Crisis, Pformation, Opportunity, Wenzhou Shoe Enterprises Ten Years Survival

1. "Jiangnan leather factory" went bankrupt.

In August, micro-blog had a fever that had nothing to do with celebrity gossip, but also with entertainment: Divine Comedy.

It really closed down.

August 8th

A notice published in the 12 edition shows that

The manager of the limited company positively carries out the two and final distribution of the bankrupt property to the creditor of the company.

Many people know that the Wenzhou factory, which was bankrupt because the boss was in debt with his sister-in-law, had really existed, but the story was far less than the dog's blood in the song.

Huang Huang, the boss, is a real person. But there is no sister-in-law. He is actually walking along with his wife. After the factory closes, there is no such problem of arrears of wages, so there is no need to sell the factory's leather shoes to fill the deficit situation. The company finally relies on the sale of assets to repay the debts owed, while the total debt actually is about 230 million, and 350 million of the songs in the song are not small.

"This is the most common failure of Wenzhou enterprises," said encore, a customer manager of a commercial bank in Wenzhou.

He is a native of Wenzhou, but has no impression on the Jiangnan leather factory, which is famous throughout the country. "Jiangnan leather factory should not have many people in Wenzhou. You can say that the divine comedy is a bit of an impression on me. Which Wenzhou people do not have a few relatives and friends on the road? Especially in those two years, we see too much, everyone is used to it."

Those two years refer to around 2008.

Since then, the news of the bankruptcy of private enterprises in Wenzhou has become more and more.

In a report released in 2009 in Hangzhou net, Zhao Yide, the then mayor of Wenzhou, commended "2008".

"100 enterprises" conference revealed that since the financial crisis, "8.5% of SMEs in Wenzhou have gone bankrupt or converted to production".

The footwear industry is very important for Wenzhou's economy.

According to the data released by Wenzhou Statistical Bureau, from 2008 to 2017, the total output value of Wenzhou shoe leather industry can occupy more than 20% of Wenzhou's GDP.

Because of the large number of enterprises and the large number of Enterprises above Designated Size, the probability of thunderstorm is higher.

The bully group is the most cited example.

It was approved by the Zhejiang Provincial Bureau of Commerce and industry and the Wenzhou Municipal People's government to set up Zhejiang province.

The first enterprise group.

But in 2011, as the boss lost his debt, the factory suddenly broke down and disbanded.

In 2013, Jill, who once had the title of "China leather shoes king", announced that he had been in a difficult position for many years, and the capital chain situation was worrying. He needed to seek the government to come forward to the restructured company.

After this series of news shocks, the credibility of Wenzhou's enterprises has fallen to the bottom.

In terms of shoe enterprises, no one will ever remember the title of "shoe king". "Jiangnan leather factory" is the new term for Wenzhou shoe enterprises.

This is why hundreds of Sichuan businessmen in Sichuan will launch collective rights protection in 2013.

They gathered evidence to report to local industry and commerce, urban management, public security and other departments, and demanded to crack down on the way and behavior of "Jiangnan leather factory Divine Comedy recording" and so on.

"Ironically, Wenzhou people cherish their reputation most and are proud of their reputation. But over the years, you have said that I am the boss of Wenzhou and the Wenzhou company, and have become the most reputable people and enterprises.

"The two generation of shoes," said Xia Li.

Many businessmen in Wenzhou invariably set the "turning point" of entrepreneurship in 2008.

It was the best year they thought, but it did not become the beginning of a bad thing.

In 2008, the financial crisis swept the globe.

China's foreign trade export industry is not a small negative impact.

Take Wenzhou footwear industry as an example, according to Wenzhou customs statistics, in 2008, Wenzhou exported 528 million pairs of shoes together, down 1.4% from last year.

In the first two months of 2009, another group of data is still not optimistic, Wenzhou.

The total value of exports was 400 million US dollars, down 9.19% from the same period last year.

Many export oriented shoe enterprises in Wenzhou have turned to domestic sales.

However, according to the sales data of local shoe manufacturers in the first half of 2009, issued by the Wenzhou Municipal Taxation Bureau, the scale of domestic demand growth can not completely offset the income loss caused by the drop in external demand, and the sales revenue of Wenzhou shoe enterprises has dropped by 3.8% over the same period last year.

