Wenzhou Shoe Industry Faces The Crisis Of Reshuffle Pformation

Wu Xiaodong, Deputy Commissioner of customs and excise, told reporters that the main export products of Wenzhou are labor-intensive products and too few high-tech products. In other words, the competitiveness of our products in the international market is influenced by certain factors. Moreover, in the most recent 3 to 5 years, our main export products have hardly changed.

Zhou Dewen, President of Wenzhou SME Development Association, thinks that we must reflect on our foreign trade mode, and we must take the road of pformation and upgrading so as to win the stable international market.

"We are now determined to reflect on the mode of our foreign trade. The original way of expanding our trade depends on low cost, low price and quantity expansion. I think it is no longer possible. Then we should gradually shift from the expansion of quantity to the promotion of quality. We should produce products that are generally acceptable in the international market. I think the products that need more than mid-range products will enhance our technological content and added value, so that we will be more competitive in the international market. If you rely on a large number of cheap products to sell, then I think that this mode has been difficult to continue, so we have to go to the stage of non reform, so our foreign trade enterprises should be determined to go for it.

The road is able to produce products that are truly suited to the needs of the international market for competition.

According to customs statistics, the amount of clothing exports in Wenzhou has decreased by 1.21% over the same period last year.

Footwear exports decreased by 0.94 compared to the same period last year.

Wenzhou shoe 60% is used for export, and most of its trade partners are from the European Union.

In the context of the European economic downturn, what are the tough times for Wenzhou shoe companies?

In 2011, China exported 8 billion pairs of shoes, which is equivalent to one pair in the world and a surplus. Wenzhou also has the reputation of the Oriental shoe capital.

However, as the international economic situation changes, the shoe industry in Wenzhou is facing the test of sharp, small, and short order. What kind of change is this?

Here is the Wenzhou Industrial Park, known as the Chinese shoe capital, where a large number of famous footwear manufacturers in China are gathered. The shoe leather city of China Shoes City, which is being prepared in the streets, has begun to attract investment, and the slogan of the aircraft carrier for making footwear products can also be seen everywhere.

Footwear production in Wenzhou has always been a pride of Wenzhou and a staple of Wenzhou's exports.

According to export volume, footwear exports account for more than 40% of Wenzhou's total export volume.

Two thousand and eleven

In 2004, the total export volume of Wenzhou was about 18 billion yuan, and footwear accounted for 5 billion yuan.

Europe is the main market for Wenzhou shoes. Wenzhou, the United States, South American countries and African countries also have shoes.

Affected by the European debt crisis and the international economic crisis, the market in Europe and the United States has changed dramatically, and domestic shoe companies are also facing a reshuffle.

Wenzhou shoe leather industry association Xie Rongfang told reporters that orders are insufficient, an order is not enough, and the other one dare not answer.

On the Canton Fair, this year, all of us went out to pick up a short list, hoping to get a short list.

Because the euro will change and the US dollar will change, all of which will be taken into account, because profits are very thin.

International orders have become smaller, more urgent and shorter.

Behind the "short and urgent" order is the objective reality of the low end manufacturing industry in China, where the volume of exports is increasing, but the profit margins are getting lower and lower.

{page_break}

Wenzhou shoe leather industry association Xie Rongfang said that the profit of shoe-making enterprises is only 3% to 5%. In less than a year, nearly 500 foreign shoe enterprises in Wenzhou have disappeared.

"The whole shoe export situation, Wenzhou in shoe-making enterprises, the number is 2671, footwear export is 1226, at present, the export of normal footwear export enterprises only 765.

From this data, it is nearly 500.

Home businesses are pause. "

In fact, because some enterprises feel more and more hardworking, they are unwilling to do it again.

The order status indicates that although China's shoes and clothing industry has an absolute advantage in the world, it is currently on the defensive, especially the market of low-end products is shrinking.

The export footwear market has become increasingly difficult.

Wenzhou's footwear export environment is not good, which directly affects all aspects of leather shoes production.

Ni Quanyan runs a shoe material store. He told reporters that in the shoe market of South Zhejiang, there are more than 400 shoe materials businesses like him.

Ni Quanyan, director of Wenzhou snow Leather Co., Ltd.: this year the overall situation is a little worse than before. However, I do a little better in ASEAN and Western Europe. The others are worse. Other dealers can not do it, which is 30% worse than ours.

Business is generally not good this year. Before the busy scene of loading and delivering goods in a busy market for many days, the whole market became particularly cold.

Although the shoe material he sells mainly supplies shoes to Middle East shoe makers, he still feels the cold market.

Ni Quanyan, director of Wenzhou snow Leather Co., Ltd. told reporters: "the previous orders are tens of thousands of meters, one hundred thousand meters, eighty thousand meters of the list of many, now few, sometimes ten thousand, twenty thousand meters, thirty thousand or forty thousand meters occasionally.

Orders are smaller and things are complicated.

There are several products we made last year, and now a factory has to make several products, so we have to develop new products. "

Not only the original orders are affected, but the new channels seem not optimistic.

As a result of anti-dumping investigations, the export volume of Zhejiang shoe enterprises to Brazil leather shoes was zero in the first half of this year, making the whole shoe industry worse.

