Home >

The Global Shoe Buying Pattern Is Quietly Changing. China Still Has The Dominant Position.

2013/12/19 14:47:00 59

??? 日本語 Fran?ais English 中文

Investment Export Industry Shoemaking Industry

"who will become the second China"? This is perhaps the highest frequent problem in the world's < a href= "http://www.91se91.com/" target= "_blank" > shoes < /a > trade category.

there is only one answer: "the next China is still China".

even though the best shoe purchasing manager in the world has carried out a thorough investigation for 10 years around the world, the answer remains the same.

although it is troublesome to find suitable procurement areas to replace China, many small countries still have important sourcing resources for shoes. This article focuses on the advantages and disadvantages of these main purchasing countries.

the biggest problem is the cost, labor resources and infrastructure investment required for shoemaking.

the next argument is that at any time in the foreseeable future, any combination of any alternative country or any other supply country will not be able to replace the huge infrastructure investment required by China.

although the problem of cost and labor supply will continue to beset China's < a href= "http://www.91se91.com/" > shoe-making industry < /a >, China will continue to maintain its hegemony as China is pouring out many new procurement needs and the more efficient the existing infrastructure is being pformed.

(P) of course, the appreciation of the RMB against the US dollar has led to a rise in manufacturing costs in China, forcing many companies to try to find producers in other countries.

China's renminbi is stronger than P, but it looks unlikely to have a devastating impact on millions of jobs in China's huge export industry.

China's leaders have largely adjusted the adverse effects on social stability.

Global Sourcing hegemony China.

In 2012, China's shoe production accounted for 2/3 of the total output of all the big shoemaking countries in the world.

And China has almost the same proportion of global footwear exports.

China produces about 13 billion 500 million footwear and nearly 10 billion 100 million pairs of shoes exported.

Compared with the shoe giant in China, all other production areas are out of reach.

In fact, according to the table below, China's footwear production and exports are more than the total number of all the major shoemaking countries in the world.

it is estimated that China's footwear export volume increased by 4% per unit in 2013, its value increased by 7%, and its export earnings reached the highest point in recent years.

Less than P, China has made such a remarkable export performance, though the hourly cost of factory workers in China has increased by two times, rising from less than US $0.50 in 2005 to US $2.

The increase in worker costs is due to the following factors:

1., the government departments demand a sharp increase in the minimum wage standard with a strong attitude.

2., more stringent enforcement of relevant regulations and regulations on overtime and social cost.

3. labor shortage is becoming more and more serious throughout the country.

4. implementation of environmental law

5. the prices of food, energy, water, electricity and other important materials increased by less than /p.

6. the exchange rate of RMB against the US dollar has appreciated by about 30% compared to 2005.

many manufacturers are striving to improve the productivity of existing investments.

In order to make migrant workers work more steadily in their company, some producers have adopted additional benefits such as increasing their living space, improving dormitory / Catering conditions and increasing their chances of receiving education.

P, however, entrepreneurs are increasingly aware of the limitations of changing the existing labour problems of factory workers in the Pearl River Delta.

Therefore, we began to locate factories and / or sewing sites in the mainland of China with labour resources and cost less than the Pearl River Delta.

The main target areas in the mainland are: (1) Jiangdu, Danyang and Suzhou in Jiangsu, (2) Zhoukou in Henan, (3) Putian in Fujian Province, and Anhui, Jiangxi and Jiangxi provinces.

China's road and railway infrastructure is very developed, enabling materials and executives to be more convenient and efficient in China's mobility (using high-speed rail system), and many new and lucrative projects that have made China's footwear industry remain.

in fact, many overseas buyers have pferred the purchase plan to the new shoe distributing center in China, which is not used as a shoemaking base before, but now has a very complete facility.

These include: (1) Wenzhou and Wenling of Zhejiang Province, (2) Jinjiang and Putian of Fujian Province, (3) Chengdu City, Sichuan province.

