Shoe Factory Near Electric Business &Nbsp; &Nbsp; How Long Will It Last?

In the early 2000 of the 20th century, China was once dominated by China.

Force failure

The golden age is gone forever.

As an old wizard in Shanghai's footwear industry, Hu Qilong's story starts in 1996.

At that time, the brand of domestic sneakers was just like zhongzhongtian, and he plans to open a branch factory in Da Hong Village, Ma Lu Town, Jiading. When Hu Qilong, Secretary of the village committee, approached him, he decided to provide land and water and electricity from the village, and the equipment and technology were provided by Hui Li, and he paid a fixed income to Da Hong village every year.

After the clash, the two sides broke the ground in full swing, and the newly completed plant was soon put into production with good results.

In 2000, a news shocked Hu Qilong and more than 300 workers in the factory: the general factory went bankrupt! Soon after, another shoe giant Qingdao double star was also shattered like a myth, and gradually disappeared in the market.

In order to prevent hundreds of employees from losing their jobs, Hu Qilong's big Hong branch decided to reform joint-stock system and become a modern shoe industry, and he himself was appointed chairman of the board.

Like Shang Hong, many shoe factories in Shanghai tried to pform, but they all faced fierce competition.

Hu Qilong recalled that at that time, Shanghai's famous rubber shoes factory from Shanghai to the ten factory was owned by four or five state-run big factories, but then they were all out of the historical stage due to poor management.

Once there were more than 40 large shoe factories in Shanghai, and now there are only 5 factories, and the smaller shoe factories have two or three left behind.

Survival is not easy.

Crisis in pition

Hu Qilong recalled that before 2010, foreign trade orders were the sources of capital that each place attached great importance to.

Compared with the lengthy capital pfer cycle of domestic foundry, foreign trade is mostly a hammer deal, which means "money is handed to the end". Basically, it only takes 2 months to withdraw money.

Manufacturers also do not have to bear responsibility for after-sales service, even if there are some defects that are not up to standard, as long as the time of delivery can be mixed up.

However, the environment of foreign trade which has been going down rapidly has made many foundry factories lose their grain instantly.

A joint survey by Peking University and Alibaba showed that the size of orders for small businesses in the PRD declined considerably compared with 2010, due to the impact of the European debt and the US debt crisis.

In addition, Vietnam, India and other regional enterprises joined at a low price.

According to customs data, last year, China's finished shoes exports reached a 12 month low growth rate, while exports increased by only 2.4%, reaching 10 billion 170 million pairs, representing a 19.1 percentage point decline over the same period last year.

After losing the order source, many shoe factories had to close down and disband.

Other shoe factories that try to build their own brands are mostly disappointed.

Hu Qilong admitted that he had made his own brand in 2005 and 2006, but he didn't make money.

Compared with the OEM OEM, the channel cost and marketing cost of private brand need to increase the pressure on the factory, which only dispel the idea.

"Another reason is that the shoe factories in Shanghai do nothing but Wenzhou businessmen."

Hu Qilong said that the Shanghai shoe factory is the predecessor of the vulcanized shoes, and has relatively high requirements for quality. However, some Wenzhou shoe enterprises are very strict in cost control, and they are willing to cut corners in exchange for the price advantage.

But even so, the days of Wenzhou shoe companies are equally sad.

According to the figures in the Wenzhou local industry association report, from 2003 to 2008, more than 2000 small and medium-sized shoe enterprises collectively disappeared in the 5 years.

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Tighten your belt

Shoe factory costs rise year by year

In the production workshop of Shang Hong, there is a smell of rubber everywhere. A row of women workers hand in shoes to assemble under the light, raw materials processing, high temperature disinfection and other heavy work are carried by men.

There are fewer local employees, mostly from Anhui, Hunan and so on. The annual salary is about 25 thousand yuan.

Because wages are not competitive with the service sector, their monthly turnover rate reaches 10% to 15%.

Hu Qilong and his son spent a few days in the last few days, counting the accounts.

Starting from April 1st this year, Shanghai will raise the minimum wage again from 1280 yuan to 1450 yuan, which will make the labor cost of Hong Yuan more than 1 million 80 thousand yuan this year.

At the same time, the minimum amount of social security fund paid by individuals will be raised. In the next five years, the shoe factory will also pay 10% of the social security fund for every field employee every year, equal to 190 yuan per person.

With the size of the existing 500 employees, it is an additional cost of 950 thousand yuan.

