Changes In China'S Leather Industry: On The Right Track

In 2014, China's annual sales revenue of more than 20 million yuan (hereinafter referred to as the regulation) leather, fur and products and footwear enterprises (hereinafter referred to as leather main industry) sales revenue of 1 trillion and 300 billion yuan, the growth rate dropped 1.5 percentage points.

Among them, apart from leather clothing industry, other sub sectors growth rate has declined.

The effect of the central region's undertaking pfer has shown a 15.7% increase year on year, a slowdown in the eastern and western regions, a decline in the level of industry profitability, a total profit of 83 billion 120 million yuan, a 4.9 percentage point drop in the growth rate, and a 6.5% profit margin, a 0.04 percentage point drop compared to the same period last year.

In particular, coastal provinces are facing pains in the process of pformation and upgrading. The profit margins of leather and leather provinces such as Guangdong and Zhejiang are only 3.6% and 4.6%, lower than the average level of the industry.

In 2014, the export growth rate of the main leather industry in China dropped for 3 consecutive years, with a total export of US $88 billion 900 million for the whole year. The growth rate dropped by 1.8 percentage points. The industry imports 9 billion 370 million US dollars, an increase of 10.7% over the same period last year, and the growth rate has been speeded up by 2.2 percentage points.

Ye Xiangju, Deputy Secretary General of China Leather Association, said in an interview with reporters that in addition, the economic operation of China's leather industry in 2014 also showed the following characteristics: first, the obvious pulling along the belt and the sharp increase of exports in the western region.

Among them, Xinjiang grew by 84.5% compared to the same period last year, becoming the fifth largest export province in China. Exports from Inner Mongolia and Ningxia doubled, up 135.7% and 161.6% respectively.

The 5 Asian countries in the Silk Road Economic Belt surged 85.9%, and Kazakhstan jumped to become the seventh largest exporter of leather industry in China.

Two, exports to ASEAN, Africa and other emerging markets have increased by 11.6% and 19.1% respectively. Africa has become the highlight of China's leather industry.

Three, the consumption oriented Shanghai instead of the processing trade type Guangdong has become the first big import Province in China, indicating that the consumption structure of leather industry has changed.

In 2014, Shanghai and Guangdong accounted for 3 of the total imports of leather industry, but there were obvious differences in imports: Shanghai imports mainly shoes, bags and other products, accounting for 87.5% of its total imports; Guangdong imports mainly raw materials such as finished leather, semi finished leather and tanned fur, accounting for 86% of its total imports.

The four is the continuous increase in the unit price of export products. Taking the footwear industry as an example, the average export price per pair of shoes is 5.01 US dollars, an increase of 10.1%.

According to Ye Xiangju analysis, many factors led to the slowdown in China's leather industry and the decline in profitability in 2014. However, the main causes were the weak market demand, the continuous growth of production costs, the financing difficulties of SMEs, the pfer of industries to Southeast Asia and the high tax level of enterprises.

In 2014, the domestic and foreign market demand of leather industry was not good.

Among them, the 6 major products export markets represented by the United States, the European Union, ASEAN, Russia, Japan and China Hongkong account for 69.1% of China's leather industry exports. Demand is not strong and growth is slowing down, and the consumption power of the domestic demand market is also insufficient.

In 2014, the total retail sales of consumer goods increased by 12% over the same period last year, and the growth rate dropped by 1.1 percentage points, the lowest since 2007.

Among them,

The growth rate of retail sales reached 10.9%, and the growth rate dropped by 0.7 percentage points, the lowest in recent years.

The continuous growth of labor and raw material costs and welfare costs also hamper the rapid development of the industry and lead to the pfer of product orders to Southeast Asia.

Take Nike as an example. In 2014, its purchase volume in China dropped from 40% to 30%, while COACH's purchase volume dropped from 100% to 10%.

The China Leather Association's 1~2 month economic performance data showed that in the first two months, China's leather industry sales revenue was 175 billion 40 million yuan, up 8.2% over the same period last year, and its profit was 10 billion 830 million yuan, an increase of 11.8% compared with the same period last year. The growth rate dropped by 2.6 and 2.5 percentage points respectively; exports 15 billion 580 million U. S. dollars, an increase of 18.3% over the previous year; imports 1 billion 350 million dollars, an increase of 5.1% over the same period, and the growth rate slowed down by 12.7 percentage points.

Su Chaoying, chairman of China Leather Association, concluded that according to the economic performance of the industry in 2014 and 1~2 this year, the development of leather industry in China is still facing many problems, especially in the market trend.

With the pressure of environmental protection, high import tariffs and serious homogenization of products, it is necessary for the whole industry to intensify innovation and solve problems through structural adjustment, quality improvement, efficiency enhancement and brand influence.

It is learnt that next step is China.

The guild will focus on the development of the industry, and guide enterprises to strengthen innovation in technology, design, management and marketing, and constantly improve product quality and core competitiveness.

At the same time, in the face of the new environmental protection law and the "water pollution control action plan" that has been promulgated and implemented, it is urged that enterprises should vigorously promote cleaner production, pay attention to energy conservation and emission reduction, and increase the management of ecological leather management, so as to accelerate the pformation and upgrading of the whole industry and enter the road of quality and efficiency development as soon as possible.