Facing The Pressure Of Labor Cost, How Many OEM Shoe Enterprises Should Choose

Influenced by the European debt crisis, the downturn of the world economy, the downturn of international demand and the slowdown of international trade, exit The future is not optimistic.

Attention to exports is more concerned about Hunan's economy. Through this series of surveys on Hunan's exports, we will select four samples of Hunan's exports, explore problems and opportunities, and see the future pattern of Hunan's exports.

Hunan OEM shoe enterprises that entered Hunan with dreams are now trapped in collective confusion - should they continue to move to Southeast Asia?

What makes these inward moving shoe enterprises entangled is that with the decline of labor cost advantage in the mainland, Adidas, Nike and other world brands will withdraw orders from the mainland of China to Southeast Asia. Li Peng, secretary-general of the Asian Footwear Association, once pointed out that "in this case, if the OEM still wants to rely on the orders of Adidas, Nike and other enterprises to survive, it must go with them to Southeast Asia."

After many drifts, the OEM shoe enterprises, like migratory birds, once again embarked on a fork in the road of substantial drift. In particular, those OEM shoe enterprises that have moved to Hunan to avoid artificial rise and other factors are facing two wars - the competition between coastal and other inland provinces' shoe enterprises, and the covetousness of Southeast Asian OEM shoe enterprises.

　 [Status quo] Enterprises with insufficient staff dare not take orders

At noon on August 19, in Hengyang Baishazhou Industrial Park, many enterprises posted employment information at the door.

Hunan OEM shoe enterprises are entering the recruitment season. In the first seven months of this year, the total export volume of Leiyang Nanyang Shoes Industry decreased by about 20% compared with the same period last year, but it is still short of about 200 people as last year. The order of Chenzhou Yizhang Xinchang Shoes Co., Ltd. in the south was placed in November. "According to the size of the factory, the design of plant and equipment and the quantity of the order, another 400 people can digest it," Liu Xueliang, director of the company's management department, told reporters.

"When I first came to Hunan, it was easy to recruit workers, but the labor cost is low. Now it is increasingly difficult to recruit workers, and the base salary has also increased a lot." This is the information obtained when the reporter visited Hengyang OEM shoe enterprises recently.

Labor cost accounts for more than half of the production cost of OEM shoe enterprises. The advantage of easy recruitment+labor cost is the core power to attract coastal labor-intensive enterprises to move in. In about five years, the OEM shoe enterprises that moved to Hunan have been located in Hengyang, Yongzhou, Yueyang, Chenzhou, Shaoyang, Loudi and other places. Hengyang, with obvious advantages in labor resources, has attracted Nanyang Shoes, Juwang Shoes, Baosheng Shoes, Deyang Shoes, Rongcheng Shoes, etc. Unexpectedly, with the inward migration of coastal labor-intensive enterprises in recent years, Hunan OEM shoe enterprises have become "sick" due to lack of people.

According to the statistics of Baishazhou Industrial Park Management Committee, as of July, 15 of the 68 enterprises that have been put into production in the park have "important people". In addition, Shuangfeng Xingang Shoes is short of 1000 people; Shuangfeng Rongcheng Shoes is short of 90 people; Yongzhou Xiangwei Shoes Co., Ltd. is short of 300 people

The shortage of labor force has led some enterprises not to accept orders.

"We are running a production line. If we can't recruit workers, it will have a great impact." Huang Shaozhong, the factory director of Leiyang Baosheng Shoes Co., Ltd., has a deep understanding.

Huang Yihong, commissioner of the Administration Department of Juwang Shoes, said that if the workers could not deliver the goods on time after receiving more orders, they would either empty the freight or compensate for the delay fee. "

In order to recruit people, companies have lowered the threshold. "We have relaxed the requirements for recruitment personnel." Assistant Manager Teng of Shuangfeng Rongcheng Shoes Co., Ltd. said, "Previously, it was 16-45 years old, but now it is 16-55 years old; in the past, there were only women workers, but now there are also men."

Long Liyuan, the head of the Human Resources Department of Juwang Shoes, takes a three pronged approach. If a recommendation fee is awarded, internal employees will be given a cash reward for each novice or expert recommended; Send personnel to relevant villages and towns to distribute recruitment posters and leaflets; Use mobile phones to send recruitment information in groups.

Try to avoid homogeneous competition

"The situation this year may be worse than that in 2008. In Europe and the United States, especially the old customers in Europe, there are basically no orders this year." Wang Ying, secretary-general of the Footwear Branch of the China Chamber of Commerce for the Import and Export of Light Industrial Crafts, said.

In severe situation, in order to avoid homogeneous competition as far as possible Shoe enterprise Their brands and grades are different.

About 90% of the orders of Hengyang Rongyang Shoes Co., Ltd. come from Adidas, Shuangfeng Xingang Shoes Co., Ltd. and Qiyang Kaisheng Shoes Co., Ltd. are mainly OEM Nike brands, Leiyang Baosheng Shoes Co., Ltd. are mainly high-end brands such as KEEN and fitflop, and Leiyang Nanyang Shoes Co., Ltd. is OEM UGG, teva and other high-end brands, "Compared with Adidas, Nike and other brands in the Chinese market, our OEM brands are on the rise and growing slowly," said Xie Shuguang, manager of Nanyang Shoes.

