About 60% of the shoes in the world are produced in this small town! But is there a brand that sells a pair for 3.5 yuan?
How can a shoe factory with annual sales of more than 100 million yuan "defy the situation"?
Dongguan is known as the "World Factory", and its economic outward orientation here exceeds 100%. From shoes to sweaters, toys, and mobile phones, "Made in Dongguan" has an absolute market share in the international market, but 95% of Dongguan are small, medium and micro enterprises with small scale and low risk resistance. There are more than 500 shoe factories, large and small, and it is a veritable "shoe capital".
Ambitious to build a brand at the beginning of the year,
Now I have sold local stalls,
Where do foreign trade companies go?
Houjie, Dongguan, Guangdong, is not a street, but a small town famous for its shoes. About 60% of the shoes in the world are produced here.
Houjie Town, Dongguan, Guangdong
Wu Jichao is the general manager of Tangka Buluo Sports Goods Co., Ltd. in Dongguan City, Guangdong Province. His factory achieved annual sales of more than 15 million yuan when its performance was at its best two years ago. But in the past two months, he was in Houjie. Various shoe factories purchase stocked shoes at low prices and then resell them to these small vendors.
Wu Jichao in Houjie
Wu Jichao
Just in January this year, the reporter of "Economic Half an Hour" met Wu Jichao for the first time. He was holding a lively investment promotion conference and launched his own brand of new shoes. Due to the sharp drop in foreign trade orders, Wu Jichao, who has been a foreign trade OEM for 13 years, intends to enter the domestic market. At that time, he was ambitious. He hoped to develop 100 agents and sell shoes to 100 cities in 2020, but the epidemic broke all of him. To date, no foreign trade orders have been received.
Wu Jichao's shoe factory started construction in March. Although there were no orders, the factory's fixed expenses such as water and electricity rents did not decrease. In order to retain dozens of skilled workers in the factory, Wu Jichao gave them all a salary increase. In the first four months of this year, Wu Jichao's factory continued to lose money, and he had to start wholesale shoe inventory. In order to find low-cost sources, Wu Jichao traveled to shoe factories in Houjie.
Wu Jichao's shoe factory
On this day, Wu Jichao came to the shoe factory of his old friend Peng Jiawen to buy goods. Peng Jiawen's company suffered a severe decline in sales in the first half of this year, and shoes filled the entire warehouse.
Peng Jiawen Company
In order to clear the inventory, Peng Jiawen had to deal with these inventory shoes at a loss of 5 yuan, but Wu Jichao was still bargaining.
After a lot of bargaining, the two sides finally sold each pair of shoes at a price of 3.5 yuan.
Wu Jichao told reporters that this is not the cheapest. The cheapest shoes he bought only cost 2 yuan a pair. From the shoe factory owner who OEMs for international brands to the wholesaler who sells goods on the ground, each pair earns only a few cents in profit. Such a change is somewhat embarrassing. But Wu Jichao told reporters that his encounter with Peng Jiawen is not uncommon in Houjie Town. Many foreign trade shoe factories in the town are looking for new outlets.
Peng Jiawen has opened a shoe factory in Dongguan for 11 years. When business was at its best, his factory had annual sales of more than 100 million yuan, and it was also a large shoe factory in Houjie. But in recent years, his factory has been going downhill. In the first half of 2019, the company's sales fell to more than 20 million yuan, even rent and workers' wages were not enough, and more than 7 million yuan in debt. Because he was in arrears of more than 700,000 yuan in rent, he had to sell the factory he had run for ten years to the landlord, and changed from the factory owner to working for the landlord.
Now, Peng Jiawen has sold his villa in Hunan, as well as many luxury cars on hand. The car he drives now is borrowed from relatives.
Peng Jiawen's past car
Peng Jiawen
What Peng Jiawen is most anxious about right now is to clear the inventory. He used to mainly do the wholesale of the domestic market, mainly using offline channels. After the outbreak, most of the domestic wholesale markets have postponed operations, completely disrupting his supply plan. Right now, he is staring at the full inventory of shoes and worrying every day.
Peng Jiawen
In the first half of this year, Peng Jiawen's shoe factory sales were 1.5 million yuan, which is less than one-tenth of the same period last year. Inventory is more than sales volume. Peng Jiawen calculated it and lost more than 500,000 yuan in the first half of the year. If these inventory cannot be digested in time, the loss will rise to nearly 3 million yuan.
Peng Jiawen
Peng Jiawen was unwilling to fail like this. He named himself "Come from the beginning" on WeChat, indicating that he was going to fight his back. He plans to no longer only do a single offline wholesale, and to obtain orders through e-commerce in the second half of the year, waiting for the market to pick up.
Peng Jiawen's WeChat name
Foreign trade people don't give up!
The boss makes his own "Internet celebrity" and opens up new channels for e-commerce
Wu Jichao and Peng Jiawen have done foreign trade OEMs for decades. They only know the foreign trade field. For them, how do domestic e-commerce companies start from scratch. They have no connections and resources. They don’t know where to start. Never gave up looking for a new way out. Under Peng Jiawen's introduction, Wu Jichao found an e-commerce live broadcast company and planned to live broadcast the goods.
Discuss the live delivery program
Starting in June, Wu Jichao began to cooperate with an e-commerce company. In a month, the number of reviews of the most popular shoes reached more than 1,900. In June, e-commerce sales accounted for 63% of Wu Jichao's total sales, driving the total sales of the factory to increase from 1.8 million yuan in May to more than 3 million yuan in June.
Wu Jichao
In the second half of the year, Wu Jichao will increase e-commerce marketing efforts. While discussing cooperation with professional e-commerce companies, he spoke for himself, trying to establish himself as a "net celebrity." In the past two months, he has been selling goods live online every week. Although the anchor is not professional enough and there are not many fans, the effect has begun to show, and now he has harvested every day.
Wu Jichao
It is not only the footwear industry that is affected by the epidemic this year, but also the luggage factory in Houjie Town. In the first half of this year, a luggage company did not even get a single export order for luggage, and it relied on last year's profits for six months. The second half of the year is the peak season for sales in Europe and America. General Manager Wang Tuo is developing new Christmas products for overseas, but the company's funds are already stretched. To his comfort, shareholders basically agreed to increase investment in research and development of new products.
Shareholders promised to increase investment
To Wang Tuo's delight, overseas customers attach great importance to new Christmas products. One of the customers has already spent RMB 120,000 on R&D and plans to purchase 10,000 new packages in the first batch. Wang Tuo hopes to take this order with a sincere attitude of cooperation. Once successful, it will generate more than 3.2 million yuan in exports.
Wangto
From January to June this year, the total export value of Dongguan was 341.47 billion yuan, a cumulative decline of 11.1%. But the total export volume of Dongguan in June was 72.09 billion yuan, an increase of 5.8% over the same period last year. Behind this figure are countless foreign traders like Wu Jichao, Peng Jiawen, Hu Weili and Wang Tuo, who did not give up. Actively develop new products and new channels.
Half-hour observation: Dongguan starts from "new"
Since the beginning of this year, affected by various factors such as the new crown pneumonia epidemic, my country's foreign trade companies have faced unprecedented challenges. However, the reporter also felt during the investigation in Dongguan that despite the difficult situation, these foreign trade companies are facing up to the difficulties and looking for new opportunities in the crisis. According to data from the General Administration of Customs, in June this year, my country's foreign trade has stabilized. For the first time, imports and exports have experienced a positive year-on-year growth. Dongguan's foreign trade companies are also developing new products and looking for new markets. Dongguan is starting from "new".