China'S Footwear Industry Is Surging.

"In the first three quarters of this year, there were about more than 1000 shoe factories and related shoe materials, equipment and trading enterprises in Guangdong area because of various internal and external factors or active failures." in the 2007 global shoe industry discussion, the Asian Footwear Association Secretary General Li Peng said in an interview with the media. In November 11, 2007, Belle International Holdings Ltd invested 1 billion 600 million yuan to acquire 5 companies in Jiangsu's San da. At this point, the largest shoe enterprise in China reached its own history. The subversive era of China's shoe industry has been surging. In order to gain an in-depth understanding of the development status and future trend of China's footwear industry, value China has interviewed Wang Jiwan, chairman of Qingdao Hengda Group, one of China's largest footwear industry groups. Reporter: in 2007, many changes have taken place in China's shoemaking industry. On the one hand, some small businesses have gone bankrupt. On the other hand, some large enterprises are galloping in the capital market. What is the development status of China's footwear industry? Wang Jiwan: To summarize the status quo of China's footwear industry in one word is walking into the shuffle era. Specifically, the footwear industry in China has had a certain foundation after many years of development. It has not only been in line with the world market in terms of production, material and technology level, but also has made a good attempt in brand operation and technological innovation. Therefore, China's footwear enterprises are strong and are seeking for a higher level of development. In this process, some people are unable to bear heavy pressure and fall down, and some people are developing suddenly and suddenly. Of course, the development of China's footwear industry to this stage has its confusion. For example, labor, energy, policy and so on. But on the whole, the development prospect of Chinese shoemaking enterprises is good. What we can know, including the operation of the capital market in the near future, the rapid rise of new brands, and the integration with world-class brands, are all a good trend of China's footwear industry. Reporter: the recent BELLE listing has been evaluated as a change in the history of China's footwear industry. How did China's clothing and footwear companies suddenly get the favor of the capital market? Wang Jiwan: I think so. China has a large population and is currently the largest consumer country in the world. This is the biggest reason why many of the world's clothing and footwear brands are optimistic about China. If they want to enter the Chinese market directly, they need to pay a lot of price, including channels, early operation costs and so on. The gradual rise of China's footwear apparel brands has seen the foundation for its development. This development potential is reflected in the Chinese consumer market, and the explosive force in the future is very strong. Including BELLE's listing, to a large extent reflects the international capital, including the confidence of the international footwear market to China's future consumer market. Reporter: will there be an overall upgrading of the industry after the surging tide of listing? How will the industry structure be overturned? Wang Ji Wan: China's footwear industry already has a certain foundation for development. Influenced by economic laws, the development of the industry is phased. After a basic stage, it will surely enter another stage of seeking greater and faster development. Capital operation has provided a great platform for enterprises. This step is a metamorphosis of China's footwear industry. We have analyzed, after nearly two years of adjustment, the Chinese footwear industry will definitely appear "Chinese style oligopoly brand". Just like the appliance industry in the past, a few enterprises that are developing well will occupy most of the market share of the Chinese market, while others will either be "washed away" or can only survive in the cracks. Reporter: with the continuous and rapid development of China's economy, labor costs have begun to increase. Since 2004, the "shortage of migrant workers" has occurred frequently in the eastern coastal areas of China. In fact, it reflects that the psychological compensation expectation of the labor force has begun to rise. This situation is bound to continue to develop, so China's future development prospects of the footwear industry based on low labor costs will be limited. The capacity of shoemaking industry may continue to shift to lower labor costs in India, Pakistan, Thailand and Vietnam worldwide. In the face of the "shoe making" situation in the world shoe making center, what will China's footwear industry support to follow up development? Wang Ji Wan: in fact, China has become a big shoemaking country in the world, which is due to the shift of the shoemaking center in the world because of the relatively low labor cost in China. Now, with the development of China's economy, the cost of labor has increased year by year, and many enterprises are at risk because they have lost their cost advantages. But from a macro point of view, Hengda thinks this is an opportunity for Chinese shoe enterprises instead. The world market has put forward higher requirements for Chinese shoe enterprises. Under this background, enterprises must take the initiative to think and find a better way to survive and develop, so they will have to invest more money and energy in technology development, brand management and channel development. This is a passive attack by Chinese shoe enterprises. Of course, enterprises that have already done the domestic market and international market will face less pressure, and the enterprises that rely solely on international trade will face greater challenges. In this regard, we believe that for enterprises that do not make domestic brands, the more objective and realistic choice should be to invest more in R & D, and at least to enable enterprises to rise from the initial OEM to ODM, even if there is improvement in the style, enterprises will at least have the right to speak of the price. This is a very fundamental problem. At