How Far Can The Price Of Shoe Enterprises Go?

Domestic and foreign demand is sluggish at the same time, coupled with the "three high dilemmas" (high production costs, high labor costs, high tax burden and difficulties in financing and implementation of supporting policies), the profit of small and micro enterprises is as thin as razor blades.

"Fierce competition in the market, to survive, enterprises must first learn to" pain "in the road, pformation.

Faced with the plight of survival, in late May and early June, reporters in Guangdong, Zhejiang, Shandong, Liaoning, Hunan, Sichuan and other coastal cities and 6 provinces and 16 cities in the central and western regions found that many small and micro business owners invariably took the pformation and research and development of new products as the preferred coping strategies, and the results of the questionnaire survey conducted by 113 small and micro entrepreneurs interviewed this time confirmed the universality of the phenomenon.

Operational difficulties

Future market expectations are not optimistic.

Guangdong is the largest economic province in China, and it is also one of the most representative provinces in the development of small and micro enterprises.

China's Economic Times reporter went deep into Guangdong, Zengcheng, Dongguan, Zhongshan and Jiangmen, and the local small and micro enterprises almost did not say "the most difficult" word.

Zengcheng Xintang town is one of the largest production bases of Chinese denim clothing. 60% of the cowboy costumes are from Xintang, and 30% of the country's cowboy garments are from Xintang.

"This year's business is generally difficult to do, and it is even more difficult than the financial crisis."

On the morning of May 28th, Zhang Wenjie, general manager of Guangzhou Hao Yu garment and Textile Co., Ltd., in an interview with our newspaper reporters, said there were two denim clothing companies under the name of the company, a foreign trade type mainly engaged in foreign orders, and a partner factory mainly engaged in processing, supplying goods to both domestic and foreign suppliers.

At present, in addition to maintaining stable orders with Russia, foreign trade companies have almost no orders in the Middle East and Europe because of the poor market.

Zhang Wenjie told reporters that in the past, he mainly focused on foreign trade companies, and now foreign orders are few, and foreign trade companies have few employees, so they often come to factories to see.

If external demand is weak, many coastal export-oriented enterprises are facing difficulties after the financial crisis. Then, the slowdown of domestic economic growth and the reduction of orders will become another big survival test for these small and micro enterprises.

"This year, business is still more difficult than before."

In Zhang Wenjie's office, Yan Zhihui, general manager of Peng Xin Clothing Co., Ltd., Guangdong, met with reporters, and lamented the difficulties of small and micro enterprises. The cost is high, the tax burden is high, financing is difficult and recruitment is difficult. "The worst thing is that this year's domestic market is sluggish, and orders are getting smaller and fewer. After this season, we do not know where the next season is."

In the downstream industry chain washing industry of jeans production, the situation is also not optimistic.

And Shun Shui washing plant director Liu Jianyong told reporters that due to the bad environment and intensified market competition, the declining trend of domestic orders was obvious.

"Last year we had more than 20 washing plants closed down, although not so much this year, but we are not very optimistic about the situation in the second half of the year."

In Xintang, the reporter visited the related industry chain of cowboy production, and found that in the past "three high and two difficulties", this year's decline in domestic order volume has become the biggest difficulty for the whole Xintang jeans industry.

It's not just Guangdong.

From late May 2012 to early June, China's economic times six reporters went to Guangdong, Zhejiang, Shandong, Liaoning, Hunan, Sichuan and other coastal areas and the central and western regions to conduct on-the-spot investigation and interviews. In an in-depth interview with 16 cities such as Dongguan, Zhongshan, Wenzhou, Taizhou, Taizhou, Taizhou, Wenzhou, ",", ",", ",", "and", interviewed 113 small and micro entrepreneurs in more than ten industries, and filled out questionnaires.

According to the questionnaire analysis, the sales situation of small and micro enterprises from 1 to May this year showed that the overall decline was slightly on the basis of basic fairness, and that the number of sales decreased was more than that of the growth.

