Shoemaking Is Urgent, &Nbsp; Pformation Needs To Be Tailored.

A precise counter and a compass correction are imminent.

Lock the target, fix the compass, and then match the corresponding power.

Facing challenges

China is the most powerful Legion in the global footwear industry. In 2010, China accounted for 65% of the world's total annual output of 20 billion pairs of shoes, with an annual output of 13 billion pairs of shoes.

However, China

"In the past two weeks, every Beijing people has become a fully loaded vacuum cleaner. Of course, it is not just the fog over Beijing, but the whole world economy including the world.

During the financial crisis in 2008, faced with the constraints of raw material prices, labor costs and RMB appreciation, many export-oriented footwear industries were struggling to achieve pformation.

Today, the global economic environment continues to slump, the European debt crisis and the Wall Street crisis are haunting. The Chinese footwear industry with high dependence on foreign trade is experiencing the challenges of shrinking market, declining orders, strong exchange rate, rising costs and structural adjustment difficulties. The most pressing issue for shoe companies is not "whether to turn" or not, but "how to turn".

"For the Dongguan enterprises, in the current stage of pformation and upgrading, the most important thing is to tailor the right medicine according to the actual situation of the enterprises and find the most suitable pformation mode for their own development."

Zhang Shuhua, the chairman of the international leather trade association and honorary president of the China Leather Association, gave an answer to this question.

Gradient pfer and order pfer

For Dongguan's export-oriented footwear enterprises, pfer is one of the ways to cope with difficulties.

The pfer here has two meanings, one is the gradient pfer, the other is the shift to cheaper labor force, better government support policies in the central and western regions, or Vietnam, India, Ethiopia and other countries.

Another implication is that orders have been shifted from relying on external parts to internal orders, and have been OEM for BELLE, AOKANG and other domestic shoe companies.

In the Dongguan factory of Huajian group, the workers worked orderly in their respective posts. This is not the busiest time for them. Because of the low economic situation in Europe and America, the industry's largest female shoe manufacturer's order, which is known as the shoe Foxconn, has also been affected.

However, for Huajian's large and medium-sized shoe factories, which produce shoes for famous brands both at home and abroad, the current market downturn has not put too much pressure on them.

The more pressure is the small factory, Dongguan Wanli shoe factory, and shoe factory, double mast shoe factory and so on can not support and collapse.

According to the analysis of the industry, there are several reasons for forcing some small and medium-sized business owners to close their shoe factories: the global market economy is in a slump and the market share has shrunk. Customers are dragging their money and raw materials suppliers are compelled to break the capital chain.

Take the price of raw materials as an example, Li Junling, sales director of Fuju Leather Co., Ltd., told reporters that the price of raw materials of cowhide and sheepskin has risen by 30%-50% since 2010, and they have to pfer the cost by raising the price of shoemaking companies.

Hua Jian is one of their customers, which accounts for about 10% of their entire business.

For this big customer, they will give a certain discount, and the price can't be too big.

"Because we are located in the middle and high grade, we can choose more varieties of customers, in October and November this year, sales also increased by 30%, but affected by the price of raw materials, profit is not as good as in the past."

Li Junling said that most customers were complaining about the price increase.

Another headache for entrepreneurs is the rise in labor costs. Jin Baisong, a researcher at the Ministry of Commerce, found that labor costs accounted for about 80% of pure foundry shoemaking enterprises in Dongguan, and the labor cost of high-end shoe making enterprises accounted for 18%.

The cost advantage of China's labor force is also gradually weakening.

Data from China Leather Association show that labor costs in China last year were 1.3-1.5 dollars / hour, while India was 0.65 dollars per hour, and Vietnam was 0.48 dollars / hour.

Faced with the increasingly high operating costs in the Pearl River Delta, one of the ways to break through the shoe industry is to pfer.

As early as 2002, Zhang Huarong, chairman of Huajian group, moved some factories to Ganzhou, where there were cheaper labor and better support policies.

He has recently turned his eyes to Ethiopia, Africa.