Although most of the shoemaking industry in Wenzhou is at the stage of low processing development, but after decades of development, it has formed a complete industrial cluster. If 500 shoe enterprises are closed, will they have an amplification effect in the whole industrial chain?

How to turn around?

In the shoe making industry of Wenzhou, the giant group is recognized as a good company.

In shoe making workshop, a shoe can be produced in three seconds.

Pan Jianzhong, chairman of gigantic group, told reporters that he had been in the industry for more than ten years or the first time he encountered such a slump in the market. He felt that the downward trend is still continuing.

"For the first time this year, when this growth is at a minimum, in the past years, we are probably growing at 15% to 20%. This increase, I estimate that this year's growth should be within a single digit, about 5% to 8%, which is also a relatively low level for us."

The growth rate of the export volume of 5% is undoubtedly very difficult for the giant group with huge export volume.

Pan Jianzhong said frankly that the growth of 5% of exports does not mean profit growth.

"So labor costs and raw material costs, then if we look at the growth figures according to the real export, we should analyze the economic point of view from our economic point of view. That is to say, if growth is around 5%, it is almost zero growth or negative growth. Why? Because your labor cost and raw material cost will be shifted to cost instead of now that it has increased by 3% to 5%. You think this is going to increase. I think this is wrong. It should belong to zero growth or negative growth."

This is the shoe production workshop of giant one group, where tens of thousands of pairs of shoes are produced every day. Every three seconds, one shoe comes down on the production line. A pair of shoes stay on the production line for 45 minutes. After many procedures, they are packed in boxes and pported directly to Germany by container containers.

Pan Jianzhong, general manager, told reporters that 80% of giant's shoes will be exported to Europe and the United States. The European debt crisis has directly affected the growth of giant one group's exports.

"The European debt crisis I just said, that is, how much impact, if we normally say, our annual increase in our history is 10% to twenty per year, the greater one is more than ten years, so that is from last year we have this increase slowed down, probably below the number of bits, so this year may also be in the whole year should be between 5% and 8%, almost, this data should be."

Facing the depression of the whole market, it is not only the giant group that feels pressure, but the export of Wenzhou shoe leather is entering the severe winter.

Pan Jianzhong believes that this shoe shuffle in Wenzhou is something I think is sooner or later, because when the social cost and the operating cost of enterprises are getting higher and higher, then some SMEs will not be able to form.

In the unfavorable environment of Wenzhou's footwear industry, the export of high-end shoes has made many enterprises brighter.

In 1-4 months, the export price of Wenzhou's shoes was more than 40 dollars, 37 thousand and 500 pairs of high-end shoes, and the export volume reached 1 million 835 thousand dollars, up 1.4% and 11.9% respectively over the same period.

The average export price of high-grade leather shoes reached 49 US dollars.

{page_break}

Pan Jianzhong, general manager of giant one group Co., Ltd., told reporters that the high-end shoes made by Wenzhou people are also in the market abroad. Overseas countries now agree with the added value of Wenzhou's brand, so this is also a good phenomenon, but this phenomenon is far from enough to restore the whole downward trend.

Xie Rongfang, President of Wenzhou shoe leather industry association, seems that the shoe making industry in Wenzhou still stays on the traditional shoe making level, and the shoe making technology is the only way out for Wenzhou's footwear exports.

At the Wenzhou customs inspection site, containers full of shoes will be shipped to Russia.

The Wenzhou customs is responsible for the supervision of export commodities and the services to the export enterprises. In the view of Wu Xiaodong, Deputy Commissioner of customs and Excise Department of Wenzhou, the external market unfavorable factors that restrict Wenzhou's export still exist, so as to promote the adjustment of the industrial structure of clothing and shoemaking enterprises, so as to maintain the steady growth of Wenzhou's exports.

"We know that the market is changing rapidly, but the export products of Wenzhou are basically at the same time. They have always been these kinds of things. They have been in the past few years and have not changed much. This is definitely not conducive to the development of the export market in the long run. And from this year's data, although I have just said that there are some unfavorable factors in the external market, I believe that if we do not carry out industrial restructuring, we may encounter more and more difficulties in the future.

When Dongguan's exports exceeded the growth rate of the total export volume for two consecutive months, Wenzhou's exports declined rapidly.

It is also a city with an extroverted economy as its dominant position. When the external environment is in the same recession, it has gone through two completely different development paths.

Studying the reasons, we find that Dongguan's success stems from two points: first, policy support for enterprises to pform in a timely manner; the two is to actively explore new markets; in the light of Wenzhou, in recent years, the phenomenon of Industrial Hollowing is becoming more and more serious. Whether subjective or objective, enterprises are unable or unwilling to make too much effort in industrial management. The pace of pformation is naturally slow and small, and the development of emerging markets is generally not enough. When the crisis comes, their development speed to the emerging market is far behind their shrinking speed in the traditional market.

Wenzhou's economy is standing at a crossroads, whether it is to stick to industry or pform into a financial city? What kind of Wenzhou do we need? This requires not only the Wenzhou government and local entrepreneurs to confront each other, but also for each one of us to ponder deeply.