In such a situation, in November 2008, the State Council announced a series of fiscal stimulus plans with a total scale of about 4 trillion yuan, which is commonly known as the "four trillion rescue plan".

In addition, in order to increase financial support for economic growth, the credit limit of commercial banks has been abolished.

After graduating from college in 2012, he went to the bank and heard the troubles of his clients at the time.

And he is now very strict and careful in examining the qualification of customer loans, for fear that bad debts will affect performance differently. In 2008, customer managers only want to simplify the process of loan application as far as possible, because the amount of loans in hand is not enough to be a barrier to performance appraisal.

"At that time, the bosses in Wenzhou were all swollen, and every day the bank people asked for money to be sent to us." when he was in junior middle school, Xia Li started to help manage his family business. "If you have real estate, then the bank is a very good customer, and the loan is very easy. Even if you can't get the loan, it's okay. Just look for a guarantee."

Xia Li's father simply opened a Guarantee corporation with such an opportunity to provide guarantee business for the company that could not find a guarantee and need a loan, and earn money according to the proportion of the loan amount.

This is the sideline that many Wenzhou bosses were looking for for themselves at that time.

Another common situation is that businesses between friends and friends have secured each other.

Even if there is no guarantor or guarantee company in the private relationship, some client managers will help the lenders to complete the pairing in private.

At the same time, the cash flow level of many enterprises has reached a peak on the surface.

But many businesses have forgotten their loans, and the potential debt due to security has far exceeded their total assets.

What's more, with these loans, businesses usually only invest part of their business in the main business, and most of them will invest in "quick money".

Stocks, real estate and mining are the fat that Wenzhou bosses have long been looking at.

There is a tradition in investing in Wenzhou to earn money from industry.

It is an example of the Wenzhou ladies' real estate group who left their footprints in the north and even in Dubai.

And bully group entered the mineral industry with high profile before the collapse, and bought a mineral in Hezhou, Guangxi, with most of the liquidity of the enterprise.

"All this line knows it's not so good, and it's getting harder and harder to do, so everyone wants to find a way to get money."

Xu Qian said.

Like in the summer, Xu Qian is also a "two generation of shoes".

His parents started selling shoes in 1996, and later on agents, he gradually made the business of more than 20 provinces, opened more than 3000 brand stores, and built their own factories.

In his impression, until around 2000, the business at home was really good enough. Agents need to rely on robbing to get goods. Sometimes they encounter reduced prices to deal with inventory, and even "two different sizes of shoes get together."

The footwear industry in Wenzhou is a typical labor-intensive industry, with low technology threshold and low added value, relying on low labor costs and high output to form a scale effect, looking for profit margins.

In the first decade of reform and opening up, it was once a good gross margin industry.

But after entering the 2000, the market continued to pour into new competitors. Most enterprises had to rely on price war to survive, and gross margin declined significantly.

In the words of Xia Li, "when anyone can do this business, the era of sack bags is gone."

So, after making some money, Xu Qian's parents also made some investments.

But because of their conservative character, they only invested in some real estate projects.

They prefer not to touch on minerals that require higher capital strength, or higher risk stocks and futures.

"Now, I think my parents are doing the right thing. Caution is never wrong, just like they never guarantee others."

Xu Qian said.

But most of the Wenzhou people were very optimistic at that time, especially when they did not make any effort to get a large loan.

Xia Li gave a few examples to describe the atmosphere at that time, for example, many of his uncles and elders would spend tens of thousands of dollars to buy the license plates and mobile numbers with "888"; for example, he often followed his father to attend some banquet meals that he could spend tens of thousands of times; and in those meals, everyone talked about millions of businesses and tens of millions of businesses. Sometimes, a cup or two sentences could be made to talk about a fund raising project with hundreds of thousands of investment per person.

But gradually, the banquet is still the dining room, and investment opportunities are still hot topics on the table, but some old faces are no longer there, and they disappear together with the money thrown out.

"Later, you know that people are going to run and ask you for money. My dad says he sometimes feels, but what do I say? It seems that there is a kind of quack, that is, he knows that the money is gone, but people will still give it to him."

Xia Li's uncle was also a runaway boss. Before leaving, he also had to go several hundred thousand yuan to his father in the name of the joint venture project.