Less than P, probably from China made in the US footwear market in Shanghai, can best reflect China's hegemony.

In 2013, China accounted for about 82% of us footwear imports, almost the same level as ten years ago, but it was lower than the unprecedented 89% of the total imports of footwear imported before the severe recession in 2008.

(China has a 76% share in the EU import market. Footwear imported from Europe accounts for 85% of consumption, while 99% of the footwear market in the US market is dependent on imports).

China's share in the US market has decreased due to increased imports from other countries.

As mentioned below, most of the footwear that has been withdrawn from China is sports shoes and outdoor products, as well as other very few low value plastics and < a href= "http://www.91se91.com/" target= "_blank" > leather < /a > manufacturing female products.

The reasons for these changes are mostly due to the fact that the other productive countries have enough labor and the cost of workers much lower than that of China P.

the cost of workers and workers.

According to the results of the GFP worker cost survey conducted by the world's major footwear and footwear exporters (as described below), one of the most striking points is that China's labour costs have ranked the top among all the major manufacturing countries in Asia.

Ethiopia, Bangladesh, Kampuchea, Vietnam and India have less than half the cost of workers per hour than P.

To illustrate the attractiveness of its labor costs, the advantages and challenges of each country are discussed below.

(insert "2013 shoemaker cost comparison table")

the hourly cost includes all the expenses that the factory needs to bear, including wages, social welfare, bonus, accommodation and so on.

The exclusive database is information provided to GFP by shoe factories around the world.

Ethiopia.

At present, there are at least three Chinese companies making investment in shoes export manufacturing. The largest one is the Huajian Footwear Group, headquartered in Dongguan, Guangdong, China. The group has 4 factories and 3000 workers in Ethiopia, mainly producing high quality women's shoes, which are mainly exported to major customers in the United States.

According to us import data, the United States imported more than 100 million pairs of shoes from Ethiopia in 2013, which is more than 200% higher than that in 2012.

Huajian group has consistently provided intensive training courses to selected Ethiopia workers in China factories and has tried to bridge the cultural differences between the two countries.

(taking into account the linguistic and cultural differences between Ethiopia residents and local workers who are not accustomed to observing factory work discipline and quality requirements of Chinese manufacturers, it is urgent to invest in workers' adaptation to related environment.

the country is very optimistic about the prospect of attracting more foreign investment.

Besides the leather produced locally, other shoe making materials (especially < a href= "http://www.91se91.com/" target= "_blank" > textiles < /a > supply) have great potential.

in addition to a large number of low-cost labor force (about $0.32 per hour), the government of Ethiopia has also strongly supported its efforts to establish laws and regulations for investment, set up new industrial parks and encourage foreign investment in labor-intensive projects.

In addition, Ethiopia's currency stability is conducive to the US dollar, and its products imported to the United States enjoy tax exemption.

The United Nations has been supporting the development of leather industry in the past decades, making the leather industry in the country well developed, and the quality of sheepskin and goat skin produced by the United Nations has reached the international level. It is very suitable for shoemaking. P

It is regrettable that many manufacturers in the shoe industry are far from participating in the export business, and the development of industry seems to depend entirely on external investment.

because of the long production cycle and long turnover time of logistics, the longer pport period and the higher pport cost are still problems to be solved.

However, the innovation identified by the client shortens the gap with China.

In the near future, the level of production increase and overtime pay will be equal to the Asian production cycle / cost.

shoes industry and < a href= "http://www.91se91.com/" target= "_blank" > clothing < /a > export factories are mostly located in the capital city of Addisababa. The number of residents in this city is about 4 million 200 thousand, which is a fairly modern city with a world-class international airport.

no matter by any standard, Ethiopia is considered a poor country in East Africa. Its population is 92 million, its GDP per capita is less than 1000 dollars, and the official statistics unemployment rate is nearly 20%.

Located in northeastern Africa, it borders on Somalia, Kenya, Sultan, South Sultan and Eritrea. Its western part is adjacent to Djibouti, a small bullet country on the west coast, and is also the only sea export of Ethiopia.

