Coastal Shoe Enterprises Move To Cope With Cost Chill
A fierce cold current has attacked the shoe enterprises in Guangdong.
"In the first 3 quarters of this year, there are about 1000 shoe factories and related shoe materials, leather, shoe making equipment, hardware and chemical industry, footwear trade and R & D design center in Guangdong area, which are closed down by various internal and external factors, or are closed by the courts or taken over by the local government."
Li Peng, secretary-general of the footwear association of Asia, said in an interview in November 29th.
Statistics show that, in these footwear enterprises that stop, stop and seal, Chinese footwear enterprises account for about 55%, Taiwanese and Hong Kong shoe enterprises account for 25% and 10% respectively, and other shoe enterprises account for 10%.
In order to cope with this cold current, more than 600 shoe companies at home and abroad, together with many senior traders in the world, have gathered in Dongguan, Guangdong, to participate in the "global footwear industry forum" held here.
"The footwear industry in China, especially the footwear industry in the coastal areas, is facing unprecedented challenges, and we must accelerate the development of strategic pformation."
Li Peng said.
The cost is strict, forcing data to show that coastal shoe enterprises are moving towards the central and western regions.
"Compared with the central and western regions, the eastern region has less and less cost advantages, and is obviously at a disadvantage in terms of labor, land and energy. Industrial pfer is the general trend."
Li Peng said.
The first thing that troubles shoe companies is labor shortage.
"Now it's very difficult to recruit shoes in Guangdong.
In the past few years, the salary was only eight hundred or nine hundred yuan, but now it is more than 1000 yuan.
Li Peng said, "the average monthly wage cost in Jiangxi, Anhui and Hunan is about 200 yuan cheaper than that in Guangdong, so the factories in Guangdong often only recruit 35 people in 1000 factories, limiting the production of shoemaking, and some factories that can not support them can only be closed down."
As labor costs rise, other kinds of costs rise.
In order to retain workers, some shoemaking enterprises in Guangdong have to improve the environmental quality of their dormitories, such as air-conditioners, and so on, and the cost of management is also rising.
Shortage of land is also an important issue.
"In Dongguan, there is no spare land to expand production and construction for these enterprises. Now the land price is also very expensive, and can even reach 50 - 600 thousand yuan per mu."
Li Peng said.
The high cost of electricity is adding to the shoe industry.
According to the introduction, the electricity charges in the central region are generally low, for example, the electricity charges in Jiangxi are generally 0.5 - 0.6 yuan / degree, which is nearly half as low as 1 yuan / degree in the coastal area.
The 1 to 20 thousand shoe making enterprises can use electricity up to one million degrees per month, and thousands of factories also need hundreds of thousands of degrees per month.
In addition, the new processing trade policy is also bad for shoe companies.
"In August this year, the state expanded the catalogue of processing trade restrictive commodities." in the eastern part of the country, processing trade needs to be implemented by bank guarantee, while the central and western regions do not have such a restriction, and the cost of capital has increased by more than 10%.
Li Peng said.
In Southeast Asia, apart from the Midwest, some shoe companies are looking overseas.
Wang Ying, secretary-general of the China Light Industry Crafts Import and Export Chamber of Commerce, told reporters that in order to solve the risk of rising costs, some large shoe factories are decomposing and pferring to countries and regions with lower cost in Southeast Asia, India, Indonesia, Kampuchea and other Southeast Asian countries. Taiwan shoe industry alligators, Bao Cheng, ang ang Feng Tai, have all been pferred, and this trend is continuing to spread.
Wang Ying believes that such pfer is conducive to the test of RMB appreciation.
If a shoe company accumulates 50 million US dollars a year and a RMB appreciation of 3 percentage points, the direct loss will only be 1 million 500 thousand yuan in the whole year, equivalent to 11 million 250 thousand yuan, which does not include the rising price of raw materials and labor costs arising from the appreciation of the renminbi.
