China'S Shoe Industry Urgently Needs To Break The OEM &Nbsp, And Build Its Own Brand.

Labour intensive and highly dependent on export

Wu Deguo, chairman of Chengdu's yemran shoe industry, has been a bit annoyed lately.

Since August, his US partner orders have shrunk by 60%, which is too bad for the company that produces OEM shoes and 80% of its products depend on exports.

Wu Deguo said, in Chengdu, the export system

Wu Deguo: about 30%, basically underemployment, or even stop production.

According to Su Chaoying, director of China Leather Association, in 2010, China produced 13 billion pairs of shoes and exported 10 billion pairs. The footwear industry is highly dependent on exports, and this year, the export of leather shoes dropped by seven or eight percentage points.

In addition to the shortage of orders, the bigger problem for shoemaking enterprises is that they can not recruit workers.

Profits are too thin and hard work, the footwear industry is losing its appeal, and workers begin to flow to other labor-intensive industries such as electronics.

Wu Deguo: workers are still missing. The statistics in the last two years probably lost 15%.

Recruitment in Sichuan, a labor-intensive place, is also bad.

While wages and prices of raw materials are rising, the price of factory orders remains at a low level.

Wu Germany calculated the profit of a shoe produced by his factory for only one dollar, and this shoe sold for three hundred or four hundred US dollars in Europe and America.

Zhang Huarong, chairman of Dongguan Huajian group, who also manufactures OEM shoes, pointed out that the long-term production mode of grabbing orders for OEM enterprises has led to vicious competition in excess capacity.

Zhang Huarong: we are very used to manufacturing enterprises. When orders are made, the price is cheaper and the scale is more. Foreigners are used to placing orders in China than the unit price. In order to survive in China, this mode of production is difficult. In fact, enterprises must have a mathematical model.

Wu Deguo, chairman of Chengdu's Yi pan LAN shoes industry, also believes that the development of independent brands is equivalent to being left behind.

Wu Deguo: when the economy is at peace, it seems that there is no risk; but when the economy fluctuates slightly, the first (damaged) is the OEM enterprise; because the OEM enterprises do not have their own terminals, your orders depend entirely on the market of others. When other markets are not good, your orders will be directly affected and the corners will be difficult to turn. This lesson is still very deep for us.

The footwear industry is now turning its attention to the domestic market, but the road to its own brand is not easy, at least it takes more than ten years to cultivate.

Su Chaoying, director of China Leather Association, said that the "12th Five-Year plan" of leather industry is the most important part of the pformation and extension of the footwear industry.

Su Chaoying: during the "12th Five-Year" period, we need to create 3-5 internationally renowned brands, and at the same time focus on supporting a number of brands with a certain scale and strength.