How Can Chinese Shoe Enterprises Get Out Of The Cold Winter?

If an industry wants to succeed, it must have the idea that no one else has. In the eyes of all of us, few people pay attention to the shoe industry. This reporter interviewed the success of shoe industry, Wang Wanji.

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 the macro point of view, adjusting the industrial structure, strengthening the service industry matching with the manufacturing industry, getting rid of the situation of low cost processing trade and increasing the added value of China's manufacturing industry are the ways for the long-term development of China's economy. From the micro perspective, the manufacturing industry as a whole is seeking new development direction, and the value-added of manufacturing industry is enhanced through technological innovation, brand and talent building, which 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. In order to complete the pformation from manufacturing in China to China owned and Chinese made, I think we should make efforts in terms of the quality, efficiency and brand of the enterprise, not just in price war and resource war.

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 pattern, 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 industries. We must win the brand reputation and market efficiency of the world market. We must change 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, whether the innovation of the system supports the whole strategy of the enterprise, and care for the value chain of the survival and development of the enterprise.

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 is greater than the main business income and then leads 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 have ten shareholding companies on the stock market. Many people think that YOUNGOR Li Rucheng and three carriages share the same drive.

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 do each enterprise adapt to these needs?

Capital is the phenomenon, the market is the essence, but this can not stop the capital road of Hengda. We are also actively planning the domestic A share listing reporters: some people think that, apart from the role of "price butcher", it seems that there is no longer a more suitable role to make "made in China" played.

Similarly, for a commodity, OEM China is often inferior to Japan or even Korea, unless it has a certain market share at a lower price under the premise of homogeneity.

Once the helplessness is formed, the logic of thinking is that the logic of "made in China" in order to win competition in the global market, we must consistently adhere to the "low price strategy".

What do you think of the shoe industry?

When shoe companies and shoe companies, and between Chinese shoes and foreign shoes continue to fight, then when will this end of the long-lasting "price war"?

Wang Ji Wan: our city's home appliance boss Haier Zhang Ruimin has a saying: if you are a brand, you can sell a lot of money. If you are not, you can only rely on Foundry hard work.

Low price routes not only have no way out in shoe industry, but also in other industries.

Foreign markets are not as irrational as the Chinese market.