Korean Enterprises Retreat To See The Importance Of Leather Textile Brand Building

The massive withdrawal of Korean enterprises in recent years in Qingdao and Guangzhou has been highly regarded by the governments of China and Korea and widely concerned by the public opinion.

In fact, the withdrawal of Korean enterprises began sporadically as early as 2003.

Some Korean enterprises even took the "escape" way of arrears of wages, taxes and bank loans, which were illegal withdrawal.

According to the data provided by the Shandong provincial foreign trade and Economic Cooperation Department, only one place in Qingdao, 206 Korean enterprises that fled since 2003 have paid 160 million yuan in arrears, involving 26 thousand employees and 700 million yuan in arrears with bank loans.

Why do these Korean enterprises withdraw?

In 2006, the Chosun Ilbo investigated the plight of Korean enterprises in the Jiaodong peninsula. The main reasons were mainly the shortage of labour force, the increase of workers' welfare, the increase of environmental protection, and the reduction of preferential policies.

Some media believe that the new labor contract law, the enterprise income tax law and the Provisional Regulations on farmland occupation tax have further strengthened these factors.

That is to say, these Korean enterprises are unprofitable or even losing money in China, so they have to leave.

These analyses are all right.

But I think the most fundamental reason is that most of these enterprises do not attach importance to brand building.

We see that the "withdrawal" of Korean capital is mostly labor-intensive small and medium-sized enterprises mainly made up of textile, sewing, shoemaking, leather, jewelry and toys. Now the price of labor is rising slightly. Once the preferential policies are abolished, they will not be able to survive. It can be seen that their survival is based on cheap labor and preferential policies.

Is it because they are labor-intensive enterprises?

No, it isn't!

Look at AOKANG, red dragonfly, Bosideng, double star and red bean. Are these enterprises not shoemaking or textile and garment enterprises?

They are also labor-intensive enterprises, but they are thriving, thriving, and their destiny is totally different. Why?

This is because they create a brand, so they have a competitive advantage that is not easy to catch up with, and have strong profitability. They also have a solid foundation for healthy development and resistance to risks.

Some people may say: "brand is after all a minority, and enterprises that attach importance to brand building are not necessarily able to successfully build brands. Even brand enterprises fail because of poor management. How can you say that these enterprises fail because they do not attach importance to brand building?"

My answer is that there are many facts that they do not attach importance to brand building.

The most obvious fact is that many of the retreating Korean enterprises left a lot of debts, and the main management personnel fled quietly.

How can we build a brand without even having the least sense of social responsibility?

I can not say that all brand enterprises are highly charitable social enterprises and charitable enterprises that are responsible for their return to society. But at least the sense of social responsibility should be possessed, at least they can not pay wages and can not evade debts.

Of course, the illegal withdrawal of Korean enterprises is only part of the business.

For most Korean enterprises, they do not attach importance to brand building, and they are closely related to their excessive dependence on cheap labor.

Many survey data show that the wage level of Korean enterprises is the lowest among all foreign-funded enterprises.

With the improvement of the average wage level of Chinese workers, the employment of Korean enterprises is becoming less attractive. Therefore, these Korean enterprises inevitably encounter "labor shortage", unable to recruit enough labor force, enterprises can not produce normally, and skilled workers are also losing a lot. This is a vicious circle.

In the media coverage, these phenomena are common to Korean enterprises.

How can we build a brand without the normal production and the lack of talent?

If we are unwilling to raise the wage level, it is of course related to the nature of enterprises' pursuit of profits. Another fundamental reason is the weak profitability.

Many enterprises must be very clear that the loss of workers and brain drain is not conducive to the development of enterprises. But because of their weak profitability, if they raise their wages, they will suffer losses immediately.

More in-depth analysis, why do they lack long-term perspective?

I am afraid that many enterprises simply do not want to survive for a long time. They can earn more. Of course, they can earn less money. They will not be able to earn any more money until they fail. They will earn enough money, but they will not be able to raise their wages and eat their immediate losses.

In the final analysis, we still do not attach importance to brand building.

Those who are willing to go bankrupt will let them go bankrupt.

Those who do not want to go bankrupt should pay attention to brand and strengthen brand building from now on.

If Han enterprises all regard brand building as modern and Samsung and LG in Beijing, there should be no phenomenon of arbitrary withdrawal.