Zhang Huarong believes that to make global OEM, it is not enough to have its own production base and brand incubator in China, and we should look for new and lower cost production bases in other countries.

In his view, Ethiopia is a manufacturing strategic base for Huajian global OEM.

"The Ethiopia government attaches great importance to this cooperation and investment. Before we organized the inspection group, we also received the personal reception of the premier of Ethiopia (Ethiopia).

Now the African market is like China 30 years ago. When we got there, there was a sense of investment from Taiwan funded factories and Hong Kong invested factories in mainland China.

Zhang Huajian said that the investment of Hong Kong and Taiwan enterprises to mainland China was small. After twenty or thirty years of development, it has become a giant enterprise.

Now, in mainland China, there is hardly any chance of developing rapidly on this scale. It can only be improved in maintaining scale or business value, but there are still great opportunities in Ethiopia now.

Ethiopia is rich in raw materials and labor resources, and it is also a business opportunity for enterprises.

Of course, there are many problems in the pfer of enterprises.

From the east of China to the central and western part of China, it is faced with the situation of large logistics cost, imperfect raw materials and processing facilities.

For Zhang Huarong, investing in Ethiopia also means taking responsibility for all kinds of social services that need to be worked out with the Ethiopia government's reform and opening up.

"The conditions in Ethiopia are not very good, there is no abundant underground resources, traffic is not perfect, only large areas of land, only 80 million people without industrial awareness."

Zhang Huarong said, these are not problems, the key is the determination of the government's development and investment policies and hardware.

They will also use the experience of China's development as a guide to help promote the development of Ethiopia.

For orders pferred from abroad to domestic, Zhang Shuhua called it "riding horses to find horses".

In her view, the future trend of BELLE, AOKANG and other domestic brands will be to become brand operators like Nike and Adidas. They will focus on R & D and brand operation to outsource the manufacturing process. OEM manufacturers who do not have their own brands and brand capabilities can undertake this part of the order pition.

{page_break}

Tailored pformation

Transformation and upgrading is the main trend of the footwear industry, and is also an inevitable trend.

Zhang Huarong said that moving the factory to Ganzhou is not called pformation, it is called gradient pformation.

Do not make shoes to do electronics, nor is it called pformation.

In his view, pformation requires joint efforts of enterprises, employees and governments.

Enterprises should change from traditional management mode to modernization, informatization and lean management, and change their management concepts. This is the basis of pformation. Employees should change their mindset from passive work and migrant workers to a career with a sense of mission and love themselves. When assessing local officials, the state should also increase the stability of employees, happiness index and work efficiency.

Zhang Shuhua pointed out that enterprises should pform according to their actual conditions, and do not blindly follow what others do. If you feel you have the ability to make brand, you can try to make a brand. If you do not have the ability, you should try to increase the added value of OEM by lean. If you have this condition, you can also do ODM and find your own order.

The pformation path designed by Zhang Huarong to Huajian is from OEM to ODM and then to OBM.

Its strategic objectives are: first, take Ganzhou as the world's shoe production base, and develop the production base of Ethiopia in Africa to become the best OEM producer in the world; second, do well in ODM, and develop the global footwear trade based on the Dongguan world footwear headquarters base.

Third, we should do well in OBM and build our own brand.

Based on the Ganzhou production base and the Dongguan world footwear industry headquarters base, the independent brand incubator center will be established to expand the domestic demand market and actively promote the listing of the company in 3-5 years.

Along this path, Huajian has been walking for more than ten years, but this road is not smooth.

"We have been doing our own brand for three or four years. We have invested a lot of money and lost a lot of money.

In the past, I always felt that selling shoes was very simple, but actually I didn't know it was true.

Zhang Huarong said, making domestic brands is not a matter of money, nor is it a problem of shoes. The most important thing is to understand the brand, the market and understand the customers. In addition, we need to build a professional team.

Dongguan Qisheng Shoes Co., Ltd., which has changed from foundry to independent brand, has tasted sweetness in brand operation for many years.

