Hardware Products Co., Ltd. has a fixed holiday.

At noon this afternoon, Ye Xinjin, the chairman of the company and Yongjia of Wenzhou, ran away to get a haircut.

He told reporters that in his spare time, he rubbed mahjong with a group of Wenzhou bosses in Dongguan. "But lately, they are playing less and everyone is busy with the company."

He said that the business of Wen Shang in Dongguan is quite good because of its large scale and generally taking account of OEM and domestic sales.

Ye Xinjin, for example, said that a few years ago, Lao Xu, from the head office of Yongjia county bridge to the shoe factory in Dongguan, used to be a "mahout" activist. However, because he was busy with AOKANG, cartel crocodile and Scarecrow recently, he had not been playing mahjong for a long time.

The reporter sent a warm call to Honest's shoe industry, Connie leather, Silver Eagle buckle, Weier leather goods and Bao rabbit dress in Dongguan, and relevant officials said that the company is in good condition.

Liu Daosong admitted that although the company's OEM orders decreased this year, he increased the annual output value and profits of the enterprises by increasing domestic sales and expanding network sales.

Jin Guojun, manager of planning procurement department of AOKANG procurement management center, told reporters that most of Dongguan shoe enterprises' OEM were foreign orders. In recent years, the number of shoes purchased by Wenzhou brand shoes enterprises to Dongguan was not large.

Self creation is the king's way.

The current situation of labor-intensive enterprises, such as financing difficulties, employment difficulties, electricity consumption and rising raw material prices, exists in Dongguan, the "world factory", and also exists in Wenzhou, the "shoe capital of China".

However, a significant difference between the two shoemaking industries is that most of Dongguan shoe enterprises rely on OEM orders to survive, while nearly 60% of Wenzhou shoe enterprises are mainly domestic sales and have their own sales network.

Statistics from the Asian Footwear Association show that in 2010, there were more than 1600 shoe enterprises in Dongguan, with an annual output value of 63 billion yuan.

Wenzhou Shoe Leather Association recently released data show that in 2010, Wenzhou 2573 shoe enterprises, the output value of 78 billion yuan, 60% footwear industry mainly for domestic sales; in the first half of this year, Wenzhou shoes exports 1 billion 990 million U. S. dollars, an increase of 30% over the same period, at present, Wenzhou's key shoe enterprises are still steady ahead.

Xie Rongfang, executive director and Secretary General of Wenzhou shoe leather association, said that although there were more than 100 shoe factories in Wenzhou this year, there were more than 100 shutdowns, but most of them were small businesses and were eliminated by competition.

In China's shoes brand occupies half of the country, "China's ten leading leather shoes shoes" in Wenzhou shoes accounted for six seats, 75 well-known trademarks in China.

In addition, Wenzhou shoe enterprises are good at holding together, and this is worth learning from Dongguan shoe companies.

In the Shanghai and Shenzhen stock markets, we also see that there are quite a few listed companies and main businesses in shoe making industry, including 22 shoemaking companies.

Most of them are scale production processors with independent brands, not simple export processing shoemaking, so most enterprises have a good profit level.

Taking Kaiser shares listed on the small and medium-sized board as an example, last year's earnings per share were 0.67 yuan, and the annual earnings per share were 0.154 yuan in the half year, but the gross profit margin of the company in 2008, 2009 and 2010 was 43%, 45% and 48%, respectively, showing that the profits were still very high.

In the past 3 years, the shares of Tai ya, which are engaged in sole production, have gross margins of 20%, 22% and 23% respectively.

Shoe enterprises seek upgrading for survival

In Dongguan, many shoe companies are also seeking pformation and upgrading.

Li Liangsui, the boss of icannon footwear, has been busy researching the market for her high-end women's shoes in the past few months.

Li Liangsui said he found that China is not short of shoes, especially the middle and low grade shoes, but the high-end brand shoes are missing. Some of the high-end, exquisite and handcrafting shoes of Italy and Spain are missing.

Like Li Liangsui, there are many shoe business owners who rely solely on the export market. Enterprises are hard to survive and develop. When they completely abandon the export market, they generally begin to test the water domestic market.

Shen Hong, deputy general manager of Dongguan Xin Ruida shoe industry Co., Ltd., said: "the next step is to turn to domestic sales, domestic marketing is done together, domestic marketing is growing, such as Daphne, thousand degrees, and other good brands are growing, adding some stores in China, so the quantity needed is relatively large."

Experts say that from the perspective of the history of the world shoe industry pfer, the world's shoe industry center is shifting towards low labor prices, but the previous shoe base will not completely decline.

30 years ago, Italy was similar to today's Dongguan. It is the world shoe center, with a large scale. Although the shoemaking base has been pferred to China, its position has not declined.

Although the comparative advantage of Dongguan's labor force is no longer exist, the developed industrial chain and the related modern service industries are temporarily unable to surpass the low labor cost countries.

In addition, China's vast domestic market has not yet been fully excavated.

These advantages bring great development space to Dongguan shoe industry.

Zhang Huarong, chairman of Huajian group, said that 80% of the world's footwear traders are in Dongguan. Maybe 35 years later, 60% to 79% designers will come to Dongguan. Dongguan is very dynamic. The footwear industry is very promising.