Adidas'S Termination Of OEM Cooperation: Pain From Chinese Foundry

Today, with the gradual increase of labor costs, the low value-added OEM mode is being tested.

Towards the crossroads of destiny.

It is disturbing that even if the international financial crisis caused a large number of OEM enterprises to drop in profits, drop in business or even close down, they did not arouse the deep introspection of the OEM enterprises themselves.

When the international financial crisis was most serious, many OEM enterprises tried to turn to build their own brands, but in the end they had no choice.

Adidas's China headquarters announced that it would terminate some contracts in China in October this year, and the news spread like wildfire, almost like a landmark event.

Representative factory, to Chinese, is a love and hate name.

It contains the prosperity of economic prosperity and employment, and it also contains the bitterness and grievances of Chinese labor force and Chinese entrepreneurs.

Today, with the increasing labor costs, China's foundry is at the crossroads of destiny.

Peacock Flies Southeast

The Adidas factory, which migrated like migratory birds, has been flying away in China for several years.

although

It has been denied that the withdrawal of Chinese factories has nothing to do with raising salaries and inventories, but industry analysts say that Adidas's withdrawal from China is largely due to the pressure of rising labor costs in China.

Take the factory in Tongling Dong Long, in 2007 and 2008, the number of employees was up to more than 2000, with a monthly salary of 1100 yuan per person.

In recent years, the cost of labor has increased year by year. At present, the per capita wage has reached 2000 yuan per month, and the cost of increase has obviously reduced Adidas profits.

From Europe, Eurasia to Japan, and then to Korea and Taiwan, China will now fly away from mainland China. If we find the logic of "labor cost" behind this path, it is not hard to imagine that Adidas's next "Habitat" will probably be Southeast Asian countries.

Quite skillfully, just in those days, Zhou Xingang, a worker in Adidas factory in Kampuchea, was exploded for only 15 dollars, which indirectly proved the above logic.

According to the reporters, the cost of employment in Vietnam, Malaysia and Kampuchea is only about 1/3 of China.

Before the withdrawal of Adidas and Nike, Clarks, K-Swiss, Bakers and other international

Tycoons have also added production lines in Vietnam and Indonesia.

This is a clear cost account: according to the statistics of the Japan Council for trade promotion, compared with China, Vietnam's production cost is 15% to 30% lower than that of China. Compared with the mainland of China, the average monthly salary of Vietnamese workers in factories last year was about 136 dollars, while that of Indonesia was about 129 dollars, while the average monthly salary of Chinese workers has reached 413 dollars, which is more than three times that of Vietnam and Indonesia. This is indeed very sensitive to labor-intensive enterprises.

Once a feast

Today, Gucci, apple, Nike, Adidas and even some international brand guitars, from electronic products to

From clothing to daily commodities, many international brand products are almost finished in China. With the advantage of labor cost, China became a "world factory" in just 30 years of reform and opening up.

If we open the map of China's foundries, it is easy to find that the OEM of electronic products is concentrated in the Shenzhen area, which can undertake the OEM and assembly of high-tech electronic products such as mobile phones, computers, Apple machines, etc.

Among them, Foxconn is the most famous. Even BYD, which is built on cellphone batteries, has been under the spotlight of its car business. Until recently, Apple was exposed as a supplier. BYD's mobile phone business was once again placed in the spotlight. It was also an apple OEM adapter. The foundry of machine parts processing was concentrated in the coastal area of Zhejiang, which can replace high precision hardware parts; silk, and Foxconn.

The products are concentrated in Suzhou and other places; the furniture subcontractors are concentrated in several areas along the coast of Guangdong. Such as Dongguan and Huizhou, there are many famous large furniture factories, and some imported furniture are actually produced by the workers on the other side.

The foundry is characterized by cheap labor, no core technology, and little profit.

The small profits of the foundries is a fact acknowledged by the whole foundry industry.

A factory employee told reporters that they often entangled with each other in order to receive orders: it might be difficult to ensure profits if they were taken; if not, they would be robbed by other competitors.

However, it is undeniable that some foundries have accumulated experience and certain skills by subcontracting to foreign brands, and developed Shanzhai products on this basis.

The most successful example is Shenzhen's cottage mobile phones and Shanzhai laptops.

The "world factory" was first praised by Britain in the nineteenth Century. In the era of industrial production in nineteenth Century, the country with the strongest industrial production capacity was the most powerful country at that time.

But for China in the twenty-first Century, "world factory" was not a commendatory word.

The world today

It is no longer the era of industry being king. The "world factory" has evolved into a synonym for low value-added.

