Profit Margins Have Eaten Up &Nbsp; Export Shoe Companies Are Besieged Everywhere.

The shift of coastal orders, or transfer to Southeast Asian countries, is no longer evident with demographic dividend and labor cost advantages. The shoe making pattern, which has been highly concentrated in China's coastal areas, is gradually diverting to Southeast Asia and other regions.

Reporters recently visited the 110th Canton Fair third phase exhibition and the fourteenth China Dongguan international shoe exhibition, shoe machine exhibition, shoe material exhibition, export shoe enterprises generally reflected that this year, raw material prices surged, the RMB continued to appreciate, labor costs rose substantially, shoe companies' profit margins were almost wiped out, and the international competition pressure increased, the global trade protection situation is still grim, and export shoe enterprises are besieged everywhere.

In fact, since the second half of this year, the export of footwear commodities in Guangdong has shown a sharp decline in the monthly growth rate.

According to customs statistics, the total export value of footwear in Guangdong this year was $1088766 in 1~9 months, an increase of 14.1% over the same period last year, but in September, the export volume was $111015, down 1.4% from the same period last year.

Cost embezzlement of export profits

A vicious circle of gold chains

"Compared with last year, the number of buyers visited at least half this year." Li Jin, sales manager of Chengdu hi tech Industrial Co., Ltd., who produces women's boots, told our reporter that the export market of the company was mainly distributed in Europe and central and South America. Li Jin said that there are many orders for old customers, while new customers are constrained by high prices. They just wait and see. They dare not rush their orders. Even some of the old customers have not yet digested their inventory, and the number of purchases this year is also decreasing.

It is reported that the total price of the shoes of these companies has increased by 10%~15% compared with last year, which is affected by the rising cost factors. Many customers can not accept the price increase. In order to keep the old customers, Li Jin said that only selling the shoes to old customers in a way of "small profits but quick turnover". He said the export of their women's boots now has less than 10% gross margins.

Zhu Zheng, a business manager of Zhejiang Taiji shoe industry Co., Ltd., which produces men's casual shoes, also told reporters that the new customers are hard to find in this Canton Fair, and new customers are even more conservative than before. According to Zhu Zhengshang, the price of its products is nearly 80% higher than that of six or seven years ago, but profits are constantly being compressed. Nowadays, the gross profit of each pair of shoes is only 5%~6%.

It is the rising cost of shoemaking that compresses the profits of China's shoemaking enterprises. According to customs data analysis, since the beginning of this year, prices of raw materials such as leather, rubber, plastics, chemical fiber and other raw materials have continued to rise. The price of domestic pig skin has risen from 40~50 yuan last year to 80~90 yuan, which has now exceeded 100 yuan mark. Other raw materials also rose, plus recruitment difficulties, the state adjustment of minimum wage standards and other factors, shoemaking industry labor costs rose by 20% to 30% on average. On the other hand, the RMB exchange rate continues to rise, further increasing the exchange loss of enterprises.

What is worse is the tight chain of funds caused by the slash of export profits of shoemaking enterprises, which has made the foundries and fabric suppliers fall into a vicious circle. Li Jin told reporters that small and medium-sized shoe companies are now under a lot of financial pressure. On the one hand, they often get only 30% of the total amount of money paid by the purchasers, but they need 60% of the funds to run the order, and the bank loans do not favor the small and medium enterprises, which leads to the abnormal pressure of their funds.

On the other hand, Li Jin said, material suppliers fear that shoemaking enterprises will not be able to take orders easily or raise the thresholds of new fabrics because of the fragmentation of capital chains because of the fragmentation of the capital chain, and raise the quantity of new fabrics. However, the small and medium sized shoe enterprises that are not well off can not afford to take a lot of orders, so they are forced to use the material stock of the material suppliers, which is a breach of the contract with the buyers and thus reduces the credibility of the export enterprises. "The current situation is really not conducive to small and medium-sized shoe enterprises, and see whether we can recover in the second half of next year." Li Jin said.

Answer: order transfer or domestic sale

Affected by cost pressures, export footwear companies located in the coastal areas of China are transferring part of their production bases to Southeast Asian countries such as Vietnam, Bangladesh and Indonesia, while the other part shifts to the central and western parts of the country.

Huang Shizhong, who is responsible for the production of sports shoes, Xiamen Jian FA Light Industry Co., Ltd., told reporters that three years ago, they had opened another shoe factory outside Fujian Jinjiang's shoe factory Zhejiang Wenling. Now, in order to control the cost and expand the regulation in the short term, the company has considered to locate factories in Jiangsu, Shandong, Yunnan, Chengdu, Jiangxi and so on. In the future, Jinjiang, Fujian will specialize in design and R & D centers.

"Moving east shoes to the West and moving south shoes to the north" is a trend in recent years. However, Huang Shizhong also reflects that the shoe companies are not mature now, because too much dispersion leads to the purchase of most raw materials, packaging materials, spare parts and so on from the coastal provinces. It is difficult to form a complete industrial chain, which needs to be developed and perfected.

In order to survive the debt crisis in Europe and the United States, many export shoe companies began to use "two legs to walk" - to expand domestic sales. At the shoe exhibition in Dongguan, Zhou Jie, the owner of the shoe export company, told reporters that they had been preparing for the domestic market for 3 years and did a lot of market research.

However, not all enterprises have such a "male spirit". Because the domestic export shoe enterprises had to get orders through foreign middlemen before, they carried out the export mode of OEM OEM, lacked their marketing channels, and it was not easy to take the road of "domestic sale". A company responsible for exporting dance shoes told the newspaper reporters that they had not thought about domestic sales. The main reason was that the domestic market was too complicated.