Pearl River Delta Shoe Enterprises To Survive, Persist Or Give Up?

The "world factory" - the pronoun of the Pearl River Delta; the raw material processing, the majority of PRD factories.

Once, the production and marketing mode based on simple cost advantages made it easy for the Cantonese to rush ahead and get rich. Now, the profits brought by the "world factory" are shrinking, and the bosses of the processing enterprises suddenly realize that making money from foreigners is no longer easy.

If we do not change ourselves, we will be eliminated from the merciless market.

For this reason, many factories unwilling to migrate out of the field have begun to change their survival strategies: export + domestic sales.

Guangzhou Daily reported that Guangzhou's industrial town Panyu District.

Pak Chi diamond Co., Ltd. and Shi Lou Rui Hing shoe processing plant, two different products processing enterprises are facing the same problems: cost and exchange rate.

They began to look at themselves and start changing themselves.

However, it is not easy to take a light boat across the oceans.

The way to increase the cost of workers is: machine instead of human Bo Zhi diamond Co., Ltd. is the second largest diamond processing enterprise in China, with 2000 employees and a monthly output of more than 60 thousand carats of diamond blanks.

If you wear a diamond ring on a Hongkong jewelry brand, the diamond on the ring is likely to come from the factory.

Huang Chengwei, the chairman of the company, was born in Hongkong, and was an apprenticeship in the workshop. After the reform and opening up, he looked at the cheap comparative advantages of the labour force in the Pearl River Delta to build factories and succeeded at one stroke.

However, the main reason that attracted him to go to the mainland in the early days is now fading away.

He told reporters: "wages have risen rapidly in recent years, and recruitment is hard.

Especially after the entry into force of the labor contract law, the labor cost of the company has increased by at least 20%.

What should I do?

Huang Chengwei first thought of "mechanization". He racked his brains to find links that could replace workers with machinery. For example, he introduced the first laser diamond cutting machine in China, which effectively saved labor.

In his factory, from design to cutting, every effort should be made by computer and machine equipment unless necessary.

With regard to mechanization, Huang Chengwei has his set of enterprise management theory: "modern enterprises should not simply pursue gross output value, but pay more attention to per capita output value.

Mechanization is the shortcut to increase per capita output value.

We must ensure workers' statutory rest time, but machines do not use it, and it can run continuously for 24 hours.

Huang Chengwei's taste from mechanization is not only "efficiency" but also "quality".

He said that the quality of diamond products produced by mechanized production lines is much better than manual production.

At the just concluded "two sessions" in Panyu District, Panyu District district chief Luo Yufeng revealed that only more than 100 towns in Panyu had failed or moved away because of the labor contract law.

We can see how they are vulnerable to the increase in labor costs.

The survey found that Huang Chengwei's "mechanization" change may not be of universal significance in the PRD. The PRD factories mostly produce traditional necessities such as clothing and shoes, and the processing flow has been gradually finalized. Are there any further mechanization potentials in these industries?

In addition, can entrepreneurs, like Huang Chengwei, have enough capital reserves to spend money on expensive new technologies and equipment?

For others, the way to get married is to create a brand in the cracks, but the manufacturing industry in Pearl River Delta lacks its own brand, but behind the well-known brand products, there are often hidden behind one or two Pearl River Delta enterprises.

Many PRD factories are involved in the production and marketing of branded goods, but these brands do not belong to them.

Huang Chengwei's diamond processing factory provides diamond products for a jewellery brand in Hongkong. Another processing company, Shi Lou Rui Xing shoe processing plant, works for two or three European and American brands.

"The same pair of shoes can only be sold for us $18 If we sell them," said Du Qizhou, owner of Rui Xing shoe processing plant of Shi Lou. Once the customer is handed over to the customer, they can label the brand name of Italy, and the price will exceed US $80.

In fact, they are all the same goods. "

"We can only get a small slice of the profits from the brand.

Some international jewellery brands do not even have any production lines. They can sell high priced products around the world with their own trademarks.

Because they do not produce themselves, sometimes they even cause triangle debts.

Why is it so easy for them to earn money?

This is the strength of the brand! "

Huang Chengwei is clearly aware of this.

So they thought of their own brand.

Du Qizhou's Rui Xing shoe factory now has its own brand, but he has a cautious attitude towards the shoe factory's brand: "brand is not made in one or two days. Building a brand requires a lot of capital investment.

