How Should Export Shoe Enterprises Cope With Multi Party Pressure?

Over time, the central bank has decided to terminate the fact that the exchange rate between RMB and the US dollar is in fact linked, and focus on reference to a basket of currencies to enhance RMB exchange rate flexibility.

As the appreciation of RMB has squeezed the profit margins of export footwear enterprises in the southeast coastal areas in different degrees, how to maintain or even increase profits under the situation of weakening the advantage of cheap labor force is a difficult problem faced by every export company.

At this time, "East shoe westward shift" can solve this problem. Many smart and captive business owners are eager to go to the west to dig gold. Cheap labor and attractive preferential policies are deeply attracting the shoe companies.

Market demand in the Midwest

China's central and western regions have large population base, large and medium-sized cities everywhere, and have excellent potential for developing specialized markets.

However, the shoe market in the mainland has been mixed up for a long time. The product marketing is still in the wholesale era. There are a lot of shoes in the middle and low grades, and there is no brand enterprise that can play a leading role.

The development of the footwear industry is disadvantaged.

With the improvement of people's consumption level along with the door, this way of operation no longer meets people's requirements. People who are affluent become more and more aware of the quality and connotation of shoes.

Abundant labor resources in the Midwest

In coastal areas, labor costs have risen year by year. Many shoe companies have received orders but can not find workers. In the Midwest, the situation is completely the opposite. The Midwest is full of lots of idle labor resources, which is also an important factor in attracting coastal shoe enterprises to move inland.

Many coastal owners directly invest in shoes factories in the mainland, or under the control of Coastal Corp headquarters, establish a production, supply and marketing one-stop development system in the mainland, directly using local resources and reducing pportation costs. However, the incomplete industrial chain is also a very big problem, which plagued many coastal investors.

Cheap land prices in the Midwest

For the shoe companies moving inland, perhaps the low cost of land in the Midwest cities is the biggest temptation.

After a move to Jiangxi, a new sporting goods manufacturer named Si Microlab has reached about 600000 square meters, which is more than ten times the area of the old factory in Dongguan. Compared with the industrial land price of hundreds of thousands or even millions of acres per mu, the industrial land used by Microlab in Jiujiang is sold at a price of only 40 thousand yuan per mu.

Attractive policies in the Midwest

In order to attract investment and promote the development of local economy, some central and Western governments have thrown olive branches to the Eastern shoe enterprises, and a series of preferential policies have been introduced.

From tax relief to the expropriation of industrial land, or even the supply of human resources.

The products themselves are processed and pported in the western region. When the economic development of the western region reaches a certain level, they can even sell domestic products to the Middle East and Central Asia, and penetrate into their core areas through trade. This will also lay a solid foundation for diplomacy.

However, everything has two sides, and shoe companies are moving in the same way. In the process of migration, there are many problems perplexing shoe companies.

There is a gap in the skills of workers.

A shoe enterprise official said: "although the mainland labor resources are more abundant, but there is still a certain gap between the operation skills and the old workers."

Moreover, the local employees who work in their hometown have a strong desire to earn more money for overtime work.

"The size of our new plant is two times larger than that of the old plant, but the gap between the two plants is not big at last."

Therefore, even if the average wage of each worker falls, the final total cost of labor does not necessarily fall.

Transportation costs rise for shoe companies

Public investment in infrastructure in central and Western China is seriously inadequate.

It can be seen from the road map of China that the highway traffic lines in the eastern part of China and some central parts of the country are relatively dense. Most of the central and western parts of China are relatively scattered and have fewer routes. Especially in the western region, pportation conditions are obviously insufficient, and logistics costs have disadvantages.

In addition, the export profits of footwear industry occupy a large plate. Once the shoe companies move to the Midwest, the existing pportation costs and logistics conditions are undoubtedly enormous pressure.

Insiders pointed out that the increase in logistics costs, the overall cost of investment in shoe enterprises is still great, and the overall cost will not be much lower. There is still a certain gap between the advantages and competitiveness of other regions and Dongguan in the short term.

The mainland's industrial chain facilities are not complete.

Footwear enterprises in the southeast coast have formed a perfect industrial chain, and raw materials are also convenient, while the central cities should have a complete industrial chain for at least 7~8 years.

Huang Xiaoxiang, vice governor of Sichuan Province, recently led a team to Guangdong to hold an invitation to the investment fair. When interviewed by the media, he admitted that the shoemaking enterprises that had settled in Sichuan had reflected that although the cost of labor was 20% lower than that of the coastal areas, the raw materials and supporting facilities could basically be solved in the middle and lower reaches of the footwear enterprises producing low-end products. But for the shoe manufacturers who produced high-end products, the production cost would be increased due to the large raw materials and the matching radius.

Therefore, Li Peng, the Secretary General of the footwear association of Asia, predicts that the base camp of Taiwan funded shoe enterprises, such as Guangdong and Dongguan, will become a supply base for Taiwan funded enterprises in R & D, personnel training and raw materials, while the production base will move to the central cities.

Shoe manufacturers have built factories to the central and western regions that are less expensive than coastal areas, so as to alleviate the impact of factors such as labor shortage and land saturation.

China's world shoe factory is changing its cage to replace birds, moving the low value-added production links to the inland, and relying on its own R & D, trading platform and other advantages to build it into the shoe industry headquarters base.

It is this assumption that brings a lot of resistance to the dreams of the shoe cities in the Midwest.

This may lead the Midwest to repeat the old path of the east coast shoe base.