Whether mining or real estate, or stock market, agricultural products futures, these industries are fast and risky, including many uncertainties such as policy regulation.

Many enterprises have already suffered a great loss before they taste it.

Once the investment projects can not get the proceeds and principal as expected, they will not be able to repay loans from banks or institutions or borrow money from private capital.

This makes them sell their assets only, or else they will be pulled into the quagmire of the companies they secured.

In the wave, the Guarantee Corporation of Xia Li lost a lot of money and finally ended up.

Fortunately, his family and Xinjiang border trade export shoes business provides a stable cash flow, leaving a vital force.

Xu Qian's investment in real estate is fairly stable.

However, the partners who raised money together with his family were influenced by the policy of restricting the loan and speculation in the 2011, and encountered difficulties in the capital chain caused by the broken loan. Finally, they had to seek the pition of the private usury and had a debt on their backs.

The Wenzhou private lending market report released by Wenzhou central sub branch of the people's Bank of China shows that in 2011, the interest rate level of private lending in Wenzhou has exceeded the highest historical value. Even if it is borrowed from relatives and friends, the annual interest rate is between 12% and 36%.

Enterprises such as bully group are also in trouble.

Because of lack of management and operation experience, the mine business has been suspended, and the capital chain has been difficult to overcome.

And once borrowed the power of money, or for him to guarantee the institutions, businesses, individuals, as well as the upstream and downstream businesses with bully shoes business, and the company's employees, like the Domino dominoes, one by one, involuntarily "fall".

According to the papers written by Ye Qian, Zhejiang finance and economics university, "enterprise loan mutual guarantee, guarantee chain risk and its governance policy", based on the data cited in Wenzhou's research, nearly 80% of enterprises in Wenzhou cover mutual guarantee, 60% of which provide guarantee for 3 other enterprises, 30% of enterprises guarantee for 5 other enterprises, and some enterprises guarantee more than 10 enterprises.

Wenzhou has become one of the highest financial risk areas in the country.

Affected by the correlation, some enterprises in Hangzhou and Shanghai are also caught up in the guarantee chain dilemma.

In order to guide the resolution of the crisis, in the second half of 2011, Wen Jiabao, premier of the State Council, was then sent to Wenzhou by governor of the central bank Zhou Xiaochuan, Minister of finance Xie Xu and chairman of the China Banking Regulatory Commission Liu Mingkang.

After that, the Wenzhou municipal government organized Liaison Group stationed in 25 municipal banking institutions, requiring banks not to withdraw capital and not to lend money, so as to prevent SMEs from breaking up their capital chain.

However, a statistics from Wenzhou Banking Supervision Bureau showed that in early 2014, there were still 33 major risk guarantee circles in Wenzhou, involving 61 billion 800 million yuan in credit.

Six months later, the two data dropped to 28 and 50 billion 700 million yuan respectively.

In fact, the chain of guarantee is still affecting the Wenzhou enterprises.

In November 2013, due to the financial crisis and guarantee chain influence, its performance continued to slump, and the Wenzhou municipal government was included in the list of key enterprises to help solve difficulties.

In February 2017, the city of Wenzhou decided to start a pre reorganization of the JD's shoe industry because Jill was still unable to get out of trouble.

In May of the same year, the Wenzhou intermediate people's court registered the trade of Jill's shoes.

At present, the project of Jill's reorganization has been approved by the Chinese Academy of Sciences.

This is an attempt by the Wenzhou municipal government to solve the subsequent problems of the guarantee chain.

Prior to that, the Wenzhou municipal government also took the lead in setting up the Wenzhou credit guarantee fund operation center, and set up several funds, including small and micro enterprises credit guarantee fund, so that small businesses can not borrow collateral, do not seek guarantees, and can also borrow from banks.

"The loan is definitely much easier now than in those years, but our audit of capital use has become more stringent, which is now the most important audit item."

Encore said.

3. worries about pformation

Xie Rongfang, vice chairman of the China Leather Association and executive chairman of Wenzhou shoe leather industry association, used "severe cold" to describe the industry situation after 2008, especially before 2013.

Because in addition to the enterprises that are deeply involved in the guarantee chain, they are hard pressed to keep their own shoes.

And this is not the same as the competition intensified by local enterprises since the beginning of 2000.

