Footwear Industry Should Guard Against "Hollowing Out" Industry

In order to have an image understanding of the concept of "hollowing out" of brands or enterprises, let's start with a story:

There is a production enterprise that produces Cloth shoes Around the world, only 15% of China's cloth shoes are produced by them. Later, in the process of operation, they found that they had no brands, mainly to others, and began to attach importance to brand building, and registered the brand "foot" (imitation brand). With its own brand, it began to have its own franchised stores and chain sales channels, and domestic sales continued to improve.

It's not a long story, because nearly 50% of the sales volume is overseas, and overseas has no own brand, just a simple OEM. Since the European subprime crisis, foreign economic crisis has affected the domestic market, and export sales have plummeted. At the same time, the domestic real estate industry is booming, and financial investment is also booming. Business owners immediately decided to enter real estate and invest in industries such as banks and schools.

In the new industry, the elite employees of the shoe industry have been diverted to the real estate companies and financial companies. The number of the original industry has dropped from 1000 to 500, and the business of cloth shoes has started to decline in profits and even suffered losses. But with the influence of the "foot" brand, the land has been taken to the capital, the profits of the real estate industry have increased dramatically, and the proceeds from financial financing are also good. The key is that the brand pull brought by the original brand building has brought huge profits to the enterprises.

Can the shoe industry be closed? The owners of the company weigh the pros and cons and find that the influence of the brand comes mainly from the footwear industry. If the traditional industries are stopped, they will have an adverse impact on real estate and finance. In order to maintain the original industry, shoe companies are forced to continue to operate, but business support mainly relies on the existing real estate and financial sectors. In order to reduce labor costs and technology investment, footwear companies are actually gradually reducing some of the inputs that should not be reduced, making the operation of enterprises more difficult.

Two years later, the operation of shoe companies was more difficult and the brain drain was serious. The original design and technology advantages were almost wiped out, and the position of the industry dropped. The frightening thing is that domestic real estate and finance are affected by the macroeconomic regulation and control policies of the country. The momentum of development has begun to be gentle and the profits are no longer rich, and the entangled business owners are in a dilemma.

The story is, of course, imaginary. Although you do not have to be seated, I believe many bosses will consciously find their own shadow inside. The "hollowing" of footwear industry is also known as the "hollowing" of shoe brands, mainly referring to the fierce competition in the footwear industry in recent years, and the impact of overseas exports on the impact of the international economic crisis has become a trend of decadence. The transformation of enterprises in the footwear production base of Guangdong Huizhou and Zhejiang Wenzhou has entered into a non industrial sector.

Because the industrial chain of the non industrial sector is relatively short, the products are invisible, mostly for the intelligent intensive or capital demand industries. For example, under the temptation of huge profits in real estate, Huajian shoes industry and AOKANG The group has entered the real estate industry. The worry is whether these capital intensive industries will quietly "hollow" their main businesses.

It is not hard to see that the phenomenon of Industrial Hollowing often occurs in the transformation of enterprises, and is the self protection after the enterprises' advantages and disadvantages. However, if business operators can not understand this phenomenon well and evade it, it will be easy to see the existence of the industry. Although "no quit or no write off", it is already a "zombie enterprise" that exists in name only.

Wenzhou City Shoe leather Industry Association Secretary General Xie Rongfang said: so far in 2012, there were more than 100 shoe factories in Wenzhou, more than 100 of which were closed, and the number of shoe enterprises in Wenzhou will be reduced next year. According to her, AOKANG, Kangnai, red dragonfly and Dongyi four Wenzhou shoe enterprises will make further efforts with the help of capital market financing. Of course, these enterprises have no exception in the brand of the risk of hollowing: Red Dragonfly entered the real estate, finance and education industry, Kangnai entered the commercial real estate and business.

Industry is the lifeblood of China's national economy. Although we envied that the US economy is dominated by service industries, the national conditions have determined that we must strengthen the operation and management of physical entities for quite a long time. The prospect of industry in China can be expected, and the state has been protecting the industrial economy in terms of guidance and policy.

For footwear enterprises, to avoid the hollowing of enterprises, we must first realize that the physical industry is promising and should have the determination and confidence to dig deep into the potential of the industry. In the specific operation of enterprises, we should innovate ideas, such as integrating resources in an open system: not only for others, but also for others. For example, the Chengdu Dan Lu shoe industry has both its own brand sales and customized OEM for shoes such as red dragonfly. It has achieved the scale effect of production capacity, reduced the cost and improved its reputation in the domestic market.

There should be a sentence: only the setting sun enterprises do not have the sunset industry.

The reason why we call for the real economy of the footwear industry is not far from that: the rapid development of the European financial services industry, the relocation of a large number of manufacturing industries has led to the hollowing of the real economy, the high welfare under the virtual economic boom, and the lack of external force for "blood transfusion" when the economy is sluggish, which is an important reason for the "sovereign debt crisis" sweeping across the continent. Japan is also not spared. The industry "hollow" let Japan "lose ten years", China should of course be vigilant. Like hollow radish, not hollow in winter, but in spring!