From the number of enterprise orders, about 1/3 of the enterprises held orders were basically the same as last year, and nearly 30% orders were reduced.

"The decline in orders will mean a decline in corporate profits."

In the past few years, the net profit of enterprises in Wenzhou has reached 20%. Now some industries can not get gross profits to 10%, net profit is lower, and 5% of them are good companies.

"There is no profit for enterprises. How to pform them?"

Fang Chonghai is puzzled about the survival prospects of enterprises.

Liu Wei is the Deputy Secretary General of the Dongguan branch of Hubei chamber of Commerce in Guangdong province. Because of her work needs, she should constantly communicate with the local chamber of Commerce, and also have a shoe material trading company and a factory under her name, so she is very familiar with the current situation of Dongguan, especially Shatin town's small and micro enterprises.

Liu Wei told reporters that many enterprises recently reflected the decline in orders and difficulties in operation.

"Labor-intensive small businesses mostly make money by processing volume, the larger the volume, the lower the cost, the higher profits; but now, everyone is facing the situation of order saturation, and they dare not casually reduce their staff, but also pay for all kinds of costs, and the profits of enterprises are dropping again and again."

Liu Wei took his trading company as an example. Last year's turnover was about ten million yuan, which is expected to be only about two million yuan this year.

Liu Zhilong, chairman of Changsha tutian Energy Saving Technology Co., Ltd., told reporters that now the whole market is overcapacity. In order to survive, everyone can only lower the quoted price and strive for the market, and the profit has been getting lower and lower.

"Now some enterprises have only 10% gross margin, but they still have to do it.

Otherwise, what should the daily expenses of enterprises do? Therefore, enterprises do not earn money to survive. "

During the interview, many small and micro business owners told reporters that the reduction of orders and the drop in profits are the common problems faced by many of us.

According to the reporter's interview, Sichuan small and micro enterprises started from 1 to May only 60%, and nearly half of the small and micro enterprises net profit fell.

According to the analysis report of the China economic times, the current corporate profit margin has been maintained at a relatively low level. About half of the enterprises are in the 5% to 9% range, and the profit margins of more than 10% are less than 20%.

The proportion of non profits, losses and low profit margins has increased by more than 30%.

"The reduction of orders is actually the biggest source of the market downturn, and the lack of effective domestic demand."

This is what our reporter heard most when interviewed in Guangdong, Zhejiang, Shandong, Sichuan, Hunan and Liaoning.

Wang Puzhi, director of the Bureau of statistics of Huangyan District, Taizhou, Zhejiang, told an interview with our reporter that at present, the international market is not good enough, and the domestic effective demand is not enough. The statistics department is almost at a negative growth in the classification of local residents' consumption surveys, furniture, electrical appliances and other industries.

Wang Puzhi said, in the past, some professional markets opened at half past eight a.m. this year, they were lazy and scattered until half past nine.

Chen Tongrong is the manager of Dongguan shoe Office of Sheng Hao, as a downstream company.

Shang, its company mainly deals in various sole products.

On May 29th at two o'clock in the afternoon, when the reporter came to his store in Heng Mei Street, Nancheng District, Dongguan, he found that the shop was cold and cold, and there was no visitor.

"It used to be a time when many customers came to see the samples, but the market is too weak this year."

Chen Tongrong pointed to the empty shoe store and told reporters that in the first half of this year, their business decreased by at least 1/3 compared with last year.

The reason is that Chen Tongrong believes that the main demand is insufficient market.

"The shoe materials in my store mainly supply some shoe factories in Nancheng district. As far as I know, many shoe factories are now preparing for a holiday because there is no order."

Chen Tongrong, Wenzhou has 100 shoe factories in Nancheng District, and many say that they are going to have a holiday recently.

{page_break}

"It's like a biological chain with a link."

Xia Junhua, general manager of Dongguan Shen Ming Machinery Co., Ltd. gave a very vivid example.