Despite the ongoing political turmoil in neighboring countries, Ethiopia has long maintained a stable political environment and is China's preferred investment target. The government is eager to develop rich domestic natural resources.

Bangladesh.

In recent news reports, a large number of labour disturbances were reported in its huge service export business.

The South Asian country is located in the eastern part of India, and for a period of time, it has formed a fairly large scale foreign investment shoemaking industry.

Footwear manufacturers such as Baocheng, Xing ang and Xinchang have invested in the country, mainly using the thick leather produced locally to produce outdoor products for customers such as Tian brun and fox world.

P, the largest footwear manufacturer, is YoungOne, a sports shoe and garment company in Korea. It has a shoe factory employing 30 thousand workers with a daily output of 100 thousand pairs. The YoungOne is the largest footwear manufacturer in Korea.

And there are many factories in the country for exporting footwear and clothing.

According to the US import data records, 1 million 400 thousand pairs of shoes were imported from Bangladesh in 2012, each worth about 19 US dollars, with a total value of 26 million 700 thousand US dollars. P

In 2013, US imports grew at a steady rate of about 5%.

(Bangladesh is the largest exporter of footwear in the EU, and exports to the EU amounted to 14 million 900 thousand pairs in 2012. However, the price of products is lower and the average price of FOB is US $11.08.

with sufficient light and strong labor force, the cost of workers per hour is only 0.44 US dollars. These factors have obvious advantages for the country.

In addition, government departments also support foreign investment and give preferential tax policies and other investment incentives.

(in December 2013, the government implemented a policy of substantially increasing the minimum wage level.

Although it is just appeasing trade unions and demonstrations, it will still increase hourly costs, which may threaten the attractiveness of the country to some foreign buyers.

the logistics of the country is unobstructed and the price is not too high, but the production time of large goods is at least 1 months longer than that of China.

Most of the imported materials need to be imported from China except for the leather produced locally.

{page_break}

Less than 15 million people live in the capital of Dhaka. This is probably the most populous city on earth. Bangladesh is also one of the poorest countries in the world. Its GDP per capita is less than 2000 yuan P.

But the official unemployment rate is only 5%. It is worth mentioning that Dhaka has about 400 thousand rickshaws, and the efficiency of its human porters is not optimistic.

(P) because Bangladesh's political instability and labor riots (strike has become a way of life) and the government departments which basically do not work (neither local governments nor national governments have found no way to keep their voters away from street protests), whether Bangladesh can invest in foreign shoes is unknown.

P, however, in order to deal with the social responsibility problem caused by the deadly fire and collapsed buildings in Bangladesh, the EU and US clothing importers have gone through a series of twists and turns, which enables us to see clearly that Bangladesh may become a garment export hub in the future.

Referring to the performance of the garment industry, it is not hard to imagine that there will be some investment in shoemaking industry in the future, but the premise is that Bangladesh satisfactorily solves the problem of labor and security. Can it be solved?

Less than P, Kampuchea. In many smaller Asian producing countries, the advantages of any country with China's cost gap are less than that of Kampuchea.

West of Kampuchea is next to Vietnam, and exports to the United States account for about 75% of its total output, while exports to the US in 2013 are expected to exceed 6 million.

Most of the footwear produced in Kampuchea is sports shoes or casual shoes. The average price of FOB is between 9 and 13 dollars.

We only know that there is a larger investment project to produce low-cost products for the mass market of the United States.

Almost all factories in Kampuchea, P, are built on the basis of investment in China. Most shoe industry groups have workplace in China and Cambodia.

There are about 45 such factories in Kampuchea.

Most of them have been put into production in order to circumvent the anti dumping order issued by the European Union in 2006 -2011 against Vietnam and China (now all the anti-dumping orders have been permanently terminated).

