Terminal Brands Look Down On Orders From Dongguan Shoe Companies

After a group of colleagues fell behind the international financial crisis, the only remaining Guangdong shoe factory in Dongguan is ushering in the spring of production which is in short supply. Yesterday, reporters learned that, because of the abundant orders, many Dongguan shoe factories began raising orders prices by one to 20% in May. At present, the footwear brands in the domestic market generally say that the price of shoes will not rise because of the upstream price increase.

Recently, many overseas purchasers looking for shoes factories in Dongguan have found that almost all factories are raising prices. The price increases even reach 20%. The monthly salary of shoe factory workers has increased by about 40% compared to last year. The industry once said that every ten pairs of shoes produced in the world are made in Dongguan, Guangdong, and Dongguan is also known as the "world shoe capital". In fact, many shoe factories take into account both export and domestic sales, and with the promotion of the international financial crisis, more shoe factories have already joined the domestic sales team. At present, most of the footwear products in the domestic market and market are from Dongguan, Guangdong.

Reporters learned that, with the domestic economic situation warming faster than the international market, and the international financial crisis accelerated the reshuffle of Dongguan shoe factories, some shoe factories with weak risk tolerance have closed down. Most of the remaining shoe factories are "elite factories" co operating with well-known brands, which has resulted in many shoe factories' orders coming up this month.

However, after the cold winter Dongguan shoe factory ushered in the "spring" of orders, will the new products of footwear fall and winter enter the market at a high price? To this end, reporters yesterday visited the footwear brands in many shopping malls in the capital, including brands like Staccato, BELLE and hush pies, who said that the price increase of upstream shoe factories had limited impact on the prices of new products this autumn and winter.

A staff member of Baoxin (Chengdu) Trading Co., Ltd., which represents the market in Beijing, said that the price increase of upstream shoe factories will not affect the upcoming products.

And a BELLE brand's shopping guide also said that BELLE's products are made by fixed factories, and the factory price of products will not be increased arbitrarily. Even if Dongguan shoe factories generally raise order prices, BELLE's products will not be affected by their own pricing principles. In the interview, Staccato, Lies Dan, ARTMIS and many other brands also believe that the retail price of goods will not rise due to the increase in the price of the upstream orders.

For the famous footwear brands "do not raise their prices because of the rising order price", an industry insider has pointed out the mystery. Brand players enjoy the final pricing power of goods, so that the profit margins of footwear sales in terminal stores are very large. Even if the upstream factories increase the price of orders by 20%, and the workers' salaries increase by 40%, they will not affect the profit margins of brand businesses too much. This is why the price of new products in autumn and winter will not fluctuate greatly this year.

For example, a well-known brand of a female shoe priced at 499 yuan is taken as an example. The leather cost of this product is about 20 yuan, and the order price rises by 20%. The final factory price of the product will not exceed 30 yuan. The rise in the price of orders is very small compared with the profits of the brand.

In addition, in order to satisfy the customers' psychology of buying discounted products, they foreshadowed the "discount of new products" in the future, and raised the retail price of commodities year after year to become the "hidden rules" of some brands. A retail guide from Staccato told reporters that the retail price of some brands of the brand will increase every year, about 10%.