Wenling shoes industry, where is the future?

After an in-depth study of Wenling footwear industry, some experts said that as a production base for shoes with low mid-range footwear, the prospects for sustained growth in labor costs, raw material costs, and other factors will affect its prospects. Worrying.

Difficult to recruit in 2010

“It is difficult to recruit workers year after year. It is even more difficult for one year than one year.” In Wenling shoe industry, the first half of this year hit a record high of over 70,000 workers. In order to attract people, business owners have made any tricks, always a temporary solution.

It is difficult to recruit workers here, and companies are constantly expanding their production scale. Since entering the footwear manufacturing industry, the threshold is low. From 2001 to the present, the number of Wenling shoe factories has increased by an average of more than 300, which further exacerbated the recruitment difficulties.

Difficulties with recruiting are the increasing number of labor disputes and rising wages. In the first half of the year, there were more than one hundred labor disputes in Daxi Town. The monthly guaranteed salary increased from 900 yuan in 2008 to more than 1,500 yuan. The increase in cost has made it even more difficult for shoe companies with lower profit margins. Coupled with the rising shoe industry clusters in Henan, Hebei, Shandong and other places, there is a more obvious cost advantage than Wenling shoe industry. Where does the latter development go?

“Only managing to tap potential and improve the level of technology to increase per capita output value, this is the only way to cure this problem.” said Sheng Jianyong, chairman of Zhejiang Zhuo Ling Footwear Company Limited. Zhuo Ling Company has more than 1,100 employees in the first two years and is now reduced to more than 900. However, the annual output value remains the same, relying on these two measures. In recent years, Baoliite has reduced its staff by nearly 50%, but its annual production value has increased slightly. It is also relying on management to tap potential and improve the level of technology. Since Wenling shoe-managers are mostly from outside the country, they are inextricably linked to ordinary workers. At present, some shoe-making enterprises have introduced the practice of management's participation in shares, encouraging managers to stabilize the workforce. Sheng Jianyong believes that this management model is very likely to be popularized in Wenling shoe enterprises.

Not only that, some companies have also increased the adjustment of product structure. Zhejiang Noel Footwear Company launched a glove production project. Qijiang Footwear and Taiyuan Shoes broke through the artificial leather shoe manufacturing field and tried to produce leather shoes in order to increase per capita output value.

Customer-oriented and brand-oriented debate
"The shoes with similar quality, style, and comfort are sold in the thousands. Some of them only have tens of blocks." Pan Kecheng said, "The answer is two words: brand."

Pan Kecheng believes that the nature of labor-intensive industries determines that the ultimate competition in the footwear industry is not in technology, but in cost and brand. In accordance with this logic, brand management is the only way to save itself after Wen Ling’s footwear industry has become less costly.
The fact is far from simple.

As early as the 1990s, Wenling footwear industry put forward the development of brand management. More than ten years have passed. Although Wenling Shoes has emerged as a national export exempt enterprise (Bao Li Te), four well-known Chinese trademarks, four Zhejiang famous brand products, seven well-known trademarks in Zhejiang Province, but overall, Still showing a "small, low, scattered" pattern.

“Every industry has an agglomeration effect. Wenling shoes are mostly low-end shoes, and the customers who are attracted are customers who purchase low-end shoes. You suddenly do high-end shoes. First, there is no such technical atmosphere, and there are also few customers who purchase high-grade shoes. Come to you," said Sheng Jianyong. In 2006, a well-known shoe company Wenling launched leather shoes production projects. One year after this project did not come to an end, it was said that the reason was that the market was not good.

Zhuo Ling company is the chairman of Wenling shoe industry Chamber of Commerce, is also one of the leading companies in Wenling shoes, still honestly do OEM. “Corporate development must have a realistic orientation. We are not elites in brand development. What we can do is produce elites, do our own products, let more companies purchase your products, and then paste their brands.” Sheng Jianyong said.

However, there are many companies that challenge this idea. Since 2008, Qijiang, Taiyuan and other shoe companies launched leather shoes production projects one after another, and supply exceeds demand, and sales prices have continued to rise. With the production of leather shoes, why did the famous shoe company fail before, and Qijiang and Taiyuan would succeed? Pan Kecheng believes that this is mainly due to the timing issue: “In the past few years, companies have been trying to produce leather shoes, and they have gradually formed an agglomeration effect. It is easier for companies to launch leather shoes projects.”

At the same time, Fuor Long Company, which manufactures children's shoes, spent 5 million yuan to play brand advertisements and opened stores throughout the country. So far, there have been 7 products, and the products are in short supply. The retail price even sells for more than 100 yuan. "Why can you sell so expensive? Because the shoe materials used are all high-end, style design. The most important thing is that the product has initially formed a brand effect." Said Fu Fude, chairman of the company.

Shoe building bears the dream of upgrading
Those who pass Wenchang Road in Wenling City can see the majestic position of Wenling Shoes Building. The investment of 200 million yuan in high-rise buildings has now been completed and will be put into use at the latest next year. As the Wenling footwear R&D base and the headquarters of the Wenling shoe company, the office building has long been sold out, and Baoliite, Zhuo Ling and other shoe companies even swept the first floor.

It is worth mentioning that some shoe companies will also enter the shoe building. “We are upgrading together with the finished shoe manufacturers,” said the person in charge of the East Asia company. East Asia Corporation is one of the largest professional sole manufacturers in the country, and 80% of its products are sold to the Wenling market.

From the secondary rubber to PVC material, rubber and plastics synthesis, polyurethane, and finally to the EVA, the evolution of East Asian companies' sole material reflects the development of Wenling footwear. It is understood that East Asia's current EVA soles account for half of the company's total production. “This shows that EVA soles have become increasingly popular in Wenling, and indirectly reflects the pace of transformation and upgrading of Wenling footwear is accelerating.” The person in charge said.