Many small and medium enterprises have been accustomed to the traditional processing of materials, and the change is very difficult.

Huang Chengwei registered a trademark of his own jewellery. He said: "the road of brand is very difficult.

In the end, only 1 of the 100 enterprises will be able to survive.

But the situation is forcing us not to take this road. Sooner or later, it is a dead end.

It's better to take this step earlier. "

The strategy of internal and external profit reduction is: export + domestic sales, in a sense, the impact of inflation on processing enterprises is more than that of ordinary citizens.

Business owners need not only to bear the pressure of rising labor costs, but also to endure the stimulation of raw material prices again and again.

Du Qizhou told me: "glue for the upper and sole of the shoe, a year ago, 50 yuan is enough; now it has risen to 150 yuan, a whole 3 times!"

Huang Chengwei disclosed: "over the past two years, the price of rough diamonds has risen by about 20%."

In dealing with brand enterprises, processing enterprises are often in a weak position in negotiations. The pressure of rising raw materials and labor costs is mostly borne by the processing enterprises at the bottom of the production chain.

Du Qizhou said with emotion, "our pressure is really great.

The appreciation of the renminbi, the processing of incoming dollars in US dollars, and the money that was originally able to enter the pocket was flying.

Customers will not raise the order price because of these objective factors.

They rush the goods very tight. In order to deliver the goods on time, we sometimes have to pport them by air.

Is this air pportation still worth losing? "

"The money of foreigners is not easy to earn". It is the imbalance of this paction status that has prompted some processing enterprises to focus on the mainland market and expect to be able to build their own doors someday.

"The crowd looked for her, but the man was in the shadow of the lights." a visit to Hong Kong surprised Huang Chengwei.

Huang Chengwei recalled: "when I went back to Hongkong, I passed the LV bag store, and the customers lined up long lines, all Chinese people!

For me, the expensive bag is not willing to buy, but the purchasing power of the mainland people is so strong! "

"There are only 7 million people in Hongkong. The citizens who bought the jewellery have already bought it.

There are 1 billion 300 million people on the mainland, and the mainland has a very small per capita possession of jewelry. If 1% of them buy jewelry, it will be terrible.

Authoritative data show that in terms of income level and consumption level, 150 million to 200 million of the population in mainland China has reached the level of affluence in Europe.

What a huge potential consumer group it is! "

Huang Chengwei said excitedly, "take the workers in our factory for example. The monthly income is only two thousand or three thousand yuan, but many of them buy necklaces and rings for their families."

The rich experience of foundry has made Panyu's jewelry manufacturers immerse themselves in the high quality design and quality requirements of European and American brands for a long time.

"We are producing in the mainland, then handed to the Hongkong brand dealers, and they are sold back to the mainland, and they are all in a circle. Why?"

Thus, Huang Chengwei opened a private brand store in the second tier cities of Shenyang and other mainland cities. The reason why he chose to start from the second tier cities was a business strategy consideration of "avoiding the real impact": the Hongkong jewelry brands in the coastal cities were not so influential in the mainland's second tier cities.

In fact, the Panyu District government has also realized this point. The area has built up a "Diamond Collection and purchasing center", and jewelry manufacturers, including Huang Chengwei, have set up direct selling outlets in the gathering area.

According to statistics, 60% of Hongkong's jewellery is produced in Panyu, and the direct selling of processing enterprises can minimize the link of profit distribution, making the products there have price advantage.

They looked at the whole Pearl River Delta.

It's hard to find a new way to make money. Sometimes, even if you work hard, you may not be able to thrive.

Du Qizhou is not optimistic about the future of the footwear industry. In his view, the glorious years of the labour intensive industries in the Pearl River Delta are not too fast nor too slow to pass away.

In this regard, Huang Chengwei, who has experienced the pition period of Hongkong's industry, is very calm: "this is a necessary stage for a country's economic development.

The situation in mainland China is very similar to that in Hongkong 20 years ago.

20 years ago, many processing enterprises in Hongkong moved to the mainland.

Du Qizhou said that his shoemaking factory is currently at the edge of "no profit or no loss", and he has not dared to continue to invest in shoe factories.

Du Qizhou's choice is to change careers.

Food was the main concern of the people. Last year, he invested in a Hunan restaurant, a Sichuan restaurant and a coffee cake shop in Shi Lou Town, Panyu District.

He said he had worked hard and planned to open up a number of chain stores in Panyu in the catering industry.

As for shoe factories, "take one step at a time".