Most of the footwear produced in Kampuchea is still sold to customers in the EU market, but it is exported to Kampuchea. In 2012, it exported about 29 million pairs, and the average price of FOB was US $13.55.

because almost all shoe making materials must be imported from China or Vietnam, the production cycle is usually longer than China's production for several weeks.

currency in Kampuchea is relatively stable, and the cost per hour is low ($0.61).

In this country of about 15 million people, the official unemployment rate is zero.

Therefore, shoe factories sometimes fail to guarantee the total number of workers required.

In addition, trade union activities that represent the interests of workers are quite active. They will put pressure on factories to increase wages, shorten working hours, and sometimes require air conditioning in dormitories.

although the per capita annual income of the country is only 2100 US dollars, it is one of the lowest income countries in the world. However, due to the strain of labor supply, the prospect of new and large-scale investment in the footwear industry is still doubtful.

Phnom Penh, the capital city, is a fairly modern city with a population of about 1 million 400 thousand. Most of the production plants are not far from Phnom Penh.

the current export volume to the global market is about 40 million pairs, but it is not certain that there will be a significant increase in the future.

It is foreseeable that the volume of exports of existing factories will increase.

Vietnam. China has the highest volume of footwear production in the country.

Most of them are brand sport shoes, but in recent years, the output of low-priced shoes for mass consumption in the US and EU markets has increased, and the output of quality women's shoes has also increased.

Less than P, Vietnam's footwear exports in 2012 have reached 600 million pairs, becoming the world's second largest footwear exporter after China.

dates back to the 20 world imaginary mid 90s, when Vietnam had almost no footwear exports.

Today, Vietnam has become the most important foreign shoemaking investor in addition to China. It is the world's fourth largest shoemaking country. In 2012, the production of footwear was 725 million pairs, of which the export part was nearly 90%.

P > the foreign investment in Vietnam was originally derived from the European Union's restrictive quotas on footwear imported from China during the period of -2004 in 1994.

The U.S. imports from Vietnam have increased sharply in the last 5 years, with imports of 97 million pairs in 2007 and 191 million pairs in 2012, almost doubling in 2012.

During this period, the volume of sales to the EU market is maintained at around 200 million pairs per year, which is due to the earlier entry into Europe and wider coverage.

taking into account the lower cost of workers in Vietnam ($0.80 per hour) and the larger population (over 90 million), Vietnam seems to replace China as the best choice for shoemaking industry.

unfortunately, many other industries, including hi-tech, share the same idea. At present, most factories are located in the southern area. The competition among workers is fierce. Especially in the 9 million Hu Zhiming City, labor competition is more obvious.

Undoubtedly, the land price of Hu Zhiming city is very high, which makes the cost of factory investment very expensive.

Moreover, the fact that the unemployment rate of the country is almost zero has made investors more aware that there will be no large-scale new factories for shoemaking from China to Vietnam.

A large shoe-making investment project in recent years, which is a few hours away from the city of Hu Zhiming, is described in the words of the jungle area in the southwestern part of the city (a battleground in the Vietnam War in 1960s. The North Vietnamese cemetery in the area can be seen as evidence). P

The project seems to be one of those projects that have exhausted all the available labor force in the surrounding villages and towns.

Similar to Kampuchea, P does not seem to have enough idle labor force, or there are reasonably priced land near the workers' residence to support large-scale new shoe factories (unlike China, not providing dormitories in Vietnam).

because the construction of a huge shoe making infrastructure has been built, the use of this convenient condition will undoubtedly bring the production capacity and export volume of Vietnam's core products, especially brand sport shoes to the extreme. In the short term, the production and export volume of footwear will probably continue to be increased through technological reform.

"P > India. As the second largest footwear producer in the world, India seems to be a natural arena to replace some of China's footwear export business, but its annual average export volume is only 115 million pairs, which is far from the standard of the world's top footwear exporters.

