An earthquake in shoe industry is taking place. The epicenter is in the East.

Since the second half of 2007, a large number of small and medium-sized shoe enterprises have closed down in Dongguan and Wenzhou, the two largest shoe industry in China.

"Nowadays, enterprises talk about cost is no longer a question of how much profits are related, but whether they can continue to live."

A shoe enterprise boss's heart tells the East shoe enterprises are facing the life and death torment.

"Under the global background of industrial pfer, today, the eastern region where manufacturing is over saturated is suffering from multiple problems such as rising cost of raw materials and labor, appreciation of the renminbi, processing trade and adjustment of export tax rebate policy."

Zhang Shuhua, director of the China Leather Association, spoke of the worries of the shoe owners in the East.

But at the same time, Bishan, Chongqing, which has the reputation of the western footwear capital, is in a big way to welcome this opportunity of industrial adjustment.

Cost revolution

The word "cost revolution" is very popular in this year's shoe industry in Wenzhou.

The head of AOKANG group, the largest private shoe making enterprise in China, told reporters that "the overall cost of shoemaking this year has increased by 20% compared with that of last year. Under the situation that the retail price of leather shoes has not risen, the cost pressure of enterprises has been increasing."

AOKANG set up a cost team this year to set up a full-time post to further refine the cost control.

Quantitative utilization of raw materials, further integration of human resources, and even energy conservation in offices and living quarters are all being considered.

In the Wenzhou Ouhai Industrial Zone, which is known as the Chinese shoes capital, it was busy season at this time of the year, but this year it seems a lot of cold and cheerless.

The rise of cost makes the enterprise's ability to resist risks weaken, so enterprises are careful to make orders.

"In fact, enterprises do not have no single list to do so, but they are afraid to accept it. They are not affected by the instability of the RMB exchange rate. Some of the bills in July and August are afraid to pick up. They can only pick up some recent ones."

A business owner, with 500 shoe size, said, "the overall cost of the enterprise was 26% higher than last year. After the implementation of the new labor contract law, only the employee salary increased by 2 million yuan. Most of the other costs were raw materials, export tax rebates, RMB exchange rate and so on.

According to the survey of the local Footwear Association, nearly 1 / 3 of the small and medium shoe enterprises in Ouhai alone fail or operate poorly, and 1 / 3 of the shoe companies keep their original business, while the other 1 / 3 have only a small profit.

"It's too fast for us to prepare. It's just like a disaster."

A shoe business owner who has been running shoes for more than 30 years said.

The same situation, the Pearl River Delta seems to be more serious: according to the November 2007 statistics report of the Asian footwear industry association, there are five thousand or six thousand shoe factories in Guangdong, and more than 1000 large and medium-sized shoe factories have been closed, of which two or three shoe factories in Huidong have closed four hundred or five hundred small shoe factories in more than 3000 months.

In addition to policy factors, the industry itself has also made it possible for enterprises to doomed their fate from that day.

At present, more than 70% of the PRD enterprises still rely on the "low cost, low profit" processing trade mode, always living at the low end of the price chain, with a profit of only 5%-10%.

Such labor-intensive enterprises do not have the core competitiveness. Once the low cost advantage is lost, they will directly face the choice of life and death.