Dongguan Shoe Materials Move Towards The High-End Industrial Chain For Common Development

Statistics show that the GDP of Dongguan in 2013 was 541.1 billion yuan, with a growth rate of 9.7%, faster than the national provincial average“ the 12th Five-Year Plan ”The highest annual growth rate since. Dongguan Relevant officials believe that this is the "inflection point" of transformation and upgrading that Dongguan is expected to break at the expense of four years of development speed. As one of the five pillar industries in Dongguan, the clothing, shoes and hats manufacturing industry also ushered in a year of transformation and breakthrough in 2013. The research report shows that the clothing, shoes and hats manufacturing industry in Dongguan, including the footwear industry, was the third largest industry in Dongguan last year. From January to October last year, this industry accounted for 12.73% of the added value of industries above the designated size in the city.

In recent two years, more and more Dongguan shoemaking enterprise From low-end processing to high-end, most of the eliminated enterprises are low-end manufacturing enterprises. A survey shows that Dongguan's textile, clothing, shoes and hats manufacturing industry is gradually moving towards the high-end in the process of transformation. Some insiders said that during the transformation period of Dongguan in the last two years, most of the enterprises that fell were low-end shoe enterprises.

　 Both transformation and transfer

In Dongguan, the shoemaking industry centers on Houjie, Humen and Nancheng in the west and south of Dongguan, and there are also some scales in Gaobu, Liaobu and Shatian. Houjie Shoes is a provincial industrial cluster upgrading demonstration zone in Dongguan. In addition to the shoes manufacturing factory, it also gathers design, R&D and other service industries, as well as leather and other upstream raw material industries, forming a complete industrial chain cluster. Statistics show that from January to October this year, the textile, clothing, shoes and hats industry realized an added value of 21.979 billion yuan, with a cumulative year-on-year growth of 3.55%, accounting for 12.73% of the added value of industries above designated size in the city. In terms of scale, this industry is currently the third largest industry in Dongguan. In the 12th Five Year Plan of Dongguan, it was established as one of the five pillar industries of the city.

During the economic crisis of the previous two years, many shoe enterprises in Dongguan closed down. However, according to insiders, in Dongguan in the past two years, sometimes more than 100 shoe enterprises have closed down in one month, but nearly 200 more have been added. During the transformation and upgrading period, the shoe industry still has great opportunities.

Dongguan City Leather Shoes Chamber of Commerce President Wang Shengpei introduced that in the past two years, more and more shoemaking enterprises began to move from low-end processing to high-end. At present, most of the eliminated enterprises are low-end manufacturing enterprises. Although the real high-end enterprises have been impacted, most of them have been affected only to a limited extent unless individual business owners have mismanaged themselves. According to the preliminary statistics at the end of 2013, the export volume of Dongguan shoe industry has decreased, but the unit price has increased, and the final export volume is basically the same as that of 2012.

According to relevant people, the decrease in the export volume of shoes is mainly related to the high market inventory and also related to the transfer of enterprises. However, as the shoe industry moves towards the high-end, the export unit price has been increased.

In addition, according to Wang Shengpei, with the trend of "double transfer" of Guangdong's manufacturing industry, many shoe enterprises are also transferring. On the one hand, Dongguan's shoe enterprises are transferring to northern Guangdong, such as Shaoguan, and other places, as well as to traditional migrant workers from Hunan, Sichuan, Jiangxi and other regions. On the other hand, shoe enterprises also target Southeast Asia, Vietnam, Cambodia and other countries. According to incomplete statistics of the Asian Footwear Association, there are more than 40 Chinese shoe manufacturing enterprises transferred to Cambodia, more than 50% of which are Hong Kong and Taiwan funded enterprises, many of which are Taiwanese enterprises transferred from Dongguan. Some insiders estimate that the cost of shoe enterprises may be reduced by half two years ago after they transferred to Cambodia and other countries due to cheap labor and tax incentives.

In 2014, Shoe enterprise Industrial transfer, transformation and upgrading are still in progress. The transfer of Dongguan shoe enterprises is the transfer of processing links, not the transfer of the entire industrial chain. According to data, 70% of the global shoe industry's middle and high-end orders are distributed to all parts of the country for production after receiving orders in Dongguan.

