How Does The Footwear Industry In Pearl River Delta Adjust The Brand Business?

An insider who contacted the ZARA generation factory told reporters that at present, the Pearl River Delta shoes, clothing and other representative factories are becoming increasingly difficult. He learned that a Taiwanese manufacturer for ZARA OEM shoes had four factories in Dongguan, Guangdong, with a total of more than 10 thousand workers. Now the two factories have been shut down, and the factory has been compressed to 2000~3000 people. Before the Taiwanese businessman had a factory in Zhongshan, Guangdong, it had been sold off at about 18000000 yuan a while ago.

"

Now the shortage of workers is still serious, many skilled veteran workers have returned to their old home, while young workers are far less efficient and responsible than before, but the cost of labor is rising every year. Moreover, the price of raw materials is rising, but the wages of workers have risen by 15%~20%, and their profits have fallen by 10%~20%.

Retail business is generally much poorer this year. Many buyers are buying a little bit, which also increases the manufacturing cost and manufacturing difficulty of the factory. "

Footwear manufacturing wholesaler Wang Li said in an interview with reporters.

Manufacture

The rapid expansion of store opening and the increase in prices have led to an increase in inventories and a decline in gross margins. As well as the rapid rise of online shopping, price competition has intensified, making traditional industries face challenges again.

A number of listed women's shoes enterprises suffered a net profit in Waterloo. As of the first half of June 30, 2014, the turnover of famous women's shoes brand Daphne fell 1.7% to HK $5 billion 80 million 700 thousand, gross profit fell 4.9% to HK $2 billion 865 million 500 thousand, and net profit dropped 46.6% from a year earlier, down from HK $450 million 500 thousand to HK $240 million 700 thousand in the same period last year.

In recent years, many garment and shoemaking enterprises have pferred factories to Asian countries such as Kampuchea, Bangladesh and Vietnam.

In some fast fashion brands such as ZARA, H&M, UNIQLO and other brand stores, reporters also saw a decline in the proportion of Chinese made products, and more and more products from other Asian countries.

However, compared with the current manufacturing costs in the PRD, the increase in manufacturing costs in Southeast Asia is also faster than that.

In Kampuchea, the wages of workers almost doubled in a year.

At the end of last year, Kampuchea opposition party chairman Sanglanxi appealed to Kampuchea workers to strike a strike for raising basic wages, and the Kampuchea shoe making and shoemaking plant was completely shut down.

After that, many shoe factories and garment factories promised to raise workers' monthly salary from 80 dollars to 100 dollars in February 1st this year.

However, the pace of salary increase has not stopped. Kampuchea's garment foundry workers recently asked for the minimum wage to rise from the current 100 US dollars / month to 177 US dollars / month.

Li Peng, secretary-general of the Asia Footwear Association, said that despite the low salary base of these countries, such a rise would make it difficult for many brands to digest, and the cost of the increase would be pmitted to the retail terminal.

When brand profits are under pressure,

The days are even more difficult.

An industry insider told reporters that in the past few years, some good foundry factories have undergone varying degrees of changes this year. Because of the low profit margins of manufacturers, some choose to close factories and turn to other industries, and the footwear industry is more and more difficult to sustain the increasing labor costs.

Unless the enterprise has its own brand and channel, the situation is relatively good, and some pure foundry manufacturers, the economic benefits go from bad to worse.

Li Peng told media interviews that in recent years, with the rapid increase in manufacturing costs in the PRD, ZARA and other fast fashion brands and Nike and other sports brands have gradually shifted their orders to other Asian countries or regions. Some manufacturers have been pferring the production line to the needs of brands and buyers.

But wages in Southeast Asia are also rising rapidly. For example, wages in some factories in Jakarta, Indonesia are close to that in the PRD, while Vietnam, Kampuchea and other countries are not very stable, and workers strike from time to time.

At present, manufacturers, traders, brands and so on are in a confused stage, especially in the next step of manufacturing.

In addition, the rise of the Internet has made global prices more pparent, increasing the price of brand retailers and increasing profit margins.

"Foundry profits are very low, even if there is no money to earn, these manufacturers are willing to receive orders from brands.

At present, because of the terminal consumption at home and abroad, some non brand buyers are in arrears with the manufacturers' payment, and the manufacturers are in arrears with the payment of the materials suppliers. The triangle debts are becoming more and more serious.

At the same time, factories in the Pearl River delta still find it difficult to recruit workers. The monthly salary of factory workers is about 2800~3000 yuan, while the small factories are 4000~5000 yuan, and manufacturing links are facing unprecedented difficulties.

Li Peng said that the pfer of enterprises to Southeast Asia is also facing some problems, the PRD manufacturing costs continue to rise, and at the same time, production support, technology and other aspects have also been very good accumulation, and Southeast Asian countries manufacturing costs have risen sharply, so that buyers and brands are somewhat unprepared.

However, although footwear and other industries are now being tested, there are still rigid demands in the market. Many enterprises are adjusting their strategies to keep pace with the changes of the times. The whole industry chain is undergoing some changes.

In the Pearl River Delta region such as Dongguan, some large factories have gradually introduced advanced equipment to improve automation level. Although the initial investment is large, it is one of the most effective ways to alleviate the shortage of migrant workers.

The brand is adjusted more by channels, trying to find new growth points by developing online business.