Shoe and apparel companies are turning to new industries to enter or urgently upgrade and transform

Wenzhou, an eastern city that has long been a gathering place for low-cost factories such as shoes and clothes, is now moving toward the production of higher-value industries. It is undeniable that the increase in labor costs has, to a certain extent, squeezed the margins of Wenzhou shoe and clothing manufacturing, and has prompted shoe and clothing manufacturers to shift their production bases to lower-cost places, such as India, Vietnam, and some of China’s less developed countries. Mainland provinces.

According to relevant information, China’s trade surplus increased significantly in June, but the total surplus in the first half of the year was reduced by 18% compared with the same period of last year, continuing the downward trend that began in 2008. The Chinese government immediately complained of the continuous narrowing of the surplus. It refuted the criticism that the Chinese pressed down the exchange rate to promote exports, which in fact amounted to stealing employment from other countries. This, to another extent, also affected the entrepreneurs of Wenzhou shoes and apparel. Road to new industry determination.

It is true that the performance of China's shoe and clothing export companies is still better than that of shoe and clothing exporters in most other countries, and their continued increase in the global market share is evidence. According to the World Bank's data, this proportion was nearly 10% last year. However, the reason for this is very complicated, and it is not just the low exchange rate.

In addition, shoe factories in Wenzhou and other coastal areas in China benefit from first-class expressway facilities and convenient roads to the port. Industrial clusters create a dense and complete supply chain. Although the labor force growth is slower than before, it is still huge and relatively skilled, which is beyond doubt.

“The manufacture of shoes and apparel in Wenzhou and even China is irreplaceable.” An industry source said, “You can't move a large factory to another place without thorough consideration because the resources to move to labor and other factors of production are much less. Places will only drive up costs."

There is no doubt that China’s wages are rising steadily, and urban per capita income has increased by 82% over the past five years. In the eyes of experts, this indicates that the end of low-cost manufacturing model - not just China, but the world as a whole, because no country can completely replace China's footwear manufacturing.

However, for Wenzhou shoes and apparel factories, the challenge is how to adapt to the rising cost trend.

"We are trying to improve the working environment of workers, not just to give them a raise. They are now taking a day off every week. The dormitory is air-conditioned and it has also been repaired," said a company official. “At the same time, we must also think of ways to improve product quality. To be exact, transformation is not easy, and it is difficult for income growth to keep up with the cost increase. Now many people withdraw their money by investing in shoes because they cannot make money. Real estate, so much faster."

Looking at the entire Wenzhou shoe and clothing market and the domestic shoe and clothing industry, we can't deny that factors such as labor shortages, difficulties, and rising costs have already constrained the development of shoe and clothing manufacturing to a certain extent, and that it is urgent to break through to invest in new industries. The new transformation and upgrading has undoubtedly become a fluctuating point for the footwear industry. However, we believe that as long as the current footwear industry is focused on improving brand quality and innovating brand strategies, the outlook for shoe and clothing manufacturing is still prosperous.