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OEM Shoe Manufacturers Leveraging E-Commerce To Pull Up "Smile Curve"

2012/3/26 12:49:00 17

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Clothing Shoes Industry Shoe Enterprises

The cold export situation makes foreign trade accustomed to OEM.

Shoe enterprises

We have to turn our attention to domestic sales. This time, "online shopping" is playing an increasingly important role in their field of vision.

Online shopping helps foreign trade enterprises to pform domestic sales seems to be "commonplace", but the lack of Internet marketing experience, it was difficult to rely on a Taobao store before to meet the needs of survival.

With the rise of B2C (enterprise to personal e-business) platform and the continuous deepening of traditional enterprises' understanding of e-commerce, the role of OEM enterprises in the online shopping industry chain has changed quietly. They not only become the main force supporting the Internet brand, but even begin to consider the two ends of the "smile curve" with the help of this new consumption mode, and truly realize pformation and upgrading.

Big orders for Internet brands

Shanghai, Jiading District, Hongcun, Ma Lu Town, Shang Hong

footwear industry

In the workshop filled with rubber smell, 500 workers on 2 pipelines were busy sealing, rubbed and forming.

4000 pairs of canvas shoes are produced here every day, and most of them are packed in brown cartons, which are written in "VANCL", and are sold all over the Internet.

This is a typical foundry enterprise with a history of 16 years. It has produced back shoes, and has been relying on foreign trade orders to make bigger products than other shoe manufacturers of more than 40 other vulcanized shoes and canvas shoes in Shanghai.

But after 2008, the international financial crisis, the rising cost of raw materials and labor and other factors forced them into a dilemma.

"At present, there are only 5 enterprises in Shanghai which are similar to ours."

Hu Qilong, chairman of Shang Hong shoe industry, has no regrets.

"We must turn to domestic sales!" Hu Qilong once tried to launch his own brand, but he never found contact with domestic sales channels. He soon found that he could not solve the problem of dealer's pressure payment, nor could he get the advertising cost of promoting products.

"It is the most difficult time for an enterprise to operate."

In March 2010, an order from the Internet brand appeared.

Online shopping brand Hu Qilong found 50 thousand pairs.

"I don't believe that making a large list of foreign trade is only 20 thousand pairs, not to mention domestic brands."

Hu Qilong never thought that these shoes would be taken away from the website of the van guest website in less than 48 hours.

Since then, orders have followed, 100 thousand pairs, 200 thousand pairs, 300 thousand pairs. In 2011, the shoe industry made 2 million 300 thousand pairs of canvas shoes for the customers, accounting for 80% of the factory output.

Online shopping

brand

Single orders are big enough to lower costs, and the rate of return is faster than traditional brands. The account period is only 60 days, just like we do foreign trade.

The foundry industry is going to depend on cash flow, so these two points are very important.

Hu Qilong told reporters.

However, the money is not easy to earn. The Internet brand relies on word of mouth marketing, and its quality requirements are close to harsh.

"For the pull of the girth, the national standard is 1.8 kilograms, and the guest requests 3.5 kilograms."

Relying on the big orders from the Internet brand to successfully pform the domestic market, the foundry enterprises are no longer on the macro shoe industry.

Van gentry, dream bazaar, seven grid, wheat bag...

These fast-growing internet brands usually use the design to find the appropriate foundry factories, and they are only responsible for the design.

Li Yonghua, general manager of Shanghai ODO home decoration Co., Ltd., who is known as the "Internet first lighting brand", said, "which countries have been exported, and which brands have been subcontracted, is an important criterion when looking for foundry factories.

"For the OEM enterprises, the profit margins for us should be higher, and the" delivery by hand "is more in line with the traditional production habits of foreign trade.

Low cost pull up "smile curve"

If online shopping has brought considerable incremental business to some OEM enterprises, the problem of survival has been solved.

For other large scale foundry enterprises, ambition is not only there.

They are trying to build their own brand by shopping online, and pull the two ends of the "smile curve" at an unprecedented low level.

These online brands have attracted considerable attention.

The clothing electricity supplier brand olino has achieved a sales volume of over 100 billion yuan in the past 3 years, while Wu Shihui, chairman of the same brand from the OEM production to the self built brand, revealed that compared with the gross profit margin of the foreign trade from 10% to 20%, now the company has gained more than 30% gross profit margin.

Such a concentrated outbreak, in addition to the rapid expansion of the scale of online shopping, also shows that traditional OEM enterprises have gradually touched the "doorway" of this industrial chain.