At that time, the market cake belonging to the local brand is still growing rapidly.

According to the China Leather Association's "economic operation of the leather industry in 2012 and the outlook for 2013", the growth rate of China's leather industry slowed down in 2012, and the downward pressure increased. The output value, profit and export growth of leather industry dropped by 11, 19 and 17 percentage points respectively.

In 2011, the three growth rate exceeded 20%.

Xu Qian recalled that since 2012, the speed of home company's taking money from agents has slowed down obviously.

In the past, because of the rapid expansion of the market, Xu's parents agreed to take the goods on credit.

When the environment is booming, the problem of this mode is not easy to highlight.

But when the sales rate slowed down, sometimes the agents took money to make other investments and could not afford to pay for the goods. Then accounts receivable became meaningless figures on the books.

"It's too much to watch."

This forced the parents to change their mode of operation.

Previously, Xu was acting as an intermediary between factories and agents.

After the pformation, Xu Qian's parents became a brand manager who only grasped the resources of the brand, and directly contacted the factories and agents so as to pfer the pressure to the factory.

Xu Qian feels that this is a change that complies with the times.

At first, his parents were able to make middlemen, mainly because the information was not circulated in the early years, and they had the resources in both hands and channels.

But times are quite different now.

This adjustment will make Xu Qian's company need to establish a new absolute advantage.

In the words of Xu Qian, they want to provide a kind of service to make their company even if they do not act as intermediaries.

To this end, they began to provide agent recommendation services for factories, and to guarantee payment of goods.

For agents, they set up a free supply and verification warehousing system free of charge, while strengthening brand headquarters control, and providing the basis for subsequent sales data analysis and consulting services.

The process of actually implementing these services is longer than expected.

The factory is worried about its cash flow pressure and is reluctant to cooperate.

Greater resistance comes from agents.

Their worry is that their financial situation will be regulated, and it is totally a waste of time and effort.

Almost three years later, when Xu graduated from university and decided to go home to take over, this pformation was a preliminary achievement.

Xu Qian is the only child in his family.

As a "two generation of enterprises in Wenzhou", succession is no way out.

His parents had a lot of heart for his succession.

The pformation ahead is to relieve him of the pressure of work.

At the same time, the size of his factory is being deliberately reduced.

At present, Xu Qian's company only keeps a stable professional shoe factory.

"My parents are afraid that I will be too tired in the future, and the production is really too tired, and now the workers are hard to find and manage."

Xu Qian said.

Like other coastal cities in China, Wenzhou can create many economic miracles after its reform and opening up, mainly relying on the advantages of cheap labor.

But with the gradual growth of the first generation of workers, the labor force has turned to 80, 90, or even 00 after the higher standards of quality of life and salary.

The new generation of workers generally stress individuality, so it is difficult to obey management.

They have strong sense of right, so they are unwilling to work overtime. Even if they work overtime, they dare to ask the boss to pay 3 times overtime wages.

"Now many orders are not made for money, but still have to be answered, just to keep workers."

Said Xia Li.

After the bankruptcy of Guarantee Corporation, Xiali's business has shrunk.

The production line has been reduced from the original six or seven to the current "occasional, occasionally two".

Now the main points are the outward processing orders of the leading shoe enterprises, or the foreign trade orders for the African market.

Because he deals with wholesale customers rather than real sales terminals, his company can get limited profits.

The most important profit space needs to be controlled by controlling the wage cost of ordinary workers.

He said that the wages of skilled workers are relatively stable, and it has been eight thousand or nine thousand yuan, or even more than ten thousand yuan.

The average worker's salary is as long as one thousand or two thousand, and now two thousand or three thousand yuan is less.

This directly depressed the profits of each pair of shoes. Now, in general, a pair of shoes can only earn 3 yuan.

If a customer with high bargaining power is pressed down, the profits of a pair of shoes may be only 1 yuan.

What makes him headache is that today's workers are not wasting too much time in a less respectable and interesting job.

The position he offered may be just a springboard for the workers to enter the city or the pition in the two jobs.

This is even worse news for shoemaking factories that demand skilled skilled workers.

Because in the long run, the prospect of factory development is even more remote.

To some extent, the continuous improvement of laws and policies is also creating a series of new challenges for Wenzhou shoe companies accustomed to the barbaric growth pattern of early years.