According to the industry report, India's export performance in recent years has never seen any significant growth.

according to official data, India produces about 2 billion 100 million pairs of shoes a year, but it must be noted that most of them are produced for local consumption in small workshops, and their style / quality does not meet the export requirements, which accounts for more than half of the total output.

although the cost of workers in India is low ($0.85 per hour), its currency is weaker than the US dollar, with a population of 1 billion 200 million and low per capita income (less than $3000), but India's export sales are insufficient, which must be explained by other factors besides cost and labor resources. The following are a few key factors.

1. India's production of leather products is dominated by men's and sandals, so there is a huge gap in the export business of other products.

2. there are few foreign investors in the shoemaking industry, partly because although there are two quite successful pilot projects in the export brand shoe business, the employment / dismissal of labor laws in India is rigid.

3. there are two large shoe distributing centers in India, one in Chennai on the southeast coast, and another in the northern part of the country. The distance between the two countries is almost the length of the north and south of the country. When the buyer tries to manage the production situation, this situation increases the management cost and difficulty.

however, India still has a strong "a href=" http://www.91se91.com/news/index_s.asp "export industry < /a >, and most of its products are sold to small retail groups in the EU market.

Moreover, small brands are more cooperative with small suppliers (on the contrary, China's super factories mainly serve large retailers and big brands in the US).

India's exports to the EU have been hovering around 70 million pairs a year, valued at about $1 billion a year, and there has been no growth in recent years. This is probably due to the bad retail climate in Europe, and Europe's economy has been in a low state since the financial crisis of 2008/2009.

India's market share in the US is very small. Its exports to the US market in 2002 were 6 million 600 thousand double, to 2012, to 13 million 500 thousand double, almost doubled.

The footwear exported to the United States is a high quality leather product. The price of each pair of FOB is about US $20. The main products are men's sandals and "hand-made shoes" produced for brands such as Cole Haan.

if India can introduce a large amount of foreign investment, the export volume of footwear will undoubtedly increase in the near future, otherwise it will not be able to break the existing pattern and become a new force in the global footwear export business.

{page_break}

other countries /p >

Indonesia.

As the world's fifth largest footwear producer, Indonesia's footwear exports ranked third in the world.

It is the world's third largest brand sport shoe producer, and perhaps the second largest exporter of sports shoes after Vietnam (because sport brands use low cost advantages, although China still produces a large number of sports shoes for local market consumption, but many of China's sports shoe exports have already flowed into these countries).

it is necessary to reiterate that because of the lack of new foreign investment in the footwear industry, the export business is stagnant and there is no big breakthrough.

The reason for the lack of funds is likely to be a rise in the cost of workers, which now reaches US $1.75 per hour, which is close to the cost of workers in China. With the government's further promotion of social equity, the cost of workers in the country may still be higher.

P is similar to Vietnam. With good infrastructure, we can foresee that its export level will be higher. But in the current situation, apart from sports shoes, it is doomed to be unable to replace the products produced in China in a large scale.

the big country in the region is the Republic of Dominica (DR).

The cost of its workers (US $1.81 per hour) is similar to that in Indonesia and China.

But unlike the two Asian countries, it takes only a couple of days to pport goods from the Republic of Dominica to the United States and enjoy the tax exemption from the United States.

The footwear exported to the United States in 2012 amounted to 8 million 700 thousand pairs, and the average price of FOB was 24.21 US dollars. These shoes were mainly produced in factories opened by Brand Company, such as Timberland, Wolverine World Wide, Rocky Boot, etc.

Although the cost of labor in neighbouring Haiti is very low, some of its labor force has been sent to factories in Dominica, but Dominica's export business has not increased significantly in recent years.

A recent large-scale investment comes from a large Brazil group company, which means that the country is about to increase its export of new high quality leather shoes.

investment in leather and leisure products in Nicaragua and Brazil enterprises, because the cost of workers in Nicaragua is more attractive ($1.22 per hour), plus the advantage of us duty-free concessions near the United States, it will invest more in Nicaragua.