Two embarrassment of "apple"

In Dongguan, there are many enterprises for Apple OEM, including the largest number of Taiwan funded enterprises, as well as part of Hong Kong funded, Japanese capital and other properties of enterprises, OEM products related to iPod, iPhone, iPad, Macbook and other components and accessories of Apple products.

According to media reports, Apple Corp has more cooperation with Japan and South Korea and Taiwan funded enterprises, because most of these enterprises have strong R & D capabilities.

Comparatively speaking, the scientific research ability of Hong Kong and mainland private enterprises is weaker, and the probability of becoming an apple substitute is relatively low.

Like the five Electronic Technology Co., Ltd. set up by Wuzhou circuit group in Dongguan, it can become Apple's foundry factory.

"The electronics industry has been stagnant this year, but Apple companies have been very healthy.

Apple's influence should not be underestimated. "

In fact, "Apple Corp" is not the only one in the United States, in China, there are also thousands of Apple Corp, they grow, sell real apple.

In 2011, the output of China's apples exceeded 35 million tons, while Apple dealers in Yantai, Shandong, were losing money. 10 yuan and 3 Jin were not enough.

In the winter of apple industry chain in China, the "apple" industrial chain in the United States is full of spring.

In January 25th, the three of the first month of the Chinese lunar calendar, the US Apple Corp released the first quarter of fiscal year 2012.

According to the financial report, Apple Corp's first quarter revenue was $46 billion 333 million, an increase of 73% compared with 26 billion 741 million US dollars in the same period last year, with net profit of US $13 billion 64 million, an increase of 118% over last year's US $6 billion 4 million.

It is worth mentioning that the sales volume of iPhone has reached 37 million units.

Apple CEO Tim Cook excitedly expressed in the earnings call conference, "Apple underestimated the degree of iPhone4S sales in China."

The output of apple in China is 35 million tons, and dealers lose all of them.

The sales of apple iPhone in the United States is 37 million "Taiwan", and dealers are still raising the price in short supply.

This is a comparison between Chinese apple and American apple. Is it not a comparison between Chinese industry and American industry?

In January 16, 2012, the US Apple Corp first announced the list of 156 major suppliers, mainly in mainland China, Taiwan, China, Singapore, Malaysia, Thailand, Czech and the United States. Most of the products were assembled in mainland China, in other words, apple industry chain in China.

Apple, however, has little profit left for the assembly process.

Take the iPhone profit distribution as an example, Apple Corp has a 58.5% profit, and Korea, the United States and other companies occupy 4.7% and 2.4% profits respectively, while the labor cost in mainland China only accounts for 1.8%.

Another aspect of Apple's crazy pursuit is the sweat and sweat of China's cheap labor.

A bright apple product, behind it, is Apple Corp's harsh squeeze on the profits of China's foundry.

How to pform the foundry?

Today, the low value-added OEM mode is being tested.

Even though the international financial crisis has caused a large number of OEM enterprises to drop in profits, drop in business or even close down, they did not arouse the deep introspection of OEM enterprises themselves.

When the international financial crisis was most serious, many OEM enterprises tried to turn to build their own brands, but in the end they had nothing to do. Until now, the examples of successful pformation have not yet appeared.

In the list of Apple's 156 suppliers, there is an A share listed company Angel clean technology.

In addition to business income, Apple has undoubtedly brought aura and industry recognition to angtech.

But the fact that the low added value of China's foundries is also a problem that the whole industry has to face.

Angie technology is a typical manufacturing enterprise in China. It has changed from simple map processing to research and development in the next generation of new products, and can provide solutions for customers' demands.

This type of manufacturing enterprises can represent the future of China's economy better than enterprises that rely entirely on labor and price.

Cai Fang, director of the Institute of population sciences of the Chinese Academy of Sciences, said in an interview with the media: "when the labor force is no longer unlimited supply, capital returns will begin to decrease, and if we do not go to the growth of total factor productivity, there will be no sustainability in development."

The revelation that demographic dividend tends to disappear is the time for China's economic growth mode to change.

The current situation is undoubtedly a heavy blow to these foundries.

For example, in Adidas's foundries, Tongling Dong Long company introduced advanced equipment to ensure its equipment and technology to keep up with Adidas's needs, which cost about 10000000 yuan. After termination of cooperation, the equipment can not be used for other garment processing, but can only be sold at a reduced price.

In addition, due to 70% of the company's capacity to serve Adidas, the termination of cooperation will make the company face "turn around" pains.

The experts of Anhui clothing chamber of Commerce believe that the upgrading of garment industry should move from passivity to self-consciousness.

The old saying goes: "there is no need for anxiety.

Enterprises mainly seek the balance between short-term interests and long-term interests of enterprises, and must be prepared before changes in the future.

In order to cope with the recession of the international market in the long run, the OEM factory has come to the domestic market.