Jinjiang Shoe Enterprises Seek Difficulties In Difficulties

As the world's largest producer and exporter of footwear products, this year, shoe manufacturers in China are faced with problems such as declining export volume and declining profits. Accelerating the upgrading of competitiveness has become an inevitable choice for these enterprises.

In Jinjiang, Fujian, 2 out of every 5 pairs of sneakers in the world come from here.

As the world's sports shoes capital, under the pressure of rising raw materials, many shoe manufacturers are facing the dilemma of half stop production, shutdowns and closures this year, and even more than 20 small and medium-sized enterprises have been closed.

He Quanhua, general manager of Fujian Mei Mingda shoe industry development Co., Ltd.: no pformation, facing the compression of profit space, no profit, the enterprise will eventually go bankrupt.

He Quanhua's Mei Mingda shoe industry is a OEM enterprise specializing in the US market, exporting 15 million pairs of shoes annually.

He wrote the accounts to reporters: a pair of shoes 5 dollars, gross profit margin is only 10% to 15%, and this year, the cost has risen 35%, the shoe price has increased by about 15%, and 20% of the cost pressure has been digested by the enterprise, so there is a possibility of losing money, and the enterprise is also caught in the awkward situation that the order is afraid to pick up.

In order to survive, He Quanhua took out the brand registered in China five years ago, intends to re register abroad, and invest nearly tens of millions of dollars in R & D costs.

He Quanhua, general manager of Fujian Mei Mingda Shoes Development Co., Ltd.: we want to use our own brand to go abroad, and think of ways to improve the R & D capability of our products so that gross margin can be increased by 10% to 15%.

In Jinjiang, more than 80% are the OEM enterprises. As they seek a way out, the Anta shoe industry is busy developing new products for the business opportunities.

Scola, director of the R & D Department of Anta Sports Products Limited, Ruan Guo Qing: This is made by us for Beijing. He will wear it at the Olympic Games. You can see that this pair of shoes is very big, and it has 54 yards.

Anta launches about 10 thousand new products every year, and has invested more than 1 billion in research and development.

Unlike most of the OEM companies, Anta started looking at the domestic market ten years ago, expanding its own brand, and spending 50 million yuan to create the "Sports Science Laboratory", the highest level R & D institution in the field of sports goods in China.

In 2007, Anta's gross profit margin was 33.2%, much higher than the average gross margin of 10% of OEM export enterprises.

Ding Zhizhong, chairman of Anta Sports Products Limited's board of directors: from a simple road that simply relied on manufacturing and price, it has come to a road driven by brand.

At present, there are 38 enterprises like Anta in Jinjiang, with an average profit margin of more than 30% this year.

To get out of the predicament, the other more than 3000 enterprises that only made OEM have begun to increase technological innovation and build their own brands. In the first half of this year alone, 252 R & D centers were set up, and about 1000000000 yuan was invested in technological pformation.

Li Jianhui, mayor of Jinjiang Municipal People's Government of Fujian Province: we can't do OEM or OEM all the time. We should get our share in the whole value chain curve.