Worrying About The Future Of Dongguan World Shoe Capital

News background: in Dongguan, Guangdong, this so-called "world shoe capital" city, with the closure of shoe factories at the end of the year, people naturally connect it with the promulgation and implementation of the new labor law.

There are even media reports that the new labor law is the last straw to crush camels, and the "world shoe capital" will also be erased from Dongguan's head.

China's shoe industry has been hit hard: collapse, stop production, switch production and move.

One pile, one by one, is full of pains and pains of shoe owners, enterprise workers and related industry practitioners.

The implementation of the new labor law has really put pressure on China's shoe enterprises, especially the informal SMEs, which are facing greater pressure.

However, the new labor law is not the main reason for the collapse of shoe enterprises in Guangdong.

If it is the main reason, Wenzhou and other Jiangsu and Zhejiang provinces have not suffered such a big hit.

In view of the collapse of shoe enterprises in Guangdong, the reasons should be more consideration of their own nature, low cost, low profit, and lack of core competitiveness of labor-intensive manufacturing enterprises lacking their own brands and technical content.

The future of Guangdong shoe companies is also worrying.

The reason is that the shoe factories in Dongguan, Guangdong are mostly Taiwanese funded enterprises. The majority of the OEM shoe factories are mostly processed by single processing, without self-management brand, and without their own sales channels. They can not digest the pressure brought by the sudden high cost in the short term, and the nature of the OEM makes workers work irregular hours, and the management is chaotic.

This processing trade mode organizes production and sales, and decides that Guangdong shoe enterprises are always at the bottom of the price chain.

More than 80% of the enterprises in Guangdong take the form of processing trade to organize production and sale, which makes Guangdong shoe enterprises only earn a small amount of foundry expenses. A Dongguan company disclosed that before earning a meager profit for foreign brand foundries, a pair of shoes can earn only 1 or 2 dollars (1.44 to 2.88 yuan), while the average export price is about 14 dollars.

Raw material prices, water and electricity charges and factory rents continue to rise, but the cost of processing and products has not risen, making many factories unsustainable.

Always at the bottom of the price chain.

In Wenzhou, brand and channel are the killer of Wenzhou shoes in these years. Enterprises have the right to make independent pricing, adjust sales strategy, dominate the terminal and agents. The brand established with many years of credit is guaranteed, and will not be destroyed because of the increase in cost in the short term.

Especially after fierce market competition in recent years, the disadvantaged enterprises have been eliminated. The current Wenzhou shoe industry team has been more and more "elitist", and a group of cluster brand enterprises has become the main force leading the general direction of Wenzhou shoes.

In addition, a series of problems such as "labor shortage", EU trade barriers, new processing trade, and RMB appreciation, have made local shoe companies suffer a heavy blow.

Is it the only way to close the door, only to migrate?

To fundamentally solve these problems, we need not only Guangdong shoe enterprises to enhance brand awareness, increase R & D investment, but also need local governments to upgrade industrial matching.

What should be done is to improve the technical content of the product and create its own brand.

For many shoe companies, there is only one way out for the future: only technology development is the way out for enterprises. No technology is always controlled by others. We must take market demand as the basic, increase technological innovation, accelerate strategic pformation, and pform technological advantages.

The Pearl River Delta business quotes "no one wants to go, but there is no way to sustain it."

The RMB continued to appreciate, the price of raw materials increased, the cost of wages increased, recruitment was difficult, export trade was suppressed, and policies were frequently adjusted. Just now, the new labor contract law and the "two tax unification" new policy were promulgated and implemented. "We have hung a knife on the head."

"The operation environment of small and medium-sized enterprises in the Pearl River Delta is just like an increasingly tight network."

"Everything has gone up, making no money, even the workers are hard to recruit."

"The space for development here is getting smaller and smaller."

Editor's note is a painful process. What kind of future will Guangdong and other Pearl River Delta footwear enterprises face after they fail and move?

In the current high pressure, restlessness, hesitation, confrontation between the labor pains, let all the industry worried.