China'S Private Shoe Enterprises Face Difficulties And Help Themselves

"In the next few years, the mainstream brand of China's footwear industry will not exceed 5."

The prediction of Wang Zhentao, vice chairman of China Leather Industry Association and chairman and President of AOKANG group, has been widely recognized by the Chinese shoe and leather industry.

This is not an alarmist talk. Recently, thousands of shoe enterprises in Guangdong have been closed down, the implementation of mergers and acquisitions plan, the intensification of anti-dumping, the implementation of the new labor contract law and the rising cost of labor seem to indicate that China's footwear industry is entering the winter.

"May 23rd is a watershed. It has changed the history of China's footwear industry."

Wang Zhentao said.

This day, BELLE international is listed on the Hong Kong stock exchange. At present, its market value has exceeded 100 billion Hong Kong dollars. It is the largest mainland retail listed company in the HKEx market capitalization.

This news is like a blockbuster, causing a great stir in the shoe industry.

"The wolf is coming!" the listing of BELLE means that the shoe industry has changed from the industrial economy to the capital economy. It has also greatly stimulated the expansion desire of other domestic shoe brands, and even shocked the shoe enterprises in Wenzhou.

The recent 1 billion 600 million dollar acquisition of the assets of the group's assets is even more true. "Although BELLE is the main female shoe, it relies on the heavy investment in the hands to achieve the" side by side "assumption.

As a matter of fact, the threat of BELLE shoes listed on women's shoes for Wenzhou footwear enterprises will not be so obvious for the time being, but the impact of merger and acquisition on Wenzhou shoe enterprises is the most direct.

The brand of Wenzhou is famous for its men's shoes, and now it is also clear that it is the same as men's shoes.

The brand of sun Da group, San Da, best picture and good people, has a good reputation in the market, and its quality is already recognized by consumers.

According to the data from the China industry enterprise information center, the fifth of China's top ten shoes sales in 2006, the "tiger" in the north will be more ferocious after the merger and acquisition of BELLE.

In addition to the risk of takeover, BELLE's plans to add 1000 stores a year also add to the tense atmosphere in the fiercely competitive shoe market.

According to BELLE, after listing, about 24% to 25% of the financing will be used to open new stores, including increasing the market share and expanding the market share in the two or three tier cities, from high-end to mid-range, from occupation to leisure, from fashion to sports.

There is speculation in the industry that BELLE will take out 1/3 raised funds (about 3 billion yuan) to buy enterprises and eliminate competitors and supplementary product categories.

"The general trend of the world is divided into years."

The new era of shoe integration has arrived.

In the future, Wenzhou shoe enterprises will undertake mergers and acquisitions at home, or go out to buy shoes enterprises in Guangzhou or Chengdu, or be bought and bought by others.

"Labor shortage", "electricity shortage" and "oil shortage" have long troubled the Pearl River Delta and the Yangtze River Delta shoe making enterprises.

In the past two years, with the intensification of anti-dumping, the appreciation of the renminbi, the rising cost of labor, the rising price of raw materials, and the adjustment of policies on export rebates and processing trade, many small and medium-sized shoe enterprises have been struggling, and have been phased out in the throes of pformation and upgrading.

Information from the footwear association of Asia shows that in the first three quarters of this year, nearly 1000 shoe factories and related enterprises in Guangdong had been closed down by various factors or voluntarily closed down, or were sealed up by courts or moved elsewhere.

Li Peng, secretary-general of the footwear association of Asia, said that the main failures were small and medium enterprises. In the last two or three months, four hundred or five hundred small and medium-sized factories in Guangdong have been closed.

A large proportion of these enterprises rely on speculation, low price competition or poorly managed enterprises.

The shortage of labor, the sharp rise in production costs, and the improvement of operational thresholds in the country have greatly affected such enterprises.

In addition, the new labor contract law, which is about to be implemented in January 1st next year, will also have an impact on these irregularities.

"These situations in Guangdong shoe industry may not be a bad thing. After a fittest adjustment, they will be more conducive to the healthy development of the industry and provide a better competitive environment for enterprises with high added value."

In the face of the current situation of footwear industry in Guangdong, Li Peng said so.

In the face of EU anti-dumping, the trend of China's shoe export to Africa has been increasing rapidly in recent years.

China's footwear enterprises headed by Quanzhou have also increased their investment in Africa in recent years, while Zhejiang shoe companies are also unwilling to lag behind. Data show that in the first three quarters of 2006, only Zhejiang province exported to Africa reached 210 million pairs of shoes and exports amounted to 320 million US dollars.

"A blessing in disguise is a blessing in disguise".

"It is not a new opportunity to treat trade frictions with a positive attitude.

Enterprises can adjust their product structure, quality and competition strategy, and the whole industry will also greatly improve.

Zhou Shijian, an expert in economic and trade relations, believes that the Chinese shoe enterprises under the predicament should pay more attention to their own competitiveness.