It is understood that due to different positioning, some Hunan enterprises of OEM middle and low-end shoes feel good. Zhan Zhihua, the factory director of Hunan Caixing Sporting Goods Co., Ltd., said, "Our company mainly receives middle and low-end orders from abroad. This year's orders are OK. At present, the average gross profit per pair is about 4-5 yuan. If it is more high-end, the profit will be slightly higher. {page_break}

In addition, the OEM business of domestic well-known brands has also become a new point of contention. Qiyang Kaisheng Shoes Co., Ltd. also processes Anta brand, Shuangfeng Rongcheng Shoes Co., Ltd. 361 °, and Hunan Sandai Shoes Co., Ltd. also processes some of Li Ning's products. Chen Jingyi, the relevant person in charge of Xiangwei Shoes, said that the next step is to prepare a list of domestic brands. "At present, we are talking about cooperation with Tebu."

　 [Challenge]

PK Coastal: staff management becomes more difficult and costs increase

"Compared with Southeast Asia, our mainland does not have many advantages. Now some international brands have not transferred their orders, because Southeast Asia cannot undertake such a large capacity." Wang Ying said to stimulate the nerves of inward moving shoe enterprises.

The outsourcing shoe enterprises also fell into collective thinking - should they have moved in at the beginning. Huang Yihong of Juwang Shoes clearly remembered that "the boss was very cautious when he came here to build a factory, focusing on the proximity to Dongguan, as well as the advantages of high-speed rail and labor costs."

But now, in addition to the weakening of soft advantages such as labor costs, the increasing difficulty in management has become a new situation for inward moving shoe enterprises.

According to the reporter's investigation, more than 80% of the employees of the shoes enterprises moved in are local employees. "Now the employees are all local people, with relatively low cultural level, slow action, and difficult to manage." Huang Shaozhong also calculated an account, "At the same time, with the same number of people, the number of products processed by the current team is about 30% less than that of the team in Dongguan."

Teng Jianqing, the production director of Hengyang Deyang Shoes Co., Ltd., said, "The coastal areas are usually migrant workers. Once they don't go to work, they will have the pressure to survive. But if they work at home, they will not have this feeling. Therefore, we changed the high-pressure management of the 1990s at the forefront of the sea to the nanny management, first to stabilize people."

Xie Shuguang also clearly felt the increase in costs. "Wages have risen rapidly, which is twice as much as when they moved here. In addition, there are not many ready plants in the mainland, so we need to buy land to build them. The cost has increased. In addition, compared with coastal areas, logistics and other costs have also increased relatively because the supporting industries have not kept up in time."

However, the shoe enterprises that moved to Hunan are generally confident about the future. "These years, they have entered a stable growth period, and we are now ready to open a new factory in Chenzhou and Guiyang," said Liu Xueliang.

PK Southeast Asia: Differentiation and high-end may be the way out

OEM enterprises are different from other manufacturing industries. They have high transparency of costs and profits. Once costs rise, they will have the idea of migration.

Stay in the mainland or retreat to Southeast Asia? It has become a choice for many shoe enterprises. In terms of labor costs, Southeast Asia has prominent advantages.

Liu Xueliang said, "Our group company has three factories in Bangladesh and Vietnam, mainly because of cheap manpower. The salary in Hunan is three times that in Bangladesh and twice that in Vietnam."

Teng Jianqing revealed that at present, the group also has companies in Vietnam, Cambodia and Indonesia. According to the company's financial statements, the profits of companies in Southeast Asia are higher than those in mainland China. "The overall production efficiency of workers in Southeast Asia is not as high as that of Chinese workers, but the wages of domestic workers have risen too fast. If the wages are low, none of these international brands will transfer their orders because their transfer costs are also high," said Wang Ying.

As for the weak points of Southeast Asian countries, the production efficiency is the most important thing for the inward moving shoe processing enterprises. "To be honest, the workers in Southeast Asia can't turn their heads around because they are simpler," said Teng Jianqing.

Tang Jianshan, Chief Financial Officer of Hengyang Rongyang Shoes Industry, said that in the short term, some international brands will not withdraw all their orders from China, because the industrial chain of domestic shoe processing is very complete, while that of Vietnam and Indonesia is relatively poor; In addition, China's current advantages are that workers are hard-working and human resources are relatively abundant, while some countries in Southeast Asia are relatively inefficient due to the influence of regional culture. For example, Indonesia has to worship four times a day, and the work on hand will be lost as soon as the time for worship comes. "China's current production capacity is so large that it accounts for a large share of the international market. It is impossible to transfer at once. It should be noted that the higher the technology content, or the brand content, the less likely the transfer is. The transfer is still relatively low-end orders."

At present, shoe enterprises have formed a cascade distribution pattern in coastal, inland and Southeast Asia. For example, Rongcheng Group left high-end orders in Guangzhou, and now Guangzhou has two companies, such as golf gym shoes As well as mountaineering shoes, the orders for medium and high-end shoes are located in the mainland of China, while the orders for slightly simpler shoes are shifted to Southeast Asia.

Wang Ying also pointed out that although low-level orders gradually flow to Southeast Asia, high-end orders will continue to move to the mainland of China. Differentiation and high-end are the way out for the current inward migration of shoe manufacturers.

[Background]

It is reported that from January to July this year, the import and export volume of Hunan's processing trade was 2.54 billion dollars, and the top contributors were CSR Corporation, Lens Technology, Hengyang Shengtian, Guoda Nonferrous Metals, Sany Heavy Industry, etc. At present, the contribution rate of OEM shoe enterprises is not very large, but it can be regarded as a new growth point of Hunan processing trade. From January to July this year, among several key OEM shoe enterprises, the import and export volume of Yongzhou Xiangwei Shoes Industry was 40 million US dollars, the import and export volume of Leiyang Nanyang Shoes Industry was 19.9 million US dollars, and the import and export volume of Leiyang Juwang Shoes Industry was 13 million US dollars.

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