"More than ten years, all walks of life in China are developing, but the rubber shoe industry is still the same old. Automation and mechanization are very low and rely heavily on manual labor."

Hu Qilong told reporters that a pair of shoes from the procurement link to start a total of more than 200 people's hands, the cost of personnel no matter how careful calculation can not be saved.

In addition, raw material prices are rising rapidly, and many shoe factories are losing their breath.

"At the beginning of 2009, the price of rubber was still 13 thousand yuan per ton, which rose to 20 thousand yuan at the end of the year. At the peak of last year, it reached 40 thousand yuan, and the price of cotton cloth increased by 50% in 2010."

Hu Qilong has a lingering fear that even with the shortage of labor, even in the cities with more developed footwear industry such as Fujian and Guangdong, many shoe factories went bankrupt last year. Fortunately, his factory has orders from Metersbonwe, XTEP and so on.

Investing in electricity suppliers

OEM orders become straws

With the decline of the footwear industry, the way of existence of Shang Hong is somewhat dramatic.

The order they have won comes from the e-commerce which is regarded as a flood by the traditional footwear industry.

In 2010, because of the good reputation of vulcanized shoes in the industry, fan Kai pin, who had been advertising all over the streets, found Hu Qi long to talk about cooperation, but the latter had never heard of the brand of the Internet, and he was still whispering.

"One open is the order of 50 thousand pairs. I didn't believe it at the time. I thought they were boasting and embarrassed to tell them face to face."

Hu Qilong recalled to reporters that he later ran to the other headquarters of Beijing to see several times, and saw the real storehouse and call center, only to be sure that this is not a "big flicker".

What Hu Qilong did not know at that time was that more than 20 other shoe factories in other cities volunteered to act as OEM for all customers.

And he was relying on the old back force branch of the gold lettered signboard, then willfully got the order.

The first cooperation with e-commerce is, in Hu Qilong's words, "a big fight every few days".

In the view of the old wizard, the young company made many unreasonable demands.

For example, the other party asks for the "super glue" of canvas shoes (that is, the length of the rubber belt which is connected to the sole and shoes) must not exceed 2 millimeters, while the upper shoe is only 5 millimeters, which can be brushed with closed eyes.

In addition, he felt very surprised that he was asked to achieve 3.5 kilograms of "glue" (the shoe can withstand several kilograms of pull).

"The national standard is only 1.8 kilograms. Before another famous brand asked me to achieve 2.5 kilograms, all were decisively rejected."

Hu Qilong told reporters that he felt from the bottom of his heart that he had met a long winded buyer.

Despite the difficulties, Hu Qilong is optimistic to see that his shoes have a better reputation in the industry.

"In the process of cooperation with e-commerce, both sides are learning and progress."

He said that last year, all customers' OEM accounted for 80% of the total annual orders, making 2 million 300 thousand pairs, and the factory achieved 115 million sales.

With the emergence of more e-business websites such as Yue Tao and excellent purchase, many shoe companies that are on the brink of collapse have also caught a new life-saving straw.

"To live is to win."

An old technician with nearly twenty years of experience in shoe industry sighs.

Where is our future? No matter what the outside world praises and declines in geometry, Hu Qi long, all the guests are waiting for the answer quietly.

Reporter's notes

Where is their future?

With orders for millions of shoes from e-commerce every year, can shoe companies that have gone through more than a decade of wind and rain have nothing to worry about?

The answer is "no".

A pair of canvas shoes with a price tag of 129 yuan, and 59 yuan at the cheapest promotion, which is obviously much higher than the bottom line of cost.

"We have a profit margin of less than 5% for a pair of shoes, and we can only win by running volume."

Hu Qilong said frankly.

He kept silent about specific figures.

Another boss, who is a shoe manufacturer for the electricity supplier, said that the cost of a pair of shoes would be around 30 yuan if the labor cost was not included.

This shoe factory can only earn about 2 yuan for a pair of shoes.

Even if there are millions of bills, the annual profit will be around ten million yuan.

Faced with the trend of rising costs, they are still in a bad position.

If we earn the money to expand the production line and increase production capacity, the respondents' answer is also "no".

In their view, any act of reckless action will break the risk of cash flow.

Perhaps in the heart of these traditional old factories, it is also a risk to put all the treasure in the same bankrupt electric business.

It is probably another way for the old factory to do business and price fixing personally.

But in the face of various acclimatized, even if many of the giants of pnational corporations have grown up, how easy is this road?