Footwear Industry In Quanzhou Tries Different Fields

For some small and medium-sized enterprises, how to survive in this tight environment is the most important.

But for some large brand enterprises in Quanzhou, it has already started a diversified operation, and hopes to make use of diversified management to achieve the goal of "vice feeding" so as to further expand the main business.

In recent years, Quanzhou brand enterprises have already set foot in the industry of real estate, finance, high technology and so on, and have stepped up the pace of diversification.

17 months ago, 17 enterprises in Quanzhou formed a group of Fujian businessmen, and concentrated on hundreds of millions of yuan to develop new projects.

In an interview, the reporter learned that the Min business group includes 17 well-known enterprises in Quanzhou, including seven wolves, Haitian, CABBEEN, Gage, AI Deng Bao, Wen Xing and so on. Their joint investment in the establishment of the company is registered as "Fujian Fujian merchants invest in Limited by Share Ltd". Each unit shares 30 million yuan in total, with a total investment of 510 million yuan.

As one of the shareholders of the new company, Wang Yanzhu, chairman of gage, said frankly that if he had been late for many years from the diversification strategy of the company,

However, he still believes that "this year is always ahead of next year", he said, which is a starting point for gage's diversified development.

In terms of diversification, Wang Yanzhu claims that he is not as "farsighted" as other companies, and takes Haitian, one of his partners, Haitian. He also set foot in the credit guarantee industry a few years ago, and has the signs of diversification.

Talking about the original intention of diversification, Wang Yanzhu believes that this is the development strategy of many brand enterprises, while adhering to the main business, developing other "sideline businesses", making use of diversification to strengthen and expand, so as to promote the development of the main business.

"If we want to make a big brand, it will be very difficult to provide enough funds only by the accumulation of wealth in the manufacturing industry."

Wang Yanzhu said that even if these big domestic clothing brands such as YOUNGOR and Shanshan are profitable after diversification, they will be able to increase investment in clothing industry and help the garment industry expand rapidly.

It is a precedent for us to explore the diversified development of Quanzhou's enterprises by probing into different fields.

The real estate industry should be an early intervention in Quanzhou.

Quanzhou's early love flower bra is also a well-known brand. Its boss has invested in real estate after having excess capital.

The investment bosses behind the Quanzhou Strait Sports Center, which will be put into operation at the end of this year, are Anta, nine Mu Wang, Huanqiu, Fei Li and other famous enterprises in Quanzhou.

As early as 2005, these companies jointly established the "West Coast Investment Company on the Straits". Now, the business scope has already involved many fields such as real estate, construction, tourism, clothing, footwear, furniture and so on.

In the past two years, the financial industry has become the "golden cake" pursued by Quanzhou's private capital.

First of all, seven wolves were invested in Societe Generale Bank's equity. After that, many well-known private enterprises in Quanzhou, including Heng, Xun Xing and relatives, joined the Quanzhou commercial bank.

Because in the business world, many enterprises are well aware of the financing difficulties of SMEs, so entering the credit guarantee industry has become an option for Quanzhou enterprises to diversify in recent years.

The Quanzhou credit Company limited by guarantee, established in 2005, introduced private capital, which was invested by Quanzhou Haitian Light Textile Co., Ltd. 40 million yuan and 10 million yuan invested by Quanzhou state owned assets investment and operation company.

Last year, Credit Guarantee Corporation increased capital and expanded shares, and 7 private enterprises injected capital into it.

Today, the high-tech industry has become a new field of private capital concern in Quanzhou.

The newly established "Fujian Fujian merchants investment Limited by Share Ltd" has invested in two high-tech projects, such as optical fiber and battery.

Last year, the foundation of Nanan photoelectric industry base also attracted a lot of Quanzhou's private capital.

In 1999, Xun Xing group, which was invested in Fujian Xun Xing basketball club, was one of the only professional basketball clubs invested by private enterprises in China.

The decision of that year is also a great achievement for the brand building of SBS in recent years.

Industry pressure promotes multiple directions.

The diversification strategy of enterprises is for some brand enterprises to seek greater development.

But over the past few years, private capital has frequently invested in "cross industry" investment. There are deep reasons for it. Insiders believe that this is related to the compression of the profit margins of traditional manufacturing industries.

"RMB appreciation, export tax rebate adjustment, raw material prices rise, labor costs also rise every year, tight money, all of which have led to shrinking corporate profits."

Xu Qinghai, chairman of Jiali children's products Co., Ltd. said that under such circumstances, the traditional manufacturing industry's limited profit margins were even smaller, and many enterprises were in a semi shutdown state.

Reporters also learned in the interview that because of the changes in internal and external environment this year, many small and medium-sized enterprises have abandoned their brand strategy and shifted to order production for large enterprises.

"Shishi Peng Tian has many small and medium-sized sportswear enterprises, and now they are processing several brands in Jinjiang."

In such an industry environment, "some enterprises simply turn off, do not do it, and the remaining capital in their hands will naturally invest in other fields."

Xu Qinghai said.

A person in charge of the credit guarantee industry also told reporters that "manufacturing industry is too tired in recent years".

After several years of capital accumulation, enterprises are reluctant to put eggs in one basket. "Turning around to invest in other fields is also a way to avoid risks."

Which is right or wrong?

The diversification of enterprises has caused much controversy in the industry this year.

Because at the end of last year, the famous American financial magazine "business week" publicly named "YOUNGOR not doing business". It said that the proportion of investment income was too high, while Western-style clothes and shirts fell to the second place.

According to analysis, from 2001, YOUNGOR's clothing sales revenue dropped from 95%% to 61.4%% in 2006, while real estate revenue increased by nearly 300%% over the past six years.

By the middle of 2007, YOUNGOR's profits in real estate and equity investments accounted for 98.5%% of the total profit, while the proportion of the main industry's income was negligible.

Despite the long march of diversified management, there are two totally different views in the industry.

Wang Yanzhu did not agree with the phenomenon that he was separated from his main business after diversification. He believed that pluralistic development should be based on "giving priority to others and nurturing others".

"Just like many brands in Jinjiang, after diversification, they still use their profits in the main industry of development, and continue to make the main business stronger and bigger."

However, diversification often means cross - border investment. Some people believe that this is not a good way to make a big brand.

"Changing careers is not progress."

Xu Jingnan, chairman of PEAK, thinks that enterprises tend to overlook the development of their main businesses when they have tasted the sweetness of being rich after investing in sideline businesses.

"And blindly invest in some high-tech projects and high-tech products. If there is no market for the products produced, diversification will be delayed.