He said, take shoes as an example, in a good economic period, an ordinary consumer should buy at least four pairs of shoes a year (four pairs each year), but in the current economic downturn, consumers will reduce their expenditure and may buy only two pairs of shoes a year, which means that the sales volume of the entire shoe industry should be reduced by nearly half, the market demand will be reduced, the production volume of shoe enterprises will be reduced by half, and the orders of downstream suppliers will also be reduced by half.

Therefore, as a large number of small and micro enterprises supporting large enterprises, it is inevitable to survive.

Wen Bin, director of the finance coordination and Financing Guarantee Department of Chengdu economic and Information Committee, admitted to our reporter that the difficulties encountered in the development of small and micro enterprises should be overcome in a short period of time. First, the small and micro enterprises themselves have no strength to create independent market brands. Most of them are dependent on the development of large enterprises. Once a big business is in trouble, small and micro businesses will be unhappy. In addition, small and micro enterprises will be vicious competition if their market conditions are not good enough.

The head of a hardware processing plant in Shatin Town, Dongguan, told our reporter that the order of tens of thousands of yuan a day could be collected a day last year. The number of days this year is up to a few thousand, sometimes there is no order a day, and orders are 40% less than that of last year.

"Now we have finished all the orders in August, but we haven't received the list yet. Let's not talk about profit. How to maintain it is still a problem."

Yu Nengwu, general manager of Jiangmen Boxin Lighting Co., Ltd., told reporters that this year's company orders have been reduced compared with the previous year, and the operation is relatively difficult.

But this is not the most headaches for Yu Nengwu.

"Lighting industry threshold is low, Zhongshan and Jiangmen's market competition itself is very fierce, and this year's market situation is not good, we spell price phenomenon even more severe."

Yu Nengwu said, now some enterprises in order to grab a single, will be the price is very low, so the customer inquiry will certainly find low price factory order.

"But in fact, some of the materials for making lamps are iron and some are made of plastic.

In addition, the lighting materials such as wires and electric heads are not the same, and the cost is quite different.

The price is low. If you want to make money, you can only think of it in materials and workmanship.

A person in charge of a lighting processing factory in Zhongshan said to our reporter that some bad materials looked almost the same after plating and processing, plus customers sometimes could not distinguish them.

In the interview, the reporter found that at present, the market competition between the peer enterprises is very cruel.

In order to receive orders, mutual quotations can be made without local quotations.

Ultimately, the products produced are basically not profitable or even losing money in addition to the purchase of raw materials, labor wages, fuel power, manufacturing costs and financial expenses.

Cai Chang, general manager of Guangzhou Huan fire textile and garment industry Co., Ltd., told reporters that now the global economy is sluggish, many foreign businessmen come to China to share the domestic market. "Most of our family businesses are cooperating with the domestic first-line brands. Now that foreign merchants come in, orders are divided and business is not very good."

Coupled with the previous domestic processing industry, small and micro enterprises are concentrated in the Pearl River Delta coastal areas, now many inland cities have become processing bases, competition is much more intense than before 2007, price is a common, but very unfavorable to the long-term development of the industry.

A lot of business owners have described the market to reporters like this: the market is like a big cake. Only one hundred people have divided it. Now two hundred people are divided. The competition will be more intense.

Moreover, the cake itself is still getting smaller.

Enterprises develop new products, government helps find market.

The market is shrinking, orders are decreasing, and survival is difficult.

And how to choose?

"The reduction is positive because the order is small."

Yan Zhihui told this reporter that his factory is now doing the order in July and August, the volume is not big, slowly do, but the more this time, the more we need to do a good job of quality, customer satisfaction may have a return order.

According to the reporter's understanding, reducing production is a common measure for most small and micro enterprises to wait and see the market now.

Of course, stopping production is an option.

Liu Zhilong, chairman of Changsha tutian Energy Saving Technology Co., Ltd. said that his company mainly provided a matching control system for new energy development. However, from the end of last year to the beginning of this year, many manufacturers of large mechanical equipment such as photovoltaic and power generation basically stopped working.

As a result, the company's business has not developed well.

"The red sun (13.63, -0.02, -0.15%), a joint venture with my friends, has basically stopped production."

