The shoe factory relies on the electricity merchant, can walk how far?

At the beginning of the century in 2000, once top of China's footwear industry boss of the return force announced bankruptcy, in the eyes of the outside consternation, the curtain of industry collapse gradually opened. 12 years later, in Shanghai Jiading Big Hong Village on the Acer Shoes Factory, accompanied by the busy figure of the workshop and the air filled with the health of rubber taste, once any back to force factory Hu Qilong to the evening news reporter told the miserable encounter. including Shanghai rubber shoes factory to ten factories in Shanghai more than 40 shoe factory disappeared, now only 5 factories are still supporting. In the transition period, foreign trade encountered cold raw material prices of labor shortages and other attacks ensued, many factories are in worse condition. But the real shoe industry has been regarded as a scourge of e-commerce, but it has become a lifeline to survive.

Back to power failure

The Golden Age is gone

As the "Old Master" of Shanghai Footwear Industry, Hu Qilong's story starts from 1996.

At that time, domestic sports shoes brand back to power is at the zenith, intends to open a factory in Jiading Malu Big Hong Village, when the secretary of the Hu Qilong to contact, decided to provide land and water and electricity by the village, equipment and technology provided by the Force, each year to the big Hong Village fixed pay a profit. After the decision, the two sides in full swing ground, the newly completed plant soon into production, the benefit is good.

2000, a news to Hu Qilong and factory more than 300 employees were shocked: back to power factory bankrupt! Soon after, another shoe giant, the Qingdao double Star (000599, Stock bar), also vanished into the market as a myth.

In order to avoid hundreds of employees lost their jobs, Hu Qilong's big Acer branch decided to carry out joint-stock reform, became now on the Acer shoes, and he himself stepped as chairman.

Like Oberhon, many shoe factories in Shanghai were trying to transform, but they all faced brutal competition. Hu Qilong recalls that at that time, Shanghai's famous rubber shoes a factory to ten factories, are owned four or five lines of the state-owned manufacturers, but subsequently due to poor and successive exit history stage. There have been more than 40 large shoe factories all over Shanghai, and now there are only 5, and a smaller shoe factory has only two or three remaining in hardship.

Survival is not easy

Crisis on the road to transition

Hu Qilong recalls that before 2010, foreign trade orders were a source of great importance to all the families. Compared to the domestic labor lengthy capital circulation cycle, because most of the foreign trade is one-time, belonging to the "money to get the hand on the finish", basically back to the paragraph as long as 2 months. Manufacturers also do not need to be responsible for after-sales service, even if there are some substandard flaws, as long as the delivery can be mixed over on the line.

However, the subsequent downturn in the export environment of foreign trade, so many OEM shoe factory instant "Duanliang". A joint survey by Peking University and Alibaba showed that orders for small businesses in the Pearl River Delta region fell sharply from 2010, affected by the European debt crisis. In addition, Vietnam and India and other regional enterprises to join the order of low prices, domestic small enterprises have no room for a single low price grab.

Last year, China's exports of finished shoes grew at a low rate of 12 months, with exports growing by only 2.4% to 10.17 billion pairs, down 19.1% from 21.5% a year earlier, according to customs data.

After losing the order source, many shoe factories had to close the door to dismiss. and others try to build their own brand of shoe factory, most drubbing and return. Hu Qilong Frankly, in 2005 2006 years also made own brand, but do not make money. Compared to OEM, the cost of the channel cost of the own brand to promote the pressure in the factory, can only dispel the idea.

"Another reason is that Shanghai's shoe factory does not make a brand but Wenzhou businessman." Hu Qilong said that the Shanghai Shoes Factory is a vulcanized shoe predecessors, the quality of the higher requirements, and some Wenzhou shoe enterprise cost control is very strict, secretly cut corners in exchange for price advantage. Still, the days of Wenzhou shoe companies are equally sad. According to the report of the local industry Association of Wenzhou, from 2003 to 2008 in the 5 years, more than 2000 small and medium-sized shoe enterprises collectively disappeared.

Tighten your belt.

The cost of shoe factory is rising every year

In the macro production workshop, everywhere filled with the smell of rubber, a row of women in the light of the hand under the lights of the assembly of shoes, raw materials processing high-temperature disinfection, such as heavy work by men are carried down. These employees are less local, mostly from Anhui and Hunan and other in all directions, the annual salary of about 25,000 yuan. Because wages are no more competitive than services, their average monthly turnover rate is 10% to 15%.