Footwear materials move towards high-end

"From the perspective of development direction, Dongguan Shoes Materials Over the past two years, it is gradually moving towards the high-end. " Liu Guomin, Vice President of Dongguan Shoe Industry Chamber of Commerce, said that the continuous upgrading of Dongguan's shoe industry is also part of the upgrading of the entire Dongguan shoe industry chain. Liu Minmin, a native of Putian, Fujian, came to Dongguan to do business around 1994. At that time, Dongguan's shoe industry had just started, and the trade of leather and other raw materials matching shoes had not yet formed a scale. A group of Fujian businessmen, including Liu Guomin, and some Dongguan businessmen started to trade in leather and other shoe materials. Due to the limited production of leather such as cowhide in China, they began to import leather on a large scale from cattle producing areas such as the United States, Argentina and Australia. Subsequently, their business expanded with the expansion of Dongguan shoe industry, becoming a link in the complete industrial chain of Dongguan shoe industry. {page_break}

Liu Guomin introduced that at present, there are at least 2000 leather traders in Houjie, mainly for shoe making Leather raw materials . The same is cowhide, and the price varies with different grades. It is reported that the quality difference of leather is also reflected in the price. It is also cow leather. The wholesale price of low-end leather is less than 15 yuan per foot, while the wholesale price of high-end leather is 25-30 yuan per foot. Liu Guomin estimates that at present, about 70% of leather traders are gradually turning to high-end leather. He believes that the upgrading of shoe materials is driven by such factors as the upgrading of customers' requirements for shoe quality and the improvement of quality inspection standards of products in export destinations such as Europe and the United States.

Wang Zhaoliang, Executive Deputy Secretary General of Dongguan Leather Shoes Chamber of Commerce, introduced that the shoe industry is moving towards the high-end, which is closely related to high-end materials, new processes, new designs, etc., and raw materials are the first to bear the brunt. Wang Zhaoliang told reporters in Nandu that it generally requires 40 to 50 kinds of raw materials to make a pair of shoes. With the development of Dongguan's shoe industry, these upstream raw material industries have developed considerably in Dongguan, It will take at least one day to replenish the goods in Dongguan. In the case of a similar situation in the local factory in Dongguan, "you can send a salesperson to the street to get the goods, and it only takes one hour".

With the upgrading of manufacturing industry to high-end customization and lean production, the demand for high-end mechanical equipment is growing. Huang Jingguang, vice president of Dongguan Machinery Industry Association, also pointed out in an interview with reporters from Nandu that the consumption of high-end machine tools in China increased a lot in 2013 and has formed a major trend.

In terms of industrial scale, Dongguan has a complete set of industrial chains and obvious advantages in industrial clusters. Zhang Hong, Deputy General Manager of the World Footwear Headquarters Base, pointed out that 70% of the middle and high-end trade orders of the global shoe industry were distributed to all parts of the country for production after receiving orders in Dongguan, including orders from Zhejiang, Wenzhou and other enterprises.

2.5 The concept of industry+headquarters

On November 6 last year, The 5th World Footwear Development Forum It was held in Houjie, Dongguan. The forum gathered more than 700 insiders and insiders from 16 countries and regions around the world. Participants believed that China's manufacturing industry, including shoemaking, should extend its industrial chain. Some enterprises in Dongguan have embarked on the "2.5 industry road", which will be a major trend in the future. The so-called "2.5 industry" refers to the intermediate industry between the secondary industry and the tertiary industry, which not only has the functions of the tertiary industry management center such as service, trade and settlement, but also has the functions of the secondary industry operation such as unique research and development center, production center of core technology products and modern logistics operation service.

Wang Zhaoliang introduced that Dongguan shoe enterprises with a certain scale at present basically have their own R&D and design teams, which can improve products and upgrade designs according to customers' unique needs. At the same time, some enterprises with relatively strong strength also have considerable investment in research and development. In addition to improving the design level, many enterprises have also carried out research and development on the function of shoes.

In Houjie, Dongguan, including World Footwear Industry Base And Dongguan New Town Bank, Nanfeng International and other shoe material trade markets have been established. Most investors in these industries are entrepreneurs of shoe materials and shoe industry. According to insiders, they also invested capital in the footwear service industry at the opportunity of transformation of the footwear industry. Zhang Hong believes that it is impossible for the headquarters of Dongguan footwear industry to move to Southeast Asia and find a place to undertake the entire huge industrial chain. The concept of headquarters is the trend of Dongguan shoe industry. At present, the headquarters of many top industry chambers of commerce and associations in the world are located in Dongguan, and the R&D centers of many industry giants are also located in Dongguan. Dongguan will become a trading platform for the footwear industry in the future.

