Cost Engulf Profits, Export Shoe Enterprises' Capital Chain Is Trapped In A Vicious Circle.

The 110th session just concluded Canton Fair And the fourteenth session Dongguan international shoes exhibition Many export shoe enterprises are deeply disturbed. The high cost almost encroached on the profit margins of enterprises. At the same time, the capital chain also had problems of convergence.

Serious compression of profits

"Compared with last year, the number of buyers visited at least half this year." production Women's Boots Li Jin, sales manager of Chengdu hi tech industrial limited liability company, said that the cost of shoemaking increased by 10% - 15% compared with last year, and many purchasers could not accept the price increase. In order to keep the old customers, they only sold their shoes to old customers in a way of "small profits but quick turnover". Now the gross profit of products is less than 10%.

since this year on Raw material The price has soared, the RMB has continued to appreciate, the cost of labor has risen substantially, the profits of shoe companies have been greatly reduced, and the pressure of international competition has increased. The situation of Global trade protection is still grim, and export shoe enterprises are beset with difficulties.

The responsible person of Zhejiang Taiji shoe industry Co., Ltd., which produces men's casual shoes, also said that the shadow of new customers is hard to find in this Canton Fair, and the new customers are more conservative than before. According to its introduction, the product price of the company increased by nearly 80% compared with that of six or seven years ago, but profits have been continuously compressed. At present, the gross profit of each pair of shoes is only 5% - 6%.

It is the rising cost of shoemaking that compresses the profits of China's shoemaking enterprises. According to customs data analysis, the price of raw materials such as leather, rubber, plastics, chemical fiber and other raw materials has been rising continuously since the beginning of this year. The price of domestic pig skin has risen from 40 yuan to 50 yuan last year to 80 yuan to 90 yuan, and has now exceeded 100 yuan mark. Other raw materials are also rising, plus recruitment difficulties and state adjustment of minimum wage standards and other factors. The average cost of labor in shoemaking industry has increased by 20% - 30%. On the other hand, the RMB exchange rate continues to rise, further increasing the exchange loss of enterprises.

Statistics show that since the second half of this year, the export of footwear commodities in Guangdong has shown a sharp decline in the monthly growth rate.

　 Poor convergence of capital chain

What is worse is the tight chain of funds resulting from the slash of export profits of shoemaking enterprises, causing enterprises and fabric suppliers to fall into a vicious circle.

Some enterprises disclosed that the funds pressure of medium and small shoe enterprises is very large nowadays. Generally speaking, enterprises can only get 30% of the amount of advance payment paid by the purchasers, but they need 60% of the funds to run the order, and the bank loans do not favor the small and medium-sized enterprises.

Reporters learned that, because the fabric suppliers fear that the shoemaking enterprises are "empty" because of the broken capital chain, they usually do not dare to take orders easily, or raise the thresholds for getting goods, and increase the quantity of new fabrics. However, the small and medium sized shoe enterprises that are not well-off can not afford to take a lot of orders, so they are forced to use material suppliers' stock fabric, which is a breach of contract with buyers and reduces the credibility of export enterprises.

"The current situation is really not conducive to small and medium-sized shoe enterprises, and see whether we can recover in the second half of next year." Li Jin said. {page_break}

According to the information released by Guangdong Dongguan industrial and commercial bureau website, in August this year, Dongguan cancelled 103 shoe enterprises, and 205 new shoe companies registered in that month. Although the departments concerned said such a rise or decrease is a normal situation, it is an indisputable fact that the shoe industry is hard to do.

　 Order transfer or domestic sale

"Moving east shoes to the West and moving south shoes to the north" is a trend in recent years.

Affected by the cost pressure, the export footwear enterprises located in the coastal areas of China are transferring part of the production base to Southeast Asian countries such as Vietnam, Bangladesh and Indonesia, while the other part shifts to the central and western parts of the country.

The chief executive of Xiamen Jian FA Light Industry Co., Ltd., who produces sports shoes, said that three years ago, the company had opened another shoe factory outside the shoe factory in Zhejiang, Jinjiang, Fujian. Now, in order to control the cost and expand the scale in the short term, the company has considered locating factories in Jiangsu, Shandong, Yunnan, Chengdu, Jiangxi and so on. In the future, Jinjiang, Fujian will specialize in design and R & D centers.

In order to survive the debt crisis in Europe and the United States, some export shoe companies began to use "two legs" to walk - to open up domestic sales. At the shoe exhibition in Dongguan, an export oriented shoe manufacturer claims that the company has been preparing for 3 years and has done a lot of market research to enter the domestic market.

However, the incomplete industrial chain and domestic marketing channels of new production areas also make many enterprises cowardly.

Some enterprises reflect that the shoe enterprises are not mature now because they are too dispersed to purchase most of the raw materials, packaging materials, spare parts and so on from the coastal provinces, which is also a great cost.

In addition, the domestic export shoe companies often get orders through foreign middlemen, mostly by OEM as an export mode, and lack of their own marketing channels. It is not easy to take the "domestic sale" road. A company responsible for exporting dance shoes told reporters that they had not thought about domestic sales. The main reason was that the domestic market was too complicated.