However, it must be noted that a larger Brazil shoe investment project has been permanently closed recently (perhaps because of the reasons for management decisions and little relationship with the country).

Less than P, Salvatore or Guatemala has no foreign shoe investment in recent years. The situation in these countries is not much different from that in Nicaragua.

Unlike Nicaragua, both countries have well-developed domestic shoe companies.

Mexico. The population of the country is about 100 million. It has been banned from China for a long time (now the market has been opened and the footwear imported from China only levies the usual tariffs). Mexico has a large and diversified domestic shoe market.

The cost of workers in Mexico less than p is almost two times that of China, reaching US $3.87 per hour, but it is lower in some rural areas.

Mexico's women's leather shoes and Western style tube boots are highly skilled, and are close to the United States, enjoying the tax exemption from the United States.

In making these niche products, these advantages make it an excellent sourcing country to replace China, especially when a brand is rapidly updated as a major business strategy.

2012, Mexico exported 18 million 900 thousand pairs of footwear to the United States, compared with 15 million 700 thousand pairs exported to the United States in 2004, a slight increase.

"P > Brazil. Macroeconomic reform has made this Latin giant the world's exporter of iron ore, soybeans, meat, fruit juice and sugar products. Meanwhile, macroeconomic reform is destroying almost all labor-intensive export industries.

The appreciation of Brazil's currency has severely weakened the export volume of powerful export industries.

P today, Brazil is still producing the world's best price leather shoes, but the local currency is strong, resulting in a sharp decline in exports.

Brazil's current competitive export footwear is mostly concentrated in Havaianas and other world-renowned brands of injection molded shoes.

because most of the export shoe companies have already been pformed to meet local consumption needs, or to pfer to other countries or to suspend business, so even if the local currency is sluggish, the volume of exports will not increase significantly.

European countries.

Some of the best footwear in the world still come from Italy, Spain and Portugal.

There is no doubt that Italy and Spain will remain dominant in the leather luxury / fashion industry, and Portugal will continue to make big strides in the export of new designs and innovative styles, especially in the euro dominated areas.

However, these countries can not play any important role in replacing Chinese products.

Burma. English used to write "Burma". On the western side of Thailand, the population is 60 million, which is one of the poorest countries in the world, mainly due to its military dictatorship which has isolated the world for nearly twenty years.

In recent years, the political progress of the country has lifted the trade embargo between the United States and the European Union.

perhaps because it is the last country to be developed in Asia, Burma has made the footwear industry a strong interest in exploration, and several major Chinese manufacturers have entered the country.

The main shoemaking manufacturers in Thailand, P, have also studied the possibility of setting up a raw material production plant in Burma's border area near Thailand.

because of the extreme shortage of basic infrastructures and the high cost of infrastructure construction in major cities such as Yangon, there seems to be no advance in any project at present, and Chinese investors are most likely to invest in the country first.

conclusion.

Despite all kinds of bad predictions and endless discussions, if there are no macroeconomic upheavals, it seems that China will continue to sit firmly in the leading position of the global export industry in the next few years.

Generally speaking, all the countries that have replaced China in this article have various obstacles, thus restricting their development potential as a real power like China. P

Labor in Vietnam and Kampuchea is in short supply, and land prices in Vietnam are also an obstacle. The cost of workers in Indonesia is almost as high as that in China, while India is not only short of foreign investment, but also rigid labor laws. Bangladesh is suffering from harassment by workers.

Latin American countries have yet to attract investment from the greater overseas footwear industry. Perhaps there will be no shortage of Asian turmoil in the future.

perhaps Africa has the greatest potential, especially in Ethiopia. The country not only has the most attractive labor resources, but also has the support of the Chinese government, making it the most popular place for major external investment (most of which are a href= "http://www.91se91.com/ news/index_q.asp" > investment > /a "may come from Chinese entrepreneurs), which will determine the future of shoemaking industry.

Peter T. Mangione, general manager of global footwear Cooperation Co., Ltd., December 9, 2013