Guangdong Shoes profits shrink, the industry does not appear rebound

“Guangdong annual production of 4.5 billion pairs of shoes , accounting for nearly 50 % of the share ; annual exports of 3.5 billion pairs , accounting for 70% of total exports .” Guangdong Leather Association of Guangdong Wang Jianxin so described in shoe manufacturing in the country position lies. However, the 2008 financial crisis, ” Guangdong” mode already be a great challenge . According to its disclosure , the annual export volume of Guangdong shoe peak had up to 1.1 billion pairs , but now only 700 million pairs , industry profits also greatly shrink profit margins from its peak of 20% down to remaining 5%. In this context , local enterprises in Guangdong has been quietly hidden behind from the previous content with doing OEM to send pushing its own brand transformation. However, was placed on the table a few brands , Jinjiang faction, Wenzhou faction already in the brand on the road to lose ground in the background, local enterprises in Guangdong transformation of the way this looks fairly difficult.

     Guangdong Shoes heavily dependent on international markets

      Guangdong ‘s position in the national footwear unparalleled . In Heshan Footwear Association 13th anniversary ceremony, Wang Jianxin introduction, there are more than 8,000 shoe factories in Guangdong , producing 4.5 billion pairs annually , accounting for nearly 50% of the national market share. Annual exports of 3.5 billion pairs of shoes , accounting for 70% of total exports .

       In Wang Jianxin view, such a huge industry, mainly concentrated in the Pearl River Delta, Guangzhou, Dongguan , Shenzhen, Huizhou East , Cape York, Jieyang , Chaozhou . “One of the Heshan high-end men’s leather -based, locally more than 1,000 shoe factories , the annual output of 80 million pairs , the price is relatively high, the output value of nearly 10 billion annually , accounting for 15% of GDP , Hezhou ; Huidong shoes is to Lord, although there are 600 million pairs per year yield, but lower unit price . ” Wang Jianxin said that .

      “Fashion , good quality, improve the industrial chain .” In Wang Jianxin opinion, this is the advantage of Guangdong Shoes . If it is not 2008 the arrival of the global financial crisis , or a growth of Guangdong Shoes or paradise , but from four years ago, this trade advantage of this once they became a burden.

      “Guangdong shoe heavily dependent on international markets .” Wang Jianxin said that although the development of Guangdong Shoes steady this year , but exports is declining . ” International consumer market downturn , orders fell by 20% – 30% .” Wang Jianxin said that in the best of times, Guangdong exported annually up to 1.1 billion pairs of shoes , but now the remaining 700 million pairs .

      Who is also president of Heshan Shoes and China General Chamber of Commerce chairman Shi Zhijian Leader Shoes Co., Ltd. of Guangdong shoe dilemma in the international market is now emotionally . ” RMB appreciation to the footwear industry in Guangdong, the export competitiveness is being undermined .” Vietnam and India , highlighting the advantages of cost , the same $ 100 , apparently in Vietnam and India, sourcing from China market purchases than an advantage .

     Profits shrink industry rebound is not now

      On the one hand , the Guangdong footwear export market dealt a heavy blow on the other hand the industry is also facing another challenge — costs. “In the past , when the market is good pair of shoes net profit was up 30 yuan , but now with the staff costs, raw material costs are rising , profit margins have been greatly compressed .” A familiar industry professionals shoe market in Guangdong so that two years ago because of recruitment difficulties , staff wages increase was as high as 20%, although the growth rate is now down to about 10%, but overall personnel costs will continue to rise .

     In this regard, Wang Jianxin admits , the new ” Labor Law” enacted, rising labor costs , before the company ‘s profits may have 20% , and now the industry average is only about 5%.

      For this amount of profit decline in the situation , the industry professionals admits that the current industry not seen signs of recovery even more difficult than last year reflecting the enterprise . “One is not a fundamental improvement in U.S. and European markets , on the other hand the cost of business still rising .”

      This contraction is not only reflected in the profit of local businesses who rely on exports , even the road of the brand ‘s local enterprises also suffered a huge impact. As a leading shoe also spared Belle , Belle reporter access to the 2012 Annual Report has learned that 2012 Belle sales of 32.86 billion Hong Kong dollars, an increase of 13.5% , which is listed on Belle first time exceeded 30 billion since mark. However, only a slight increase its operating profit 2.6% to 5.403 billion yuan , the growth rate for the past five years, the slowest of the year. 2012 sales of the footwear business scale 21.045 billion yuan , an increase of 13.6 % over the previous two years, about 25% of the increase is slowing down . Result margin decreased by more than 1 percentage point. The first half of this year , despite the renewed Belle sales growth of 11.1 %, but the profit is not increased but decreased , down 1.9%. “The market environment is generally lower than expected , consumer confidence in the doldrums, April abnormally cool weather , spring bird flu epidemic in some areas further exacerbating the pressure on retailers .” This is the Belle of the current environment shoe description .

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