When the export of the shoe industry encountered difficulties, many shoe enterprises in Dongguan that originally only made exports also began to test the domestic market. The "factory store model" is the result of water testing. Last year, the first factory store of Dongguan Leather Shoes Association, Houjie Cross Japan Store, was officially opened, and its membership increased from 10 to more than 20. At present, the high-speed railway store in Humen, Dongguan, covers an area of 1200 square meters, doubling its size. These member enterprises were mostly engaged in export business before, and most of them had no experience in domestic sales. Wang Zhaoliang introduced that the emergence of factory stores can help member enterprises digest some of their inventory and save costs. At the same time, they do not need to bear the entrance fees, manpower and other costs when entering the factory stores. In the future, member enterprises will form a "brand alliance" to break the restriction of "individual combat" and jointly expand outward.

At the forum earlier, Lin Yifu, vice chairman of the All China Federation of Industry and Commerce, pointed out that domestic enterprises could consider going further, for example, to African countries where the current salary is only a quarter of Dongguan. However, Wang Shengpei introduced that most of the enterprises that really moved away were low-end shoemaking industries, or relatively low-end processes in shoemaking processes, such as shoe upper manufacturing.

Recently, many shoe enterprises even began to return to Dongguan, the shoe industry center. Wang Zhaoliang introduced that Southeast Asian countries have a big gap with China in terms of system, culture and worker quality. In addition, the political situation in some countries is not stable. Many enterprises are often "acclimatized" after transfer, and management costs and labor costs are also higher than before. Previously, an expert said that Wang Shengpei had considered transferring his shoe company to Southeast Asia. After his inspection, he found that the local workers' technical level was poor, and the working efficiency of skilled workers in Dongguan might be two to three times that of local workers.

Cooperation on the industrial chain

　　 Dongguan Footwear Industry Association Rector Peiji told reporters in Nandu that in Dongguan, cooperation among industrial chains for development is also a major trend of future development. Over the years of common development, enterprises in the upstream and downstream of the industrial chain and between the same industries have gradually formed a whole. Some enterprises have also developed together in the crisis to overcome difficulties.

Fan Weiji, only 26 years old this year, rented a shop with his brother in Houjie, Dongguan four years ago and opened a Wansheng leather company, which mainly deals in shoe materials and leather. Previously, Fan Weiji worked in Liu Guomin's leather trading company. As a fellow villager, Liu Guomin supported Fan Weiji's entrepreneurial idea, and provided him with supply and financial support when he started his own business. "The cake will only grow bigger and bigger," Liu Guomin said. He has helped many company employees to start their own businesses. As a foreign businessman, he has been doing business in Dongguan for many years. Although he was also viciously suppressed by some competitors, he did not care. On the contrary, he believes that only through common development and mutual support can we establish a better business order and promote the progress of the industry.

This situation also exists in shoe manufacturing enterprises. Wang Zhaoliang introduced that some shoemaking enterprises need to transfer the technological processes such as vamp. It happens that there are some old employees from Hunan, Sichuan and other provinces in the enterprise. The owners often support these old employees to go back to their hometown to start businesses, provide financial or equipment support, or cooperate to set up factories, or invest in hiring old employees as factory directors in local areas. Wang Zhaoliang said that these old employees know technology, and they often work as factory managers in Dongguan. They are also familiar with the local conditions of their hometown, and have advantages in managing the factory locally. "This actually gives employees a chance to start their own businesses." Wang Zhaoliang told reporters in Nandu that a large number of processed uppers have been sent every day from Sichuan, Hunan and other places in the past two years, and further processed into finished shoes after arriving in Dongguan.

In the past two years, we have met international economic crisis When the impact of, the different links of the industrial chain are often able to work together to face difficulties. Chen Zhilin, the person in charge of Dongguan Nanfeng International Trade Plaza, said that SKECH, a well-known American sports shoe company, had encountered capital chain problems last year and asked manufacturers in Dongguan to extend the payment collection time from the normal 30 days to 60 days. In the face of this situation, the upstream shoe material supplier also gave support, and also extended the payment time. In 2013, SKECH's sales in the United States increased significantly, and the corresponding orders also increased significantly. Liu Minmin said that in the long-term operation, all enterprises in the industrial chain can maintain good mutual trust, which is the basis for cooperation.