Shoe Companies: Adidas'S Order Companies Operate As Usual

Another cold winter came quietly.

This is more worrying than the beginning of the year's freeze disaster.

Affected by many factors, such as the subprime mortgage crisis, RMB appreciation, rising labor costs, rising raw material prices, and the adjustment of export rebates and processing trade, Guangdong footwear industry, which accounts for 40% of China's footwear exports, has suffered an unprecedented "cold winter". Thousands of export shoe companies have been eliminated.

According to statistics from Guangzhou customs statistics, in the first half of 2008, the export enterprises of footwear products in Guangdong province fell from 5811 in the same period last year to 3924 in the first half of this year. Among them, the decline of footwear export enterprises in the Pearl River Delta was more obvious, from 5043 in the same period last year to 2617 in the first half of this year, a decrease of 2426, with a drop of 48.1%.

In the first half of this year, Guangdong exported 1 billion 630 million pairs of footwear products, down 15.8% from the same period last year.

However, Guangdong Wan Bang Shoes Co., Ltd. is not worried.

It firmly grasped the order of Adidas customers.

Because Adidas did not pfer orders, Wan Bang still maintained 1 million 100 thousand to 1 million 200 thousand pairs of shoes per month, although the profit was less than in previous years. But in the industry's big shuffling process, it could not be easy to maintain normal operation as usual. Wan Bang spokesman Guo Weiwen used "lucky" to describe his own business.

12 years of putting eggs in a basket, "even if we have good products, good management and sales, if there is no excellent customer service, enterprises can not create excellent performance, and customer service will soon become the main theme of Chinese enterprises."

David Vermando, a global customer service manager who introduced customer relationship management system to Nike and other enterprises, when he met with hundreds of enterprises in Guangzhou in August 15th, suggested that "made in China" should have a sense of enhancing customer service level.

Wan Wan has set up factories in Guangzhou since 1991.

"Adidas has other cooperative processing plants in the world as well as China, but it does not affect the order of Wan. We have a strong competitive edge in terms of production quality, management and customer cooperation."

As for the secret of keeping out the cold, Guo Weiwen said.

Under the influence of the US subprime mortgage crisis and RMB appreciation, some overseas small and medium buyers have reduced orders and lowered orders prices.

Many factories in China are unable to take orders at low cost when the cost is rising rapidly.

In contrast, Nike and Adidas global brands are not only stable on orders, but also make room for processing factories to make certain profit margins for factories to digest costs.

With the increasing popularity of the world and the increasing number of shoe factories in the world, Adidas's requirements for suppliers are becoming stricter and stricter. It is not easy for Chinese shoe factories to win Adidas's orders in the face of intensified competition.

Wan Bang took the lead.

In 1992, Wan Bang met with Adidas to Guangdong to find shoes processing factories for more than a year. The two sides agreed on each other's conditions and soon reached cooperation.

At that time, in addition to Adidas, Wan Bang also OEM for other customers.

In 1996, with the rapid expansion of business, Wan bang made a bold adjustment in strategy, and gave up other customers only for the Adidas family.

Putting all the eggs in one basket, Guo Weiwen admits that there is a risk, but concentrating on working with a strong customer, at the same time, he also grasped a good opportunity.

Over the past ten years, with the rapid expansion of Adidas's global business, the capacity of Wan Bang is growing steadily.

Moreover, Adidas's advanced management system and business philosophy are also embedded in the world.

There are permanent Adidas offices in Wan Bang's factory, and Adidas sends special personnel to check and supervise all the States from time to time in terms of quality and safety, production environment and staff's living standard.

"In the course of years of cooperation, we are growing rapidly. We know what the other party needs and have the ability to cooperate with."

Guo Weiwen said, for example, because of the increase in international trade friction and the rapid rise in production costs, Adidas hopes that its Chinese suppliers should also have a global production layout to reduce operational risks, so that all of them have taken the step of setting up factories in India.

The factory in India has been put into operation at the end of 2006. In less than two years, capacity has rapidly expanded from ten thousand or twenty thousand pairs to 100 thousand pairs a month, and now 300 thousand to 400 thousand pairs a month.

In the past two or three years, Adidas has kept stable orders for WAN Bang's Guangdong factory, and its orders for India factories are growing rapidly.

Transfer reduce costs. International buyers' orders continue to shift to the lowest labor cost area.

Over the past two or three years, the cost advantage of the Pearl River Delta, the most important shoe making base in the world, is gradually losing.

According to statistics from the Asian Footwear Association, the cost of labor in Vietnam and India is only about 3/5 in the Pearl River Delta, while Bangladesh is cheaper, about 1/2.

Li Peng, secretary-general of the Asian Footwear Association, said that although other Asian countries have an advantage over the mainland of China in terms of labor costs, the mainland still has the most competitive competitiveness in terms of workers' technical level, production support, raw material market and overall cost. In the next ten years, it is difficult for a country or region to replace China.

Nevertheless, PRD factories will also have a sense of crisis due to the rapid rise in costs.

Because of the rising cost, Wan Bang has been raising its price to Adidas every year, and is also digesting part of it through its own adjustment.

Starting in 2001, Wan Bang began to set up Wan Bang (Qingxin) shoe industry Co., Ltd. in Taiping Town, Qingxin County, Qingyuan, Guangdong. The factory covers an area of 400 mu.

On the one hand, the cost of production is reduced, and on the other hand, the problem of expanding factories in Guangzhou is solved.

In the 5 years, Wan Bang gradually pferred the production line from Guangzhou to Qingyuan, and it was completely pferred in 2006.

Guo Weiwen has not talked about the cost of operation by reducing the cost of operation. It can be seen from the minimum wage standard of Qingyuan that the city has more cost advantages.

Guo Weiwen said that after pferring from Guangzhou to Qingyuan, it can not only reduce labor costs, but also alleviate the problem of "worker shortage".

And this is exactly what the Guangdong provincial government explicitly proposed in this year's "double shift" of industry and labor force.

In addition, Guo Weiwen also talked about the increasing proportion of domestic orders, which effectively slowed down the pressure brought by the appreciation of the renminbi.

"The consumption level of the Chinese market is constantly improving, and the orders for Adidas's domestic sales in recent years are growing rapidly. This is one reason why international customers will always produce a certain proportion of production in China."

In Guo Weiwen's eyes, as long as we can constantly enhance our competitiveness, the fate of China's shoe factory will not be dim.