In 1998, when he attended the Las Vegas shoe exhibition in the US, his chairman Yin Jiqi made a decision to abandon the OEM and establish his own brand.

In his view, the foreign market is very mature, basically monopolized by several giants, and Chinese enterprises are not easy to enter.

Moreover, the Chinese market accounts for 20% of the world's total. From 1949 to 1990s, China's high-end leather shoes manufacturing and sales is a fault. Many of them rely on Italy's products. But foreigners' feet are different from those of Chinese people. There is a great chance to launch shoes suitable for Chinese consumers in the domestic market.

In addition, because of local enterprises, the understanding of all localities and regions is certainly much stronger than that of foreign counterparts, so we can not give up these advantages.

So Yin Jiqi set the domestic market on the basis of high-grade leather shoes.

The domestic market is undoubtedly tempting, but for external oriented enterprises, self built brands need to cross several hurdles.

The first is the change of concept.

Business owners must first change their own ideas and abandon short-term business ideas of quick success and instant benefit.

"To be a brand must be able to endure loneliness. The brand can not be achieved in two or three years, at least five to eight years or even ten years, so that it can form its own characteristics so that it can be accepted by the target market, and it can not afford to be lonely."

Zhang Shuhua said.

But entrepreneurs who are used to doing foreign trade market often turn around.

"You can't take the idea of layman into another line. The processing factory must use the mode of processing factory, and the brand should be used as the brand mode.

As long as the factory wants to make the product well and meet the customer's requirements, it is totally different from what the brand needs to consider.

Yin Jiqi said, making brand needs to understand the needs of consumers, give consideration to how to meet the needs of the channels, and adjust at any time according to the market changes.

The two is positioning.

Zhang Shuhua pointed out that making a brand should not be too ambitious. If we want to make a good job of positioning, everyone wants to be a high-end market, but it is not suitable for every enterprise, and some may be more suitable for the rural market.

Brand positioning should be able to identify its own market and find a market that matches the quality of its products.

It is not suitable for first tier cities, which can be done in the two or three line market, or even in the rural market.

"The rural market is an undeveloped place to deal with. Although it faces many difficulties, such as the undeveloped sales channels, it is difficult to cover; the demand for farmers is not yet very well understood; the profit margins of farmers are thin, and the demand is needed to support them. But the countryside is indeed a virgin land, which is a market ignored by many people."

Zhang Shuhua said that many people would think that doing the rural market is a low-grade product, in fact, should not be so.

The rural market needs to be fully investigated and designed specifically for them to design new products and sell high-heeled shoes in the countryside.

The appliance industry has such an example, for example, Haier's washing machine for the rural market is not used to wash clothes, but to wash sweet potatoes.

Yin Jiqi also pointed out that making a brand first needs to understand its advantages and have a clear positioning.

In positioning, there must be dislocation. Every market has many competitors. How can we draw a gap with our competitors and find our own dislocation?

It is also a good choice to focus on market segmentation and customization.

"Shoes are not fit, only feet know."

Truly fit products are personalized products, which can not be solved by traditional industrial production.

But satisfying individuality is indeed a potentially huge market.

Professor Wang Jici, a professor and doctoral tutor at Peking University, Zeng went to a foot science and technology center in Taiwan to customize shoes. The center measured the precise and accurate parameters through the latest high-tech foot measurement instruments. The professional technicians analyzed the foot structure and the results of biochemical changes of the customers, then made the equipment with 3D computer CAD/CAM, designed and developed the products from different angles of physical and physiological anatomy.

In mainland China, there has hardly been such a company that attaches importance to foot technology research.

Wang Jici believes that if the shoe industry can thoroughly study the problem of feet, carry out scientific and technological innovation, and make use of high-tech products and research structure in the development of shoes, there will undoubtedly be broader prospects for development.

The three is product R & D design capability.

That is to say, the product must have its own characteristics. If you put it on the market and label the AOKANG, you can also label the BELLE label, which shows that the product has no characteristics.

