Dongguan is known as the “World Factory”, and its economic export-oriented degree exceeds 100%. From shoes to sweaters, toys, and mobile phones, “Made in Dongguan” occupies an absolute market share in the international market. However, 95% of Dongguan’s enterprises are small, medium and micro enterprises, which are small in scale and have low risk resistance. There are more than 500 shoe factories of all sizes gathered here, making it a veritable “shoe capital”.
At the beginning of the year, I was ambitious to build a brand, but now I am selling street stalls. Where will the foreign trade company go?
Houjie in Dongguan, Guangdong is not just a street, but a town famous for its shoes. About 60% of the world’s shoes are produced here.
Houjie Town, Dongguan, Guangdong
Wu Jichao is the general manager of Tangkabuluo Sports Goods Co., Ltd. in Dongguan City, Guangdong Province. When his factory had its best performance two years ago, annual sales reached more than 15 million yuan, but in the past two months, he has been in Houjie. Various shoe factories purchase stock shoes at low prices and then resell them to these small traders.
Wu Jichao in Houjie
Wu Jichao
Just in January this year, the reporter met Wu Jichao for the first time. He was holding a lively investment meeting and launched new shoes of his own brand. Due to the sharp drop in foreign trade orders, Wu Jichao, who has been a foreign trade OEM for 13 years, planned to enter the domestic market. At that time, he was ambitious and hoped to develop 100 agents by 2020 and sell shoes to 100 cities. However, the epidemic broke all his plans. dream, so far, no foreign trade orders have been obtained.
Wu Jichao’s shoe factory started operations in March. Although there are no orders, the factory’s fixed expenses such as water, electricity and rent have not been reduced at all. In order to retain dozens of skilled workers in the factory, Wu Jichao also gave them a salary increase. In the first four months of this year, Wu Jichao’s factory suffered continuous losses, and he had to start wholesale of inventory shoes. In order to find low-priced goods, Wu Jichao visited shoe factories of all sizes in Houjie.
Wu Jichao’s Shoe Factory
This One day, Wu Jichao came to the shoe factory of his old friend Peng Jiawen to purchase goods. Peng Jiawen’s company’s sales fell sharply in the first half of this year, and the entire warehouse was filled with shoes.
Peng Jiawen Company
In order to clear inventory , Peng Jiawen had to dispose of these stock shoes at a loss of 5 yuan, but Wu Jichao was still counter-offering.
After some bargaining, the two parties finally settled the transaction at a price of 3.5 yuan per pair of shoes.
Wu Jichao told reporters that this is not even the cheapest, he has purchased the cheapest Shoes only cost 2 yuan a pair. From a shoe factory owner who makes OEM products for international brands to a wholesaler selling goods on the street, making only a few cents per pair, this change is somewhat disappointing. But Wu Jichao told reporters that his encounter with Peng Jiawen was not uncommon in Houjie Town. Many foreign trade shoe factories in the town are looking for new ways out.
Peng Jiawen has been running a shoe factory in Dongguan for 11 years. When the business was at its best, his The factory’s annual sales exceed 100 million, making it one of the largest shoe factories in Houjie. But in recent years, his factory has been in decline. In the first half of 2019, the company’s sales dropped to more than 20 million yuan. It could not even make up the rent and workers’ wages, and it also had debts of more than 7 million yuan. Since he owed more than 700,000 yuan in rent, he had no choice but to sell the factory he had run for ten years to his landlord, and changed from being a factory owner to working for the landlord.
Wu Jichao
In the second half of the year, Wu Jichao will increase his efforts in e-commerce marketing. While he is negotiating cooperation with professional e-commerce companies, he will also endorse himself and try to make himself an “Internet celebrity”. In the past two months, he has Weekly live broadcast online to sell goods. Although the anchor is not professional enough and does not have many fans, the effect has begun to show, and now there are gains every day.
Wu Jichao
Not only the shoe industry has been affected by the epidemic this year, but also the luggage factory in Houjie Town is having a hard time. In the first half of this year, a luggage company didn’t even get a single export order for luggage, relying entirely on last year’s profits for half a year. The second half of the year is the peak season for sales in Europe and the United States. General Manager Wang Tuo is developing new Christmas products for overseas markets, but the company’s funds are already stretched thin. To his relief, shareholders basically agreed to increase investment in research and development of new products.
Shareholders agree to increase investment
Order Wang Tuo is pleased that overseas customers attach great importance to the new Christmas products. One of the customers has spent 120,000 yuan on research and development and plans to purchase the first batch of 10,000 new bags. Wang Tuo hopes to win this order with a sincere cooperative attitude. Once successful, it will generate an export volume of more than 3.2 million yuan.
Wang Tuo
From January to June this year, Dongguan City’s total export volume was 341.47 billion yuan, a cumulative decline of 11.1%. However, Dongguan’s total exports in June were 72.09 billion yuan, an increase of 5.8% over the same period last year. Behind this number are countless foreign trade people like Wu Jichao, Peng Jiawen, Hu Weili and Wang Tuo, who refused to give up. Actively develop new products and new channels.
Dongguan starts from the “new”
Since this year, affected by the new crown Affected by various factors such as the pneumonia epidemic, my country’s foreign trade companies are facing unprecedented challenges. However, the reporter also felt during the investigation in Dongguan that despite the difficult situation, these foreign trade companies are rising to the difficulties and looking for new opportunities in the crisis. Data from the General Administration of Customs shows that in June this year, my country’s foreign trade has stabilized, and imports and exports have experienced positive year-on-year growth for the first time during the year, and the recovery trend is better than expected. Dongguan’s foreign trade companies are also developing new products and looking for new markets. Dongguan is starting from the “new”. </p
