Wang Ji Wan: Chinese Shoes Rise From Failure

Sarah Banzerni, the American, has been very hot in the months from the end of 2007 to 2008 in the year when he left China.

The book describes the trouble that is not made in China. "Children are looking at the" crocodile doctor ", inflatable swimming pool, plastic lightsaber and fingers, hoping that they will be able to buy Chinese toys as much as possible in the early years of the year.

Lower prices have always benefited China and brought the Chinese economy up, making it difficult for American consumers to abandon China's imports.

The experience of an American journalist trying to leave China for the year has given her a fresh look at the distance between China and the United States.

While launching China's American life, she has come to a conclusion that China has penetrated into American life.

"Made in China" is everywhere in the United States, but it is ultimately the result of economic globalization.

The core of China's manufacturing is that globalization makes it possible for free flow of production factors, product services, financial capital and human resources, which means that the low-cost advantages made in China can also be acquired by others and become an advantage for others.

Reporter: the advantages of manufacturing in China are mainly reflected in labor and land resources. Why are the strengths weakening today?

What is the underlying reason?

Wang Ji Wan: superiority becomes weakness, which is the inevitable rule of market economy development.

We can only get temporary growth before relying too much on low labor costs and low price land resources.

When the trend of Global trade enters into quality, price and brand success, our overdraft success in the past few years will be the return and cost of today's failure.

The most profound reason for this is that I think it is a question of enterprise strategy. It is not far away for an enterprise or an industry to see only 35 years of growth but to ignore sustained growth at a long-term strategic level.

Consciousness innovation is the most fundamental innovation. We still have a lot of businesses and industries who are lucky to be immersed in the joy of rapid growth, while ignoring the potential crisis. This is an important reason that China's manufacturing is losing its edge.

More importantly, with the deepening of competition and relying solely on the so-called advantages of labor force and land resources instead of finding a short board from fundamental product innovation, business model innovation and management innovation, we will face a bigger industrial crisis.

Reporter: the possibility of further speed up of RMB appreciation trend is becoming reality. In March 11, 2008, it created a record high of 1 US dollars for RMB 7.1029 yuan reform. For export oriented Chinese enterprises, the crisis and pressure brought by RMB appreciation is more and more far-reaching.

In addition, in March 8th, international oil prices exceeded 105 dollars per barrel.

What are the far-reaching impacts of RMB appreciation and international oil price boom on China's footwear industry?

Wang Ji Wan: the rising price of resources will definitely affect the development of various industries.

At present, the export of footwear products in China highlights the structural contradiction, which is mainly manifested in the large quantity of export products, but the low price. The export enterprises are large, but the scale is small.

In addition, similar to other traditional processing products, China's footwear industry is still at the end of the industrial chain. We lack control over the intermediate links of footwear distribution in the international market, and the establishment of the retail links network is still in its initial stage.

The rise in oil prices and the appreciation of the renminbi are undoubtedly a cost calamity for the shoe enterprises solely dependent on export trade.

Due to the low added value of our export shoes and the low output value of the unit energy consumption, the Chinese footwear industry must adjust its structure. We must change the old trade growth mode and not lie on the edge of some resource advantages. The Chinese shoe industry will make the industry stronger, bigger and deeper, and the remaining opportunities will be less and less.

If we do not change the way of growth rapidly, then we are waiting for death.

Reporter: once, "made in China" was repeatedly misunderstood and discriminated against.

In the western context, "made in China" is synonymous with low price, low quality and low grade.

For a long time, the export of Chinese goods to the outside world contributes immense energy to the global economy, but often fails to receive due respect and attention.

Chinese brands are also unable to match their competitiveness.

Let's reflect on it. Why?

Wang Jiwan: from a macro perspective, we should adjust the industrial structure, strengthen the service industry matching with the manufacturing industry, get rid of the situation of low cost processing trade, and increase the added value of Chinese manufacturing industry, which is the way for the long-term development of China's economy; from the micro perspective, as a manufacturing industry enterprise, actively exploring new development direction, enhancing the added value of manufacturing industry through technological innovation, brand and talent construction is the only way for Chinese manufacturing enterprises.

Made in China in the 30 years of reform and opening up, it has really won the world market by quantity and low price. But today, when resources are tight, competition is turning to quality and brand competition, our advantages become inferior. To complete the pformation from manufacturing in China to China owned and created in China, I think we should make efforts in terms of the quality, efficiency and brand strength of enterprises, instead of just staying in price wars and resource wars.

China's footwear industry has entered the era of brand winning, not the symbol of advertising surface, but from qualitative changes in product quality, technology upgrading, management innovation, health and environmental protection.

This road does not go today, it has to go tomorrow, sooner or later, it has to cross.

Reporter: in order to make the industry bigger and stronger, China's footwear industry should adjust its structure and change its original trade growth mode.

So how did he turn around in the past few years?

Wang Ji Wan: These are all facts and facts.

One day we realized that it was not important. The important thing is how to practice.

Hengda has been doing it steadily for 25 years. Whether it is internationalization or globalization, it is now a new chapter in the construction of China's footwear industry, and it is a reflection of the effective, quality and healthy growth of China's footwear industry.

For example, we are now building a modern "Silicon Valley" type "Hui Valley", which relies on the advantages of the national economy and industrial policy, the creative industries and software industries of the International Digital Creative Industrial Park, the shoe industry as the carrier, the service economy oriented, the innovation and integration of International frontier information, R & D, operation mode, human capital, knowledge economy and capital operation, and then leads the Chinese and the world shoe industry to develop, create and meet the domestic and international market demand of the modern "Hui Valley", thus promoting Hengda and the whole industry to achieve intelligent industrial upgrading.

