Pearl River Delta Footwear Industry Faces A New Round Of High Cost Shuffle

" Order shortage "Foundry enterprises in Pearl River Delta are experiencing unprecedented pressure. "In the past 11 and December, after the Christmas order was shipped, the factories were in hot pursuit of the world to make moulds, making preparations for the production of new orders for second years, but almost no new orders could be seen this year, and the replenishment of old orders also depends on the European and American markets. Christmas Festival sales. " Xue Xiaowei, director of Shenzhen Guanlan Bao de toy factory, an international toy brand MATTEL OEM.

In the past, factories in the PRD had to rush to work for Christmas orders, but this year, some orders were not collected. Statistics released by Guangdong Customs on 2011 1~11 foreign trade statistics show that since the second half of this year, the growth of import and export of processing trade in Guangdong has been decreasing month by month, and the growth rate of processing trade exports has dropped from 18.4% in June to negative growth in November. The growth rate of major markets has slowed down in the second half of the year, for example, the growth rate of imports and exports of the top 3 trading partners of China, Hongkong, the United States and the European Union fell by 17.3%, 8.2% and 4.4% respectively, compared with the first half of this year. The second half is the concentrated delivery date of Christmas orders.

In the view of the industry, the decline in orders due to the depressed market economy in Europe and the United States, coupled with the gradual loss of the low cost advantage of China's manufacturing industry itself, has resulted in the spanfer of a large number of low-end orders, and the factories in the PRD may encounter serious orders shortage in the future, and enterprises will also face a turn. Shuffle the cards 。

　 Footwear industry Order Sudden decrease

"The main problem of enterprises now is less orders." Li Peng, Secretary General of the footwear association of Asia, said that the traditional manufacturing industries such as clothing, shoes and so on are facing the problem of order shortage.

Hong Qihui, general manager of Dongguan run Tian clothing company and honorary president of Hongkong small and Medium Enterprises Association, said that in June and July this year, the order was not much. In October, after the Christmas order was shipped, the shortage of factory orders was directly reflected in the production. If some enterprises fail to start up, some small businesses fail because they have no single business to do. "There are orders at least to maintain the basic operation of the factory, and now there is no order to let enterprises fall into despair."

The current signs indicate that the order next year is not optimistic. "In the past, factories could replenish 3~4 new products every year, but this year we reported 4 new products to customers, and only one product was ordered." Xue Xiaowei said.

In the past year, after the Christmas order was shipped, the factories in the Pearl River Delta were in hot pursuit of the mould for next year's orders, so that they could be put into production after the end of the year. But this year's factory situation is that some factories have no orders, and some factories have the intention to get orders, but the preparatory work has been postponed since foreign buyers let the factory not do the previous mold work.

A large trader in Hongkong, Li Feng Group, who has made clothing purchases for the US market, has also sped up. "By the end of November, the orders we received were significantly reduced, and the volume of orders per order was not as large as before." {page_break}

Wu Bocheng, the general manager of Yiwu's Small Commodity City (600415, stock bar), also said, "now the number of long bills and large orders in the market has been greatly reduced. It used to be tens of thousands of dollars. Now it accounts for 10% of US $ten thousand and 90% of us $ten thousand. It used to be a half year and a year's list. Now it has only three months to half a year's list, which is quite difficult for our production organization."

The shrinkage of orders has made domestic factories more prudent in quotations. "At present, it is impossible to raise quotations in the absence of orders. We can not spanfer labor, raw materials and other costs to customers, and the profit margins of orders are continuously compressed." One industry insider said.

Hong Qihui believes that the situation facing enterprises is more serious than the financial crisis in 2008. "The last financial crisis broke out in the United States, and the US government quickly took measures. In 2009, the market began to pick up and orders gradually resumed. But this time there are serious debt problems in the two major markets in Europe and the United States. The industry is pessimistic that it is likely to recover in 3~4 years.

　　 Order at high cost spanfer

Another problem that can not be ignored is order spanfer.

"Recently MATTEL has gone to the Latin American market to find factories." Xue Xiaowei said, this will inevitably lead to the spanfer of toy orders. The MATTEL market in the US is the largest market for toys in the world.

In fact, a few years ago, the strategy of foreign buyers was not to put eggs in one basket. China was no longer the only buyer country. They began to train suppliers in Bangladesh and Kampuchea. Nowadays, the trend of order spanfer is very obvious.

"Before we have some suppliers in China, but because of the rising labor costs and raw material prices in recent years, our business has been spanferred to Bangladesh, Philippines, Indonesia and other countries this year. Almost all orders in the US market are like this. The above group of clothing purchasers of Li Feng Group said that his department was mainly supplied by super stores such as WAL-MART in the United States, focusing on medium products.

"In Bangladesh, the price of a garment can be controlled at $1.3, while at least 2 dollars in the country." He said the cost advantage of domestic factories is gradually losing. However, at present, toys and other industries with high technology orders remain in China, and factories in Southeast Asia cannot replace China.

In December 8th, at the third (2011) world footwear development forum held in Houjie, Dongguan, the China Leather Association made a report on the development of the world footwear industry and the Chinese footwear industry in the next five years. The report shows that the cost of China's shoe making industry is in great pressure after India and Vietnam.

"35% of the cost of an average product is labor costs, and the cost increases by 20%. The overall cost of the company will rise by about 7%, that is, the profit will drop by 7%. In recent years, the annual labor cost has risen at 20%~30%. Moreover, there is labor shortage in the PRD, and enterprises can only find people by raising wages. Hong Qihui said that the cost of labour in factories is under great pressure.