the same time, we believe that we should gradually convert large quantities and large orders into small batch, diversified and high value-added orders, which is also a way to deal with them. How can small businesses survive for a long time? This should be considered not only from the perspective of labor cost, but also from the perspective of market segmentation. Reporter: the upgrading and transformation of China's traditional manufacturing industry is imminent. The key now is to explore a suitable road for upgrading and find some suitable ways and methods. Among them, the intelligent transformation of traditional industries has great practical significance for the development of Chinese traditional manufacturing industry. What are the weaknesses and advantages of China's footwear industry in terms of enterprise intelligence transformation? What are the successful experiences of Hengda? Wang Jiwan: as for the short board of intellectual transformation, I think it is mainly because many enterprises do not have enough knowledge about technology and knowledge management. Besides, knowledge management experience is not enough. And the favorable conditions, I think, first is the wisdom of the Chinese. As long as we sincerely hope to change, we can make the accumulation of our knowledge produce explosive force. In addition, Chinese people are more pragmatic. After years of development, Chinese traditional industries have accumulated knowledge. For example, through the joint development of shoe-making enterprises in developed countries, we learned their advanced experience and carried out transformation and innovation on this basis, which provided the foundation for our knowledge accumulation and intelligent transformation. At the same time, the country has many policies to support the knowledge economy, including the "development of manufacturing services" advocated by the government now, which is also a good guide. The transformation of enterprise intelligence is a problem that Hengda has been trying to discuss in recent years. We first invest a certain amount of money to ensure the development of knowledge capital, such as technological innovation, information system management and brand operation mode research. At the same time, we pay attention to knowledge management and allow "failure" in enterprises. We have established knowledge management tools, such as Internet and knowledge base, which can precipitate and update knowledge and experience well, and we have a good incentive mechanism. Because in the enterprise management, what the enterprise motivates, the employees will pay attention to what. Therefore, through the establishment and implementation of the incentive mechanism, we can make employees benefit from innovation, which also guides and protects the intellectualized transformation of enterprises. Of course, cooperation with world-class enterprises is also a very practical way. After all, China's reform and opening up has only been thirty years. There is still a gap between our development foundation and international enterprises. This is an objective fact. Reporter: as a Chinese enterprise, to successfully achieve the transition to a global brand, global sales and global production are essential steps. What is the current situation of the productivity distribution of Chinese shoe companies in the process of outward expansion? What do you think of its future? Wang Jiwan: as far as I know, the layout of China's footwear industry in the international arena is still at an initial stage. Everyone is trying to see the trend of the shift of the world's processing center, including the pressure caused by the increase in labor and energy costs. Moreover, the footwear industry in China will compete with the world's brands in the future. Cost advantage is also a very important factor in competition. Therefore, Chinese shoe enterprises are trying to make productivity layout in India, Pakistan and Vietnam. The present situation of productivity distribution of Chinese shoe companies in the process of outward expansion is not completed instantaneously, and needs a gradual transfer process. In the process, China is already relatively easy because it already has a certain amount of productivity and radiated to other areas. Reporter: globalization needs not only products, but also the ability to establish standards and rules of the game. China is currently the world's largest shoe center. What opportunities did this create for the internationalization of China's shoemaking enterprises? What are the predicament faced by Chinese shoe enterprises? Wang Ji Wan: the process of China becoming the world's processing center is actually the process of China's participation in the development of the world footwear industry. In the process of cooperation with world-class brand shoe companies, they will make some requests for products and production. We will also make suggestions to them according to their own research and development and operation. In this process, the two sides have kept in touch with each other through the tacit understanding of cooperation, thus promoting the overall development of the footwear industry in the world. And this development process is the process of formulating and forming the world footwear industry standard. At the same time, as China is the world's largest consumer of shoe products, the relevant standards formulated by China's industry associations and research institutes themselves represent the development level of the world footwear industry and have great influence on the world footwear industry. For us, what we need most is the guidance and control of fashion. Italy, France and other countries are only able to guide the trend and make rules. They are not just relying on simple technology and raw materials research and development, but more on fashion guidance. The world's recognition of the beauty of Chinese traditional culture has not risen to the level of the world trend. We urgently need to combine the beauty of Chinese culture with the trend of the world to create the standard of the world's fashion industry. I think this is a problem that China shoe enterprises need to solve urgently, and it is also a direction for Chinese clothing and footwear enterprises to work hard.