Faced With Difficulties, China'S Shoe Industry Breaks Through With Its Brand.

According to the Hongkong Economic Herald, the EU ruled in October 5, 2006 that it would impose anti-dumping duties of up to 16.5% on Chinese leather shoes for a period of two years.

This has caused great resistance to China's leather shoes entering the EU market. With the pressure of RMB appreciation, China's shoe industry has almost fallen into an unprecedented predicament.

Appreciation of the renminbi, 10 Fen companies lose tens of millions of RMB appreciation. For the Taiwan Fengtai enterprise (9910.TW, hereinafter referred to as "Fengtai"), which has nearly 60 production lines in mainland China, the export oriented shoe-making enterprises, the current impact is not big. Feng Tai spokesman Chen Liqin said: "appreciation of 2% enterprises can also be adjusted."

But at the same time, she stressed: "if the RMB continues to appreciate, Fengtai will move the production line to a more competitive place in the future, and some long-term orders on the mainland will be replaced by Vietnam and Indonesia, which will be an option."

Fengtai is the second largest OEM manufacturer in the world (Nike). The shoe making capacity is closely related to Taiwan Baocheng group (9904.TW, hereinafter referred to as "Baocheng"), and Nike shoes are basically exported to Nike.

According to industry sources, the profits of foundry enterprises such as Fung Tai are not high, and Nike shoe manufacturers give them about 8% of the price of their shoes (excluding materials and labor costs).

RMB appreciation of 2% will undoubtedly reduce the profits of these enterprises.

Chen Liqin also admitted that the company's profits were squeezed.

Guo Shanhui, President of the Dongguan Association of Taiwanese businessmen, agrees: "this means that the cost of business has increased."

For some mainland enterprises, the pressure on them is even greater. "The renminbi rises by 10 Fen, and the company loses tens of millions of dollars."

At the 100 Canton Fair held in October 2006, reporters heard many complaints from exporters.

In July 22, 2005, the exchange rate of US dollar to RMB was 8.26 yuan, but by the 100 Canton Fair, it had changed to more than 7.9 yuan.

The pressure on the Guangzhou Trade Fair has increased dramatically.

And some companies that use modern financial instruments to avoid exchange rate risks can greatly reduce operational risks.

At the Canton Fair, some shoe companies said that under the appreciation of Renminbi and soaring prices of raw materials, enterprises could not survive without raising prices.

Jiang Lianduo, manager of Double Star Import and Export Co., Ltd., said: "the average export price of some canvas prints shoes has reached US $3.5-3.6, and the export price of these shoes will not exceed US $3 this spring."

The question is who will pay the bill after raising the price?

On the one hand, China's exporters want to raise their prices to make up for their losses. But on the other hand, they are accustomed to buying overseas buyers with high quality and low price, and they are unwilling to give up their vested interests.

European purchasers, Mr. de John Kaf, told the journal that similar products in China often have many production enterprises. After all, the participants in the Canton Fair are relatively large and relatively sound brands. Many enterprises outside the field may have more desire to take orders and are willing to maintain their export prices.

"Therefore, it is best not to rush the deal at the Canton Fair. Maybe we can find new partners to get a more satisfactory price."

Reporters at the Canton Fair found that in addition to raising prices, some enterprises also digest the pressure of RMB appreciation through other means.

Among them, increasing the added value of products, signing short-term contracts and using various financial instruments have become the most effective response to the "magic weapon" at present.

Zhang Xingbo, director of the Ministry of Commerce of Tai Ma group, a big producer of leather shoes in Wenzhou, said that Tama has always insisted on the positioning of high and high grades, has its own brand in more than 100 countries, and 70% of its annual exports are private brands, and the export price of each pair of shoes is more than 20 dollars.

Because the added value of products is high, "the pressure of RMB appreciation on enterprises is not big".

In the process of exporting Chinese footwear products to overseas markets, there have been incidents like "Spain burning shoes" and "Russian seizure".

An export company located in Wenzhou analyzed this issue. Basically, the problem is low price leather shoes.

Most of these shoemaker manufacturers use local raw materials to produce, and then export finished shoes to foreign countries. Once the appreciation of RMB is too large, these shoemaking enterprises will face more pressure.

After experiencing the Spanish shoe burning incident and the Russian shoe deduction incident, AOKANG shoes, which are famous for their brand awareness, have attracted much media attention.

In an interview with this magazine, AOKANG Ji Zhen Tao has clearly put forward: "to deal with challenges with brands, to pcend cultural, geographical, ethnic and national boundaries, become a global fashion."

It is understood that Spain and Russia are the main export countries of AOKANG, but in the two incident, AOKANG did not suffer any damage.

Industry analysis, this is the strength of the brand.