Liu Zhilong said that the company had made a plan at the end of last year, and sales could basically reach 5 million to 10 million this year.

"But so far, the whole market has been shrinking so much that we have to stop production."

Reporters in the six provinces (cities) research interview found that in the production and production cuts, the development of new products is the vast majority of small and micro enterprises will choose the response measures.

According to the survey report of China economic times, in the face of the current economic situation, the development of new products has become the preferred strategy for small and micro enterprises to face the current economic situation. More than half of the enterprises (51.9%) are developing new products to cope with the economic difficulties.

This shows that the idea of innovation has penetrated into the development process of enterprises. When enterprises encounter difficulties in development, they first think of developing new products, which is of great help to the overall economic development.

However, reporters also found a very interesting phenomenon, recruitment difficulties, high cost of labor is the reporter in the six provinces (cities) interview, the biggest complaints of business owners, but in the current business difficulties, most enterprises prefer to do less or less profits, but are reluctant to choose layoffs.

The questionnaire analysis report also shows that only 14.7% of small and micro enterprises choose to lay off workers in all enterprises surveyed.

"It's too hard to recruit people. Now we have to cut it off. There's a single and no one to do it. Then the business will die."

Zhang Wenjie told reporters that after the financial crisis, many enterprises have already cut down their employees, and now the market is unknown. The enterprises prefer to do less and keep them alone. Otherwise, the market will get better or there is a time when no one will be in trouble.

In addition to the various means of dealing with the enterprises themselves, the local government departments in order to effectively help small and micro enterprises to overcome the difficulties encountered in the current production and operation and increase support for small and micro enterprises, many policies and measures are also put forward to help small and micro enterprises find the market.

In April this year, the Zhongshan municipal government of Guangdong Province proposed to actively help small and medium enterprises to develop domestic and foreign markets.

It is requested that the Zhongshan Municipal Bureau of letters, the foreign trade and Economic Cooperation Bureau and the finance bureau support small and medium enterprises to use e-commerce platforms to open up domestic and foreign markets, establish small and micro enterprises' industrial alliances, encourage chambers of Commerce and trade associations to establish price coordination mechanisms, hold together bidding, and actively open up domestic and foreign markets.

At the same time, the Zhongshan Municipal Finance co ordinates 10 million yuan to support small and medium enterprises to participate in the exhibition of China's small and medium enterprises and the development of various commodities markets.

Zhongshan is required to have departments in charge of the department budget. Under the premise of meeting the basic needs of the organization itself and providing public services, the Department should reserve more than 30% of the total annual government procurement budget, specifically for small and medium enterprises.

Among them, the proportion of reserved small micro enterprises is no less than 60%.

In the first quarter of the year, the Qingdao municipal government concentrated on the 7 documents on further supporting the development of small and micro enterprises, etc., focusing on optimizing the environment for the development of small and micro enterprises. The mayor of Linyi worked on the spot, selecting 200 small businesses with financing needs, and coordinating 14 banks to grant comprehensive credit 1 billion yuan, and all the benchmark interest rates were implemented.

Liaoning offered to support enterprises in developing domestic and foreign markets.

We should implement the supporting policies of export enterprises, fully implement the export tax rebate policy, reduce the export cost of small and micro enterprises, improve and strengthen services for small and micro export enterprises, and improve the proportion of goods, projects and services in small and micro enterprises purchased by the government.

Yu Jitao, chairman of Shandong Zhong Sen Building Materials Technology Co., Ltd., in an interview with reporters, said such a paragraph: small and micro enterprises are the lowest in the biological chain, belonging to the ranks of shrimp, small fish and even algae, but small and micro enterprises are very important, because without them, there can be no whale.

Zhuang Congsheng, member and vice chairman of the all China Federation of industry and commerce, said that at present, there are more than 30 million small and micro enterprises, accounting for more than 95% of the total number of enterprises in the country, and the final products and value created by them account for about 50% of GDP.

The vitality of a region's economic development depends largely on the "face" of small and micro enterprises.