On the one hand, the labor security system is gradually improving.

In the early years, the profit margin of the business owners who had been relying on less pension insurance was vanished.

Along with the escalation of environmental policies.

First, the new environmental protection law, which was formally implemented in 2015, is the foundation of the new environmental protection law, and the environmental protection tax imposed in 2018.

Wenzhou shoe enterprises are forced to upgrade and upgrade from raw materials, production links and plant construction.

All these changes need to be realized by means of investment.

"Every time I feel that my factory is going to make money, there will be new policies and regulations to push ahead. If we want to comply, it means spending a lot of money."

Said Xia Li.

Because of the low-end market, Xiali's shoes are mainly leather shoes.

The environmental policies promulgated by the state have great impact on leather material manufacturers.

The price of leather materials has increased.

So now, Xia also has to spend more money on materials.

This means that in addition to making the factory environmentally friendly, it also needs to indirectly share the environmental costs of upstream suppliers.

But he also felt lucky that at least his house signed a ten year lease could barely meet the standards.

A smaller factory, a family workshop, will be annoyed to find factories.

The original small factory may only need one rental housing to start production.

But now, they need to rent a regular factory building.

The demand for factories, especially small factories in Wenzhou, has increased sharply, and demand has increased.

"If in accordance with the actual situation, the enterprises are required to strictly implement the policies provided by the Municipal Environmental Protection Bureau and the District Environmental Protection Bureau, then almost 4921 of the footwear industry in Wenzhou will be closed if not on the industrial chain."

Xie Rongfang bluntly said, "as an association, we are making recommendations to the government on the one hand. Two, we should try our best to let enterprises first ignore profits and do well in environmental protection.

After the reorganization, if half of the enterprises survive, and the output value of the industry can still exceed 100 billion in the past, then the whole industry will really begin to develop healthfully.

4. shuffle time

China (Wenzhou) International leather, shoe material and shoe machine fair is the most important exhibition of Wenzhou shoe and leather enterprises every year.

Enterprises usually understand the latest trend of the industry, technological development trends, policy guidance and other information through exhibitions.

2018 is the twenty-third year of the exhibition.

According to the exhibitor Dana exhibition, compared with the past several sessions, the exhibitors of shoe machines and sewing machines in this exhibition have increased significantly, of which shoe machine enterprises account for 56%.

Chen Renyu is the shoe maker brand Ma Yazhou, the general manager of the company.

He has attended the exhibition for nine years in Wenzhou.

He feels that the shoe industry in Wenzhou has undergone great changes in recent years.

At first, if he wanted to introduce Wenzhou's boss to several million or even tens of millions of dollars selling shoes machines, only the super large enterprises like AOKANG and red dragonfly could be his goal, because other small businesses were not interested.

Now, he receives a lot of small businesses every day, even some companies that have no financial strength to buy their products.

"You can feel that they want to understand advanced technology and equipment, and want to know the future trend."

Chen Renyu said.

Chen Feiying, marketing manager of Shanghai Lian Tai Polytron Technologies Inc, has similar observations.

Lian Tai technology is a 3D printing machine. For shoe manufacturers, they can provide 3D printing soles and other solutions.

During the 3 days of the exhibition, she has been busy introducing 3D printing to Wenzhou's enterprises in the field of shoemaking.

However, she also admitted that there would be no direct ordering enterprises. She mainly established contacts through exhibitions, and did a good job in popularizing education in the market.

"They now know that they need to find new technologies, and know that these technologies can bring benefits in terms of efficiency, quality and cost," Chen Feiying said. "But a factory has to change equipment in one step, and most companies will change it one by one, one by one needs a process."

Xia Li agreed with Chen Feiying.

In order to improve production efficiency, improve product quality and increase the stability of quality, it also controls labor cost to a certain extent. His factory upgraded equipment very recently.

However, he only changed one of the machines.

For large enterprises with large capital strength, it is easier to buy machines.

The giant group, which is mainly based on OEM, launched the "machine replacement" plan within the enterprise.

Only in the typesetting and cutting links, giant one invested 6 million yuan RMB to import 6 automatic cutting machines from Italy.