This is the "towering tree" that Hengda focuses on and adapts to the development of the market and rationally investing in the main business. The reason why Hengda did so is to seek to build up the blood and genes of healthy and sustainable development and sustainable operation of enterprises, so as to explore a new way suitable for the development of Chinese private enterprises in practice.

We must pform the growth mode, on the one hand, we should make innovations based on customer value and enterprise ecological chain. On the other hand, we should also face up to and face the impact of capital innovation on traditional manufacturing industry. We must win the reputation and market efficiency of the world market, and pform from traditional innovation to innovation and system innovation. I think we must jump out of the dilemma of being a follower, and we must break the line of innovation and realize your differentiation.

Without scientific and standardized market planning, lack of portfolio management, and no improvement in investment decisions, our innovation will be blind and risky.

Hengda will not do things that are irresponsible to customers, shareholders and society. Even if it is a good idea, it will not touch the healthy growth of enterprises. This is the "high voltage line" of the market.

Hengda's pformation of intelligence management is only a prerequisite for Hengda's innovation. To complete the core technology, product reliability, safety, comfort and health, we must stand on the market to see whether the whole innovation pipeline is smooth through the role of the third party, see whether the system innovation supports the whole strategy of the enterprise, and care for the value chain of the survival and development of the enterprise.

Competition and contradiction, when China's shoe industry will end the civil war, is the core hint: in 2007, the cost of raw material import and export of China's footwear industry increased sharply, while the unit price of export finished products fell at the bottom, and the profits of the whole industry went down further.

The unpredictable situation of national policies, environmental pressures, market difficulties and rising costs will make the shoe industry swaying in the predicament.

At the beginning of the year, the thousands of shoe enterprises in Guangdong were closed down, the implementation of the merger plan for BELLE listing and financing, the intensification of anti-dumping, and the rising labor cost in the new labor contract law and so on.

Reporter: thousands of shoe enterprises in the South have gone bankrupt. What enterprises have failed?

In the past few years, foreign anti-dumping has never been interrupted. Is the implementation of the new labor contract law the fundamental reason for their withdrawal from the shoe market?

Wang Jiwan: it is undeniable that the implementation of the new labor contract law will indeed increase the labor cost of enterprises to a certain extent. But in the long run, this increase in cost is not only the need to protect workers and enhance the harmony of labor relations, but also the pains of a country's enterprise development and social progress.

From 2001 to 2007, the number of shoe enterprises in China increased from 2 to more than 30 thousand, and the vicious competition among enterprises and the price war led to a decline in the profit margin of the whole industry.

At the same time, in recent years, a series of raw materials, water and electricity, factory rent and other costs are also rising, the "low cost, low profit" mode of processing trade has obviously no way out.

This means that shoemaking enterprises need to reshuffle, otherwise, the continuation of vicious competition may eventually bring disaster to the development of the whole industry.

I have roughly calculated that the collapse of the PRD is nearly 1000, but its capacity is not as good as that of a leading enterprise.

Obviously, the crisis faced by the PRD footwear enterprises is not a disaster caused by the new labor contract law, but a change to the traditional backward competition mode. The so-called crisis faced by the shoe enterprises is more like a turning point.

After this shuffle, the shoe making enterprises with their own brand and technological content and core competitiveness will stand out and the shoe enterprises will become stronger and more competitive through integration.

Reporter: in May 23, 2007, BELLE international was listed on the Hong Kong stock exchange. At present, its market value has exceeded 100 billion Hong Kong dollars. It is the largest mainland retail listed company in the HKEx market capitalization.

After the listing of BELLE, in November 13, 2007, following the successful acquisition of FILA China Trademark in September, the company acquired assets of 5 companies in the group of 1 billion 600 million, and confirmed that although BELLE was the main female shoe manufacturer, relying on the heavy investment in the hands would achieve the conjecture of men's shoes side by side.

What do you think of the late capital restructuring and market shuffling of China's footwear industry?

Wang Ji Wan: in the stock investment income than the main business income and then lead to the divergence of investor value phenomenon, at present many listed companies happen. In the early stage, household appliance enterprises collectively dig the stock market. There are also clothing giants in the industry. Li Rucheng and his YOUNGOR hold ten stake in the listed company. Many people think that YOUNGOR Li Rucheng three carriages are just like a fish in water.

In fact, we turn back to the depths of thinking, which is a misreading of business operations and business rules.

In May 23rd last year, BELLE international entered the Hong Kong Stock Exchange and its market value exceeded HK $100 billion.

In fact, what YOUNGOR is doing now is "mixed operation". In my opinion, when an enterprise develops to a certain extent, how the new target goes and how to walk healthily and continuously is a question that every enterprise must calmly ponder. You do not hold on to your big tree based on success and development, try to spread seeds everywhere, and expect extensive seed collection, which should not be the style of my enterprise.

Li Rucheng's heart is also very clear that the clothing industry is the first industry of his YOUNGOR, his main industry tree, it has social benefits and stable cash flow, real estate is the second platform of YOUNGOR, there is still room for the development of regional property. YOUNGOR investment is actually not the "bad faith" that the outside world thinks, but the phased business exploration of Chinese enterprises in the changeable environment. This should not be the mainstream of China made and created by China.

The same is true for BELLE. It is the fundamental reason why it can continue to grow today that we must be stronger and bigger.

Leather shoes industry is not a sunset industry, but a sunrise industry with huge market demand and demand. Who doesn't wear shoes?

What kind of shoes do you want to wear in the future?

How to dress with taste, comfort, health and environmental protection?

How does every business adapt to these needs?

Capital is the phenomenon, the market is the essence, but this does not prevent Hengda's capital road. We are also actively planning the domestic A share listing.

Reporter: some people think that apart from the role of "price butcher", it seems that