The Soaring Cost Of Shoemaking Enterprises Is Not A Solution.

When Foxconn staff jumped the building incident, Foxconn insiders disclosed the news that Foxconn wanted to move inland on a large scale. Its plan involves the production line of 2/3 in the Foxconn Shenzhen plant, and the staff in the coastal area will also be reduced from 400 thousand to 100 thousand.

The July heat roasted the economically developed coastal areas of China, baking the belief that the global electronics foundries giant Foxconn moved inland.

On the evening of July 5th, Terry Gou, chairman of Hon Hai group, visited Foxconn base in Longhua, Shenzhen, to mobilize the staff to move.

Subsequently, in the news of Foxconn moving vigorously to Chengdu, Wuhan, Zhengzhou, Chongqing, Tianjin and other places, we heard the massive move of Foxconn, which was strong and powerful.

As the largest and fastest growing professional manufacturer in the field of 3C OEM, Foxconn has always been the direction of China's manufacturing industry.

The shoe companies are subject to rising wages, the appreciation of the RMB exchange rate, the cost of shoemaking enterprises soar, and companies are emulating Foxconn to reduce production costs by moving inland.

Labor shortage forced shoe enterprises to move

China's shoes city, Wenzhou, has become the most important leather shoes manufacturing base in China by virtue of the brand and output of leather shoes enterprises. There are more than 1000 shoemaking production lines, including three leading leather shoes in China, including Gilda, and 20 leather shoes enterprises with annual output value exceeding 100 million yuan in Wenzhou. Among the top 30 sales of key leather enterprises in China, Wenzhou enterprises account for more than 70%, almost half of the whole country.

The same thing with Foxconn is that many Wenzhou enterprises are famous foundries abroad.

With the advent of "shortage of migrant workers", we have encountered unprecedented difficulties, and some deep-seated problems within enterprises have also emerged.

Chen Xiaoming, chairman of Jiahe shoes group, is busy planning to invest and build factories in Ganzhou, Jiangxi.

As a foundry enterprise, his factory has been losing money almost every month since 2008.

Compared with the coastal areas, labor costs in the mainland can not be too cheap.

"There is basically no profit this year."

Hong Qihui, the honorary president of Hongkong SME Association, has a garment processing enterprise in Dongguan, Guangdong.

In April of this year, he also chose to invest and build factories in Hunan and Chenzhou to pfer some capacity.

"Although Guangdong has been talking about" cage changing birds ", most companies chose to wait and see in the past few years.

Hong Qihui said, unexpectedly, there was a serious labor shortage in Dongguan earlier this year.

More and more new generation of migrant workers can not tolerate repeated monotonous work and life, and the old employees have returned to the mainland to get married and have children, so they do not want to leave their home again.

Therefore, the factory can only be moved to their "doorstep".

Another reason for moving inland is that business in Europe and the United States is becoming more and more difficult. Wages in the mainland are generally rising. He believes that the main battleground in the future will be the domestic market.

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Land cost is the biggest temptation

How much can the cost of coastal foundry shoe enterprises move to the mainland?

Liu Weidong, Deputy Secretary General of Shenzhen Leather Industry Association, said that there are at least 10% to 15%, which is quite attractive to OEM enterprises.

He pointed out that the "raise tide" has nothing to do with the relocation of leather industry enterprises.

As a traditional labor-intensive industry, the hard cost of leather industry is very high, and it began to move inland very early and continues to this day.

Wang Jun, Dean of the Academy of Social Sciences, Zhongshan University, believes that the promotion of land prices is the main factor in the pfer of industries.

Although Guangdong has long proposed upgrading the industry, the gap between the land price and the mainland is not particularly large, and the motivation for shoe enterprises to migrate is not strong enough.

After the financial crisis, the premium of the first tier cities brought by excess liquidity brought crowding out effect on the manufacturing shoe enterprises with large demand for land.

Transportation cost increase

A sporting goods exporter who recently moved from Suzhou to Suqian, Jiangsu Province, told the reporter that the pport cost of the box with a gross weight of 20 tons before Suzhou to Shanghai port was 1000~1500 yuan.

After moving to Suqian, the cost will be increased by 400~500 yuan, and pportation cost will rise by 30% to 40%.

As far away from the supporting industrial clusters, the hidden costs of the moving enterprises are rising.

The staff of the Dongguan Footwear Association once said: "in shoe factories in Dongguan, it takes less than a week to complete the process from equipment procurement, raw material procurement to recruitment preparation."

But after many shoe factories move to the mainland, the imperfections of the nearby industrial chain will greatly lengthen this cycle.

There is no doubt that at present, the situation of the external environment is severe, and many shoe enterprises engaged in low end manufacturing industry have been cut off, and shoe merchants need to increase their R & D efforts and develop their own brand products.

More importantly, we should follow the low-carbon economy and circular economy, and strictly limit the high polluting products.

Shoe companies must keep pace with the times, aim at market demand and increase investment in innovation so as to base their core products on the market.

And not just follow suit.