Shoe Enterprises Cost Rise, Orders Drop More Than 30%

In 2008, Zhang opened the Chengdu Xinlong shoe factory, focusing on export business. Although the shoe factory was not large, it also received some well-known international brands. "International brands like CL red shoes are exported," he told reporters.

Zhang said, but this year, orders received are less than 1/3 in the past, and labor costs are also increasing.

Orders fell by more than 30% this year.

Zhang's shoe factory is located in Jinhua town. The production workshop has an area of more than 1000 square meters, and its products are mainly exported to Australia, Japan, Korea and other countries.

Zhang said modestly, "we are only a small factory", but it also needs about 200 people.

This year, Zhang boss and his

Ushered in a huge challenge, Zhang told reporters frankly, "my order is less than 1/3 this year", that is to say, the shoe factory that can export 100 thousand pairs in the past year may not make 30 thousand pairs this year.

Zhang boss also said that although it is impossible to calculate the specific losses, the revenue is greatly reduced.

Yang Xiaoyong, general manager of another shoe factory in Jinhua Town, also said that the reduction of orders is not an individual case, "the whole industry is decreasing."

"Orders for shoes factories to export are generally reduced by more than 30%".

Huang Fuhao, general manager of the West shoe capital limited liability company, said that 60% of the more than 1000 shoemaking plants were export businesses, and more than 80% of shoe factories in export shoes factories had reduced orders by more than 30% this year.

Huang Fuhao said frankly, "compared with the past years, this has been a big decline".

The sharp reduction of orders has made the whole industry "riot". But Huang said that the environment is not good, and the decline in foreign demand will inevitably lead to a reduction in orders. The more than 1000 shoe factories are mostly in the middle position with high grade. "In the case of poor economic environment, this part of the manufacturers will be the most embarrassing."

Labor costs abroad are relatively low.

What is the reason for the "shrinking" of orders for domestic shoe factories? Manufacturers believe that labor costs are too high.

"The average wage of our ordinary workers is 3000~5000 yuan per month, even high enough to reach 7000~8000 yuan", while in Vietnam, India and other countries, the wages of local workers are only 20% of that in the country.

Yang Xiaoyong further revealed that in Vietnam, Indonesia and other places, the wages of 700~800 yuan were high.

His statement has also been approved by Huang Fuhao. "In the peak season, the wages of workers can reach 5000~6000 yuan, and many places in India may be hundreds of yuan."

"This year has increased by 10%~15%", Zhang boss told reporters that he paid an average of nearly 1000 yuan per worker, while more than 100 workers were waiting for Zhang boss.

Manufacturers believe that it is precisely because of rising domestic labor costs to raise the overall cost level, so that orders "in" Vietnam and other places, but for such a statement, there are also different voices.

Huang Fuhao believes that the cost of labor in Indonesia and other places is very low, but the technology of domestic workers is not comparable to those in these areas. If manufacturers choose these areas to produce products, they will face new problems such as building new production chains and training skilled workers.

Although the pfer of production chain will bring new costs, but Huang Fuhao also admitted that even so, the overall cost of the country is relatively high.

This problem has long been a commonplace for manufacturers. Since 2008, many manufacturers have begun to "secure second homes" and set up production workshops in areas with lower manpower and land costs around Sichuan, pferring part of the production tasks to the past.

But Huang Fuhao believes that the pfer needs the whole industry to "keep warm together" and put the new base ANN in the same place, "in order to form a climate".

Way out: "walking on two legs"

Unable to bear the cost of rising costs, some companies have already sacrificed.

According to Huang Fuhao, "heyday"

The profits of manufacturers can be maintained at more than 10%, and now the situation is that the average profit is kept within 5%. "The continuous compression of profit margins" has led many manufacturers to "concentrate on two purposes". Since 2008, many manufacturers have started other businesses. "These manufacturers account for 20%~30%".

Compared with those manufacturers who have "one heart and two uses", some of the manufacturers who are still struggling to maintain this year will finally "get out of the bitter sea".

Huang Fuhao introduced that some large scale manufacturers can reach 1 million pairs of sales annually, and this year they may only have a drop in sales. However, some small manufacturers may have to say goodbye to the industry in the case of rising costs and poor sales.

For this part of the small manufacturers, Huang Fuhao said, "we expect more this year."

Under the condition of poor environment, many enterprises are trying to cope with them.

According to the press, some manufacturers now have two production lines, on the one hand they produce their own brands, and on the other hand they take orders from other brands. "This year, such manufacturers will be better than manufacturers who do single OEM business," Huang said. This is enough to show that having their own brand is quite important.

"A pair of shoes can only be OEM production profits may be 5 yuan, and self production and self marketing profits may have 40~50 yuan," Huang Fuhao analogy.