Nike announced its fourth quarter fiscal year 2011 results. In the 2010 fiscal year, Nike marked 37% of the world's Sports Shoes with the “Made in Vietnam†mark. In this fiscal year, Nike sports shoes with “Made in China†accounted for only 34%. This is the history of Nike. For the first time, "Made in Vietnam" surpasses "Made in China". It also means that Vietnam has finally replaced China as the world's largest sports shoe production base.
The most helpless reality ---
Foundry Nike Vietnam first super-China In 1980, Nike began negotiations with China, decided to move its production base of sports shoes from the then South Korea, China Taiwan to the mainland. Soon, China became the largest producer of Nike sports shoes and continued until 2010.
In the earlier fiscal year 2001, China produced 40% of Nike's athletic shoes, ranking first in all countries, while Vietnam only had a 13% share. However, by the end of fiscal 2006, the proportion of China's Nike athletic footwear production had fallen to 35%, while Vietnam quickly rose to 29%. In fiscal year 2009, the proportion of Nike sports shoes produced in China and Vietnam is equal, which is also 36%. Until the financial year 2010, Vietnam finally replaced China as Nike's largest sports shoe production base in the world.
In 2005, Nike's foundry "flighted" a crucial year for Vietnam. In 2005, two of the world’s largest manufacturers of the Nike company, Taiwan’s Baocheng and Fengtai, reported the “production expansion in Vietnamâ€. Since that year, Winterthur Group has brought many Chinese orders to Vietnam, while expanding the production lines of four processing plants in Vietnam and investing more than US$16 million in a new factory in Vietnam. Subsequently, Baocheng Group also plans to launch 15 new production lines in Vietnam.
Regarding the reasons for the “escapeâ€, the argument at that time was: “Vietnam’s low-cost labor force gradually freed up Vietnam’s attraction to foreign capital.â€
The clearest trend ---
Manufacturing "escapes" to low-cost areas
Unlike Nike’s “escapeâ€, Brown Shoes, one of the world’s largest footwear trading companies, chose to stay. “Because the Vietnamese workers are always on the move, we are still willing to place orders for Chinese foundries.â€
Although the “escape†of the Nike factory is not an absolute representation, it truly sends a signal that “escape†is bound to become a trend.
Nike was made in Japan from 1964 to Korea and Taiwan in the 1970s, and then to mainland China. After entering the 21st century, Vietnam has gradually become an important production base. From the history of Nike's development, it is not difficult to see that the movement of production from a high-cost area to a low-cost area will definitely not stop in China.
“Actually, the various costs of production in Dongguan are rapidly rising. As a labor-intensive shoemaking industry, we are unable to produce in Dongguan.†The relevant person in charge of the Dongguan footwear trading company stated that “At the moment we will Orders for high-end and high-end shoes were sent to some foundries in Wenzhou, Fujian, or the mainland, where not only technology, raw materials, and labor costs were relatively low, but orders for other low-end shoes went down to other countries in Southeast Asia. Vietnam, Indonesia, and even Ethiopia, even further away, because the cost is lower. In a year or two, domestic costs will increase further, and after the technical and raw materials of other countries mentioned above come up, maybe Even the order of high-end shoes will go out one after another."
"To be honest, as early as five or six years ago, this sign has become obvious." Yi Xingjian, deputy dean of the School of International Economics and Trade of Guangdong University of Foreign Studies, said: "The wolf is coming," the cry from 2008 began. Shouted. In May 2008, 43 manufacturing companies in Hong Kong completed an inspection tour of Vietnam. The purpose was to "discuss the feasibility of transferring the production line to Vietnam to ease the cost pressure on the production line of the "Pearl River Delta."
“Cheap labor is not the only factor,†Yi Xingjian pointed out. “Exactly speaking, it should be the factors of production, including the price of labor, land rent, local policies, etc., plus the impact of the appreciation of the *** in recent years, It is not surprising that such a labor-intensive enterprise has chosen Vietnam. However, the speed of this 'transfer' is accelerating.
The worst idea ———
"The domino effect" caused the manufacturing industry to shrink. "If we really want to look at this issue in the worst case, what kind of situation would it be?" said Lin Jiang, director of the Department of Finance and Taxation at Lingnan University, Sun Yat-sen University. First, there is excess production capacity. On the one hand, the production equipment of the footwear industry has become useless. It is equivalent to the lack of investment in the previous period, and it even requires people to clean up these large garbage. On the other hand, it is a terrible psychological impact that dominoes have fallen one after another. ——Shoes “run away,†then similar industries, such as garments, bags, etc., start to worry, and may follow “outgoingâ€. The rest of the company would rather stop work than dare to take it too. More orders affect the ecology of the entire manufacturing industry, and due to credit relationships, etc., will indirectly impact the financial system...