According to the data released by giant group, the machine can save the time needed to develop and manufacture the die, thus saving the time of one link and the factory space of nearly 500 square meters. At the same time, the machine can automatically increase the material utilization rate by 5%-10% because of the automatic typesetting of the computer. It can also think that the factory will reduce the labor cost by 9, and the labor cost saved in one year will reach 550 thousand.

Such a small boss in Xiali should pay more attention.

The stability of capital chain is the most important.

So even if buying a machine of more than ten million yuan or even tens of thousands of dollars, it is prudent and prudent to decide the size of his factory now.

He and his father set the "two and a half back to Ben" as a yardstick standard.

The cost here includes not only the purchase price of machines, but also the cost of recruiting and training to meet the needs of new machines and technologies.

A new set of equipment often requires a new set of workers, or even a new management team.

Comparatively speaking, it is not easy for the management team to form and the management team to form.

Wenzhou enterprises have a distinct characteristic that they have always adopted the family management mode.

Just like the Xu Qian family, the father is the chairman of the board, and the mother holds the financial power of the company, and supervises every aspect of the company. It is necessary to seal her office stationery, and her aunt is also responsible for every aspect of the enterprise.

Such a pattern has played a lot of positive roles in the early years, including cost saving, ease of solidarity and reassurance.

But when enterprises want to pform and upgrade, kinship has become a major obstacle to enterprise pformation.

The two generation of succession should be a natural opportunity for enterprises to upgrade.

Moreover, most of the "two generation" in Wenzhou have been working hard in business school for many years to manage their knowledge so that they can pform their enterprises with modern management knowledge one day.

But in fact, when academics meet their elders, brothers and sisters, the results are always unsatisfactory.

Xu Qian bluntly said he had taken a bad job.

He found that although his company had a certain scale, but the company did not have a clear organizational structure, often a person is a number of jobs, and the position is random, power and responsibility is not clear, all matters still need to be supervised and supervised by the chairman.

"Some of the executives I had come to were shocked when they first entered the company. They could not believe that such a company could sell so many shoes a year."

The first thing he entered the company was to set up a new team with professional management knowledge and experience.

He also persuaded his father to set up a new department responsible for Retailing in the company.

He hopes to strengthen the brand awareness of the whole company and its agents through this department.

He thought AOKANG did a good job in brand management.

He looked forward to the day when his brand could also add value to the brand name.

But to do this, there is not enough marketing department and brand promotion department.

He also wants to reform the way of checking agents.

Originally, Xu Qian's father only checked the agent with the quantity of the purchase.

Xu Qian's idea is to replace sales with sales volume as an index, or at least a target of sales volume in addition to purchase volume.

But until now, his ideas were not approved by his father.

This is the business model that touches the core interests of the company, and the father is still unwilling to let go.

He knew that perhaps he could really change the problem until he really took the responsibility for himself.

"At this stage, a larger number of enterprises need to think about how to build up a new level."

Xie Rongfang said.

In the past two years, the Wenzhou shoe and leather industry association has set up a professional manager branch, and has also set up a "new generation of entrepreneurs" Sub Committee for the succession of enterprises, all aimed at assisting the shoe enterprises in need to achieve a higher level.

"Small businesses should not focus on their immediate interests, but work hard in terms of quality, environmental protection and characteristics.

In this way, we can live well even for large factories.

Xie Rongfang said.

Xie Rongfang acknowledges that it is hard to make another big brand and big company now. The industry has already entered the stage of strong Heng Qiang, weak weaker and strong and weak from 2012.

However, she pointed out that this must be a loose "annexation", "because everyone in Wenzhou wants to be a boss, even a small boss."

Xia Li should be Xie Rongfang's little boss who has to stand on his own feet in any case.

He still has ambitions.

He joked that he was waiting for the next opportunity for the company to take off.

Now that the domestic market is hard to do, he now puts his treasure on Moscow's market.

He wants to try to start selling the terminal channel in Moscow from Moscow.

He wants to start his own brand in Russia.

An uncle he had known for years had spent some years in Moscow and made some achievements.

This made him see hope.

"Fortunately, the factory should be able to rely on the Moscow market to open two more production lines."

He said this half of the sentence and smiled. "But if it doesn't work, it may be nothing."

A few hours later, Xia Li was going to board the Moscow plane.

This is the third time he has been there. He has already looked at the bunk.