According to the insiders, some shoe companies moved to Southeast Asia because of the upcoming implementation of the labor contract law.
The new law stipulates that "no written labor contract is deemed to have been signed by both parties for a fixed term of labor contract". "Labor contract termination also requires payment of economic compensation". "Illegal labor contracts should be paid two times the economic compensation". "Dismissal of employees should be notified to the trade Union". "Staff resignation is not given 30 days notice, and 2 months' wages should be paid".
The impact of export tax rebates should not be ignored.
"All export enterprises in the world have full tax rebates.
Since July 1st this year, the export tax rebate rate of the footwear industry has been reduced from 13% to 11%.
If the trade surplus is high, the export tax rebate rate will be further reduced.
This basically depends on the export tax rebate to obtain small profits, and even some enterprises are completely dependent on export tax rebate to maintain the survival of the footwear industry will have a significant impact.
Wang Ying said.
In addition to the above factors, Chinese shoe companies are also facing a severe test of foreign anti-dumping.
In October 2006, the EU imposed a 16.5% high anti-dumping duty on Chinese leather shoes enterprises for two years.
In June 2007, Taiwan also imposed 43.5% anti-dumping duties on 6 types of footwear products in the mainland.
"If the euro does not appreciate faster this year, domestic shoe companies may suffer from the disaster."
Insiders said.
Calling for branding to face the severe challenges of the domestic and international market environment, some enterprises have already "heard the wind" and vigorously implemented the strategy of branding and internationalization.
Among them, "Italy" pioneered the form of two way OEM and developed into an international market with the development of the footwear industry in Hongkong. "AOKANG" directly built the Industrial Park overseas; "BELLE" was successfully listed in Hongkong; Lining, Anta, XTEP, Binxing, Kangnai, BELLE, BELLE, red dragonfly, golden monkey and so on also made great achievements in brand building.
On the "global footwear industry forum", Zhang Huarong, President of Huajian group, China's largest women's shoe manufacturer, released opinions on the five quantities of "world weight", "Chinese quality", "technical content", "brand energy" and "national strength", and won the resonance of the top shoe companies.
"China is already the world's largest footwear producer, exporter and consumer country, occupying 68% of the world market, but not yet 68% of its weight, and its pricing power is in the hands of foreign investors.
In the future, we should gradually gain the right to speak and gain the respect that the world should have.
Zhang Huarong said.
He believes that at present, many domestic shoemaking enterprises do stay in the manufacturing stage of low and medium grade products, but the footwear enterprises developed in the OEM mode, especially those in the coastal areas, are all produced and processed for the world's top brands. Once these enterprises exhibit their self brand through the experience of years of study, their quality and grade are no less than that of the world famous brand products produced by OEM.
"Shoemaking enterprises must re decompose the shoemaking process and the industrial chain, and dare to shift the low value-added part to the high value-added part, namely the high-tech part.
From the aspects of product design, shoe last manufacturing, mold development, channel distribution and so on, it has become the key object of technology investment for many shoemaking enterprises in China, and its demand for high-quality scientific research personnel is no less inferior to that of the electronics industry.
Zhang Huarong said.
"With the gradual loss of competitive advantages such as labor costs, there is no way out for OEM alone."
Zhang Huarong said that it is necessary to build a brand through its own marketing and acquire the ownership and distribution rights of other mature brands through acquisition and merger, so as to gradually develop its own brand.
At this stage, the shoemaking industry in the coastal areas can firmly grasp the important links of R & D, trade, brand building and sales channels, and gradually pfer the production part to the cities in the mainland to promote each other.
"The development of China's footwear industry in the future is inseparable from the unity and strength of national enterprises.
At present, China's footwear industry is still in the stage of individual heroism. It is very distressing to compete at low prices and vicious competition.
Now is the time to work together with one heart and one mind to create a Chinese brand together.
Zhang Huarong said with impassioned voice.
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