Economic Cycle VS Orders Shrink: Where Is The Shoe Industry Going?

Sooner or later this day will come.

Rising labor costs, raw materials

China's small and medium-sized enterprises are faced with two basic choices today: first, they will become the accompanying products in the economic fluctuation, and the so-called associated products will grow up when the economic cycle is good, and they will die when the economic cycle is bad. Two, they choose to become a professional member, that is, to be a cooperative and supporting person in the global industrial chain, rather than a simple OEM.

At present, the problem of the shoe industry in China is that it is difficult for the enterprises to survive when the economic cycle is bad.

However, this also gives Chinese manufacturing enterprises a chance to rethink their own way out. This way should go to the cooperation of industrial chain instead of turning themselves into a parasitic industrial chain.

The so-called parasitism is that the enterprise will reduce itself to a simple product maker, only when the economic cycle is good, and the external orders can survive.

Therefore, at present, China's small and medium-sized enterprises have to split up a group of industrial chain partners, cooperate with large enterprises at home and abroad in the industrial chain, and achieve specialization and perfection in a certain part of the industrial chain, such as the road Foxconn traveled many years ago: Foxconn and Motorola, NOKIA, Samsung and so on, then the company grew step by step.

Some people in the industry said that when the financial crisis came, many enterprises in the PRD region were closed down. There will be many bankruptcies in the future, but those competitive and non bankrupt enterprises will concentrate the orders of the bankrupt enterprises, and the business will be better.

So at present, the Chinese shoemaking industry should study the smile curve, which tells us to do well in our competitiveness, including upstream research and development, design and downstream product promotion capabilities, channel control capabilities, etc., and then cooperate with neighboring enterprises on this basis and even allocate global resources.

At present, most of China's shoe manufacturing is concentrated on the manufacturing part of the smile curve, which has the lowest added value.

So this requires the bosses of the shoe industry to change their minds and not to confine themselves to the manufacturing system, but to the cooperation and service of the industrial chain.

In addition, China's domestic market is very large, but also to the OEM enterprises a good export.

In the case of shrinking overseas orders, turning to the domestic market is a major trend, including Li Feng Group also began to shift to the mainland market.

However, the current situation is that it is difficult for OEM enterprises to turn into domestic sales, and most of them are still at the stage of paying tuition fees.

However, Jiang Ruxiang believes that this is a stage that is bound to undergo in the process of enterprise pformation. The success rate of self built network for domestic market is very low, but the way to cooperate with domestic enterprises can be adopted, such as becoming a partner of domestic e-commerce platforms such as customers, and gradually opening the domestic market.