The Way Out For Chinese Shoe Industry Lies In Innovation.

In 2006, a pair of export shoes priced at US $15 could earn US $1.2 before tax. In 2008, the pre tax profits of these women's shoes had dropped to 0.2 US dollars. Behind the sharp reduction of women's shoes by six times is the crisis of life and death that Chinese shoe makers are facing in the global economic turmoil. "World shoes 70% made in China, Chinese shoes 1/4 made in Dongguan". Recently, reporters in Dongguan, Guangdong, known as the "world shoe capital", found that innovation is the key to Chinese traditional manufacturing enterprises to get out of the predicament. After 20 years of rapid development, China is the largest shoe producing country, exporting country and consumer country in the world. Its annual output accounts for nearly 70% of the total global shoe making, and exports exceed half of the world's total exports. According to Zhang Huarong, chairman of the footwear association of Asia, China produces more than 10 billion pairs of shoes each year, accounting for nearly 70% of the total global shoemaking. It is the largest footwear manufacturing base in the world. In January 2008 -9, the export value of China's footwear products amounted to $22 billion, up 15.1% over the same period in 2007, and the number of exports exceeded 50% of the world's total exports. Nearly 2 billion 300 million pairs, ranking first in the world. However, after 20 years of rapid development, China's footwear industry is experiencing the most difficult period. "Internationally, anti-dumping and other trade protection measures are frequent, and the international economic and trade environment is deteriorating. Domestic enterprises are facing RMB appreciation, labor costs rising, raw material prices rising, tax rebate rate reduction, processing trade policy adjustment and so on. The superposition of these factors should make China's shoe industry temporarily unable to breathe." Xu Yong, vice president of China Light Industry Federation, pointed out that Many shoe companies have felt the pain. Dongguan Huajian group is the largest manufacturer of leather shoes in the world. Among the top 50 women's shoes in the world, the top 15 brands are women's shoes. In 2006, to 2008, the cost of raw and auxiliary materials rose from $10.05 to US $10.85, and labor cost rose from $2.23 to US $3.3. The cost of water and electricity rose from $0.18 to US $0.23. Although the comprehensive cost of office supplies and materials saved us $0.32, the export price increased from 15 to 16.2 US dollars. It is the gross profit of an enterprise on a pair of shoes, which still falls from 1.1 US dollars to US $0.7. The continued appreciation of the renminbi reduced gross profit by 0.29 US dollars, and the state reduced the export tax rebates for footwear products by reducing the profits of a pair of shoes and shoes by 0.3 US dollars. Finally, on a pair of shoes, the pre tax profit of enterprises decreased from 1.2 US dollars in 2006 to 0.21 US dollars in the first half of 2008. At present, enterprises are also facing the pressure of order reduction caused by the shrinking European and American markets. As a result, many domestic shoe enterprises are faced with the dilemma of declining profits and decreasing orders. However, at the same time, the deeper problems and contradictions in the industrial structure are also affecting and restricting the development of domestic shoe enterprises. The scale of production enterprises is small, the industry is overcapacity, the export growth is mainly quantity, and the overall profit margin is low; the export market is too concentrated, which easily leads to trade friction; the domestic market is not standardized, and the marketing way is backward, which has pushed Chinese shoe enterprises to the gateway of transformation and upgrading. Wang Ying, Secretary General of China Chamber of Commerce for import and export of light industrial arts and crafts, pointed out: "with the financial crisis in the global chain reaction and the possible impact and damage to the real economy, the chronic diseases existing in China's shoe making industry are concentrated and exposed, and China's footwear industry has entered the most difficult period after more than 20 years of rapid development." Wang Ying said, according to the statistics of the footwear industry in Asia, in the second half of 2008, Guangdong, Dongguan, Huizhou and other surrounding areas, nearly 1000 shoe factories and related supporting enterprises, or actively closed down or were closed or moved to other areas by the court, in 2007, Guangdong has footwear export performance of enterprises, in the second half of 2008, some enterprises have stopped footwear exports, according to the Wenzhou Footwear Association 2008 371 According to the survey conducted by shoemaking enterprises, 32 enterprises have not been started, 52 have been shut