Hu Qilong and son these days stay up to calculate a account, the result is very let ye both worry. Starting from April 1 this year, Shanghai will raise the minimum wage again, from 1280 yuan to 1450 yuan, so that this year, the macro labor costs will be more than 1.08 million yuan. At the same time, the rise of individuals to pay the minimum amount of Social Security Provident Fund, in the next five years, the shoe factory will also be for all foreign employees to pay more than 10% of the Social Security Fund, equal to pay more than 190 yuan per person. Based on the existing staff size of 500 people, it is also a $950,000 additional expenditure.

"More than 10 years, all walks of life in China are developing, but rubber shoes industry is still the same old, automation and mechanization is very low, seriously rely on manual." Hu Qilong told reporters, a pair of shoes from the procurement link began to go through more than 200 people's hands, employing costs no matter how careful to save.

In addition, the price of raw materials rose fast, also put a lot of shoes factory pressure to breath. "At the beginning of 2009, rubber price was 13,000 yuan per ton, the end of the year rose to 20,000 yuan, the highest peak reached 40,000 yuan, cotton prices in 2010 also rose 50%." Hu Qilong said with fear, coupled with labor shortage, even in Fujian, Guangdong and other footwear industry more developed cities, last year, there are many shoe factory closed down, fortunately his factory currently has from the United States, such as the special orders, such as Granville, still can hold.

Take refuge in the electrical business

OEM orders become life-saving straws

As the whole shoe industry declines, the survival of the macro is somewhat dramatic. They get the order, precisely from the traditional footwear industry as a scourge of e-commerce.

2010, because in the industry to do the reputation of vulcanized shoes is good, at that time advertising dozen streets and alleys where the Hu Qilong to talk about cooperation, but the latter has never heard of this online brand, the heart also straight to mutter.

"One open is 50,000 pairs of orders, I was not very believe that they are bragging, and embarrassed to face." Hu Qilong to reporters that he later ran to each other's Beijing headquarters to see several times, see the warehouse and call center, only to determine this is not a "big trick."

Hu Qilong did not know at that time, the other cities have more than 20 shoe factory volunteered for every customer to do the foundry, almost squeezed the head. And he is relying on the former back to power factory this piece of gold-plated, only inadvertently inserted Liu received orders.

The first cooperation with E-commerce process, in the words of Hu Qilong, is "a few days after a big fight." In the old master's view, the young company made a lot of "unreasonable demands". For example, the other side requirements of the "super glue" canvas shoes (that is, the soles and shoes in a circle of rubber band length exceeding the standard) must not exceed 2 mm, and on the macro at the time of the shoes required only 5 mm, can be closed with the eyes are able to brush.

In addition, "glue" (the soles can withstand a few kilograms of tension) was asked to do 3.5 kilograms, let him feel very surprised. "GB only 1.8 kg, before another famous brand asked me to do 2.5 kilograms, have been decisively rejected." Hu Qilong told reporters that he felt from the bottom of his heart that he had met a winded buyer.

Despite the tough, but Hu Qilong still optimistic to see that their shoes in the industry has a better reputation. "In the process of cooperation with E-commerce, each side is a learning and progress." He said that last year, every customer's foundry has accounted for 80% of the annual order, a total of 2.3 million pairs, the factory also achieved 115 million of sales. And with the Lok Amoy more Footwear e-commerce Web site rise, many on the verge of collapse of the shoe companies also caught a new lifeline.

"To live is to win." "A veteran shoe company with nearly 20 years experience.

Where is our future? Regardless of the external praise and singing decline geometry, Hu Qilong, all the guests, are quietly waiting for the answer.

Journalist Notes

Where their future is

With a yearly million-shoe order from E-commerce, will the footwear companies that have experienced more than 10 years of wind and rain be able to rest easy?

The answer is no.

A pair of priced 129 yuan Van Gogh goods canvas shoes, the cheapest promotion is 59 yuan, which is clearly far above the cost bottom line. "We have less than 5% profit margin to make a pair of shoes, we can only win by running." Hu Qilong admits. He kept his mouth shut about the specific figures.

And another for the electrical business of the shoe owner said, if not counted into the labor costs, a pair of shoes cost about 30 yuan. This shoe factory a pair of shoes can only make 2 yuan money. Even if there are millions of of the list, the annual profit is about 10 million yuan. Faced with the rising tide of various costs, their situation is still far from good.

If you make money to expand production lines, increase production capacity? The respondents ' answer is also "no". In their view, any rash move now would put the cash flow at risk of breakage. Perhaps in the heart of these traditional old factory, the future can be all bets on the same failure of the electric dealers, but also a risk.

Himself to do the electricity dealer master pricing power, perhaps the old factory is another way out. But in the face of all sorts of acclimatized, even if many multinational enterprise giants have fallen, this road is not easy?