Zhang Shuhua said, if the enterprise does not have these three abilities, do not make the brand.

But OEM enterprises can also play their own brand and become a foundry brand, such as Foxconn and Huajian.

{page_break}

Benefit from management

Whether it is to be an independent brand or a foundry brand, it is also under the pressure of rising labor costs and rising raw material prices.

Zhang Shuhua pointed out that the most fundamental solution to this problem is the renewal of ideas.

Everyone's ideas will go to low cost, early or dark, price war and other misunderstandings.

However, the footwear industry has put forward the slogan "to be quality, environmental protection, efficiency and efficiency" for machinery, chemical industry, management, and talents, which shows that many people have realized that the past era of hard work, careful calculation, low cost, and price war has passed. They need to change their ideas and win market with management wisdom and technology.

"When it comes to upgrading and pformation, we focus on pformation. In fact, manufacturing does not mean low technology, which is never the case.

Most of the world's automobile shape design is done by Italy enterprises, but what are the top enterprises in the automotive industry all over the world? What countries are the United States, Japan and Germany?

So making design is not necessarily like making advanced.

Manufacturing can become a high-tech industry. "

Tsinghua University professor and doctoral tutor Zheng Li said.

In his view, making good manufacturing is essentially two, the first is efficiency, and the second is quality.

To achieve these two points, we need two innovative support, technological innovation and management innovation.

Zhang Huarong also admits that by optimizing internal production management, there will be 30% to 40% space for the manufacturing of Huajian.

However, it is not easy to make small and medium-sized shoe enterprises manage innovation. Many bosses have hired management consulting companies to carry out company pformation, but most of them have failed halfway or have little effect.

"To make small and medium-sized enterprises thoroughly carry out management innovation is not achieved overnight, because they do not believe it, and secondly, they do not understand. Management is not to be used in a single way, and linking theory with practice requires a running in process.

Moreover, the shoe industry is very traditional, most of which retain the handmade management style. It can be said that the scholar is confronted with the army and can not be justified. "

Zhang Shuhua said that in order to achieve the upgrading of management, we should not rely on the introduction of professional managers. Instead, we should look for those who trust the owners, such as their children and relatives can not revolutionize thoroughly, but we can gradually reform.

In addition, the government and the association should also be guided.

The most direct way of technological innovation is the introduction of digital equipment.

Emma CNC, founded by Wang Guoquan, is the upper reaches of the industrial chain. It should be said that at present, he is one of the biggest beneficiaries of the upgrading of the footwear industry.

But ten years ago, they were struggling to promote this digital device.

"Ten years ago, Dongguan asked a worker only 500-600 yuan / month. Many bosses thought that workers were so cheap that they did not have to invest hundreds of thousands of people to buy such equipment.

But it is precisely this "short-sighted" profit seeking behavior that many Chinese shoemaking enterprises are only limited to extensive development, and at low prices as the weight of competition in the market, without the ability to fight environmental degradation.

In Wang Guoquan's view, industrial upgrading will develop in three ways: making more technological and value-added products, such as making higher grade products with higher profits, and increasing productivity more effectively, such as using automated machines and equipment, making more output with the same people, increasing investment and gaining more value in the industrial value chain.

But these three aspects are inseparable from the application of new technologies.

Without the application of new technology, the industrial upgrading of enterprises has become extremely difficult. In this regard, foreign shoe industry counterparts are far ahead of us, because foreign labor remuneration is much higher than ours.

In fact, since 2008, with the increasing labor costs, shoe companies have to think about how to improve efficiency.

Wang Guoquan said that the manufacturing and manufacturing fields of China's footwear industry are basically semi mechanized.

The efficiency of replacing workers with machines should be more than two times, and the efficiency of replacing human hands with digital devices should be five to ten times.

Buying a machine of 600 thousand yuan can save 700 thousand yuan of visible cost for the enterprise in one year.

The value of such investment is great, but it is still a process to make sure that the owners are determined to buy it.