down, and 14 have been out of debt, accounting for 34.1% of the survey enterprises. According to statistics from the Bureau of industry and Commerce of Putian, Fujian, nearly 100 enterprises in Putian have gone bankrupt. Some enterprises simply run away from factories, and they have owed the wages of workers and the debts of outsourced suppliers and material suppliers, resulting in many social problems. "A large number of enterprises of several major shoe production bases in China reflect that if production and business difficulties continue until the end of the year, a group of medium-sized enterprises will be closed down." Wang Ying said. Innovation is the way out of crisis. How can Chinese shoes break through from the crisis of life and death? Renowned experts from overseas and domestic footwear industry gathered in Dongguan to convene the "world footwear forum". The world's largest footwear trader, the senior vice president and expert of product and procurement of Brown footwear industry, has almost unanimously pointed out that "China will continue to play an important role in promoting the development of the footwear industry in the world. However, the key to China's footwear industry to go out of the present crisis lies in innovation. Innovation lies in technological innovation, market innovation, brand innovation and so on." Innovation market structure. Experts pointed out that opening up two domestic and international markets is an important part of the innovative market structure. According to the data provided by the Asian Footwear Association, China's annual average consumption of shoes is less than two pairs. According to the latest estimate of Swiss bank, by 2012, the average annual consumption of shoes will reach two pairs in China. The average annual consumption of shoes will exceed 2.5 pairs in China. The total annual consumption of Chinese shoes will exceed 3 billion pairs, increasing by 30% over the current 2 billion 300 million pairs. The space is huge. As a result, the more enterprises that can focus on the domestic market and become more interested in the future, the more successful they will be. At the same time, developing the emerging market and getting rid of the single market is also the key to break out of the shoe industry. The export of traditional European and American markets has shrunk, but Russia, China, Europe, the Middle East, South America and Asia have strong growth momentum in recent years. Shoe companies can reduce the overall export risk by developing different geographical markets, and develop products of different grades in a timely manner and increase product categories to adapt to different markets and customer groups. Innovation brand. Li Peng, Secretary General of the Asia Footwear Association, pointed out that although demand for European and American markets has shrunk, demand still exists. "Whoever first grasps the needs of this change will be able to seize the opportunity of the market." Li Peng, for example, subprime mortgage crisis has changed the way Americans consume their products. They will not buy a few pairs of shoes at the same time, but they will tend to choose high quality shoes with high performance price ratio or multi-functional shoes. This requires domestic shoe companies to work hard on innovative products. At the same time, brand is showing more and more strength in the market. The industry pointed out that the success of a brand for enterprises to negotiate products and influence, often any tangible assets can not be compared. Establishing brand, cultivating brand and strengthening technology research and development are the main means for shoe enterprises to compete in the next round of market competition. Innovative production mode. Zhang Huarong, chairman of the footwear association of Asia, analyzed: "on the one hand, the state has continuously introduced a series of policies to benefit farmers, so that migrant workers are more willing to choose to leave the country without leaving the country to work locally. On the other hand, the footwear industry is also an important industry carrying a large number of jobs. At present, nearly 12 million people are employed in China's footwear industry. The domestic shoemaking industry should actively explore new production models to meet the needs of the development of the situation, such as purchasing research and development and other links still on the basis of mature industrial base, and transferring a large number of processing links to the construction of satellite factories in the rural areas of the mainland, which not only solves the needs of local farmers leaving the countryside, but also enables enterprises to take advantage of labor costs and optimize industries. The chain can be sustained. At present, some shoe enterprises have been trying in this field and achieved preliminary good results. Xiao Nan, editor in chief