"If we continue to assume this, it can be thought that the shoe-making industry, one of the labor-intensive leading industries, will be accompanied by similar industries such as locker bags, leading to shrinking of the manufacturing industry and the deterioration of the business environment in Guangdong. The export was greatly reduced and GDP was falling..." Lin Jiang counts one by one and then points out: "If this happens really, this is really very worrying."
The most in-depth thinking ———
The Pearl River Delta cannot always be a “world factoryâ€
Without Nike, can we rely on Prada or Louis Vuitton? Lin Jiang does not seem to be optimistic: “On the surface, many brand owners of luxury goods now place their OEM business in China, or concentrate in the Pearl River Delta. But it is not easy to think carefully. thing."
According to the survey, he found that luxury goods generally take three types of prices: "Italian or European-made, selling the most expensive; then South America's products, the price of second-class; including China's production of products in Southeast Asia, It is the cheapest to sell," Lin Jiang pointed out. "What does this mean? 'Made in China' also faces a problem of lower prices." In other words, even if it is to OEM luxury goods, corporate profits are limited.
In the "Think Out" section, it seems that the views of Yi Xingjian and Lin Jiang are very similar - "The Pearl River Delta cannot always be a 'world factory'." Yi Xingjian pointed out more directly that "From reform and opening up Until now, we have already passed the stage of attracting simple processing industries by relying solely on cheap labor, and we cannot stay at this stage all the time. The process may be painful, but we need to rise to a new level. This will return. The main tone we insist on is still to rely on transformation and upgrading."
The most basic way out ---
To fill the gap in the production of *** industry "Nike" gone, what do we fill? "We may have some worries in a short period of time, but we must move forward," Yi Xingjian pointed out. "If labor-intensive industries are turned away, what do we have to do to fill it up? This is what we say." A section of the curve can be said. It can be said that the factory that manufactures the shoes has turned away. We can design shoes, sell brands, etc. These industries are not only environmentally friendly, but also have many values ​​to create."
“The current situation has not yet reached the point where 'the rains are all over the building’, but we must make good use of this time and have a sense of crisis,†Lin Jiang suggested. “In fact, the manufacturing industry in the Pearl River Delta has only two options: continue. For others to process, or create their own brand for their own processing. There are no short cuts."
Gradually away from the “world factoryâ€, the Pearl River Delta has even to adjust its own role image — “I suggest that the manufacturing culture of the Pearl River Delta must also change,†Lin Jiang further pointed out, “In the past, entrepreneurs have always put their own business Profits are 'takes all', 'eats all', and 'gets enough.' This is because companies only do OEMs, but once they do domestic sales, the core of this culture will have to change: the profits of entrepreneurs need to be redistributed, There is money to earn from the top to the bottom, and it is necessary to let profits be given to workers. Only when the masses of the people have money will they fundamentally stimulate the consumption of local brands."
The most helpless reality ---
Foundry Nike Vietnam first super-China In 1980, Nike began negotiations with China, decided to move its production base of sports shoes from the then South Korea, China Taiwan to the mainland. Soon, China became the largest producer of Nike sports shoes and continued until 2010.
In the earlier fiscal year 2001, China produced 40% of Nike's athletic shoes, ranking first in all countries, while Vietnam only had a 13% share. However, by the end of fiscal 2006, the proportion of China's Nike athletic footwear production had fallen to 35%, while Vietnam quickly rose to 29%. In fiscal year 2009, the proportion of Nike sports shoes produced in China and Vietnam is equal, which is also 36%. Until the financial year 2010, Vietnam finally replaced China as Nike's largest sports shoe production base in the world.
In 2005, Nike's foundry "flighted" a crucial year for Vietnam. In 2005, two of the world’s largest manufacturers of the Nike company, Taiwan’s Baocheng and Fengtai, reported the “production expansion in Vietnamâ€. Since that year, Winterthur Group has brought many Chinese orders to Vietnam, while expanding the production lines of four processing plants in Vietnam and investing more than US$16 million in a new factory in Vietnam. Subsequently, Baocheng Group also plans to launch 15 new production lines in Vietnam.
Regarding the reasons for the “escapeâ€, the argument at that time was: “Vietnam’s low-cost labor force gradually freed up Vietnam’s attraction to foreign capital.â€
The clearest trend ---
Manufacturing "escapes" to low-cost areas
Unlike Nike’s “escapeâ€, Brown Shoes, one of the world’s largest footwear trading companies, chose to stay. “Because the Vietnamese workers are always on the move, we are still willing to place orders for Chinese foundries.â€
Although the “escape†of the Nike factory is not an absolute representation, it truly sends a signal that “escape†is bound to become a trend.
Nike was made in Japan from 1964 to Korea and Taiwan in the 1970s, and then to mainland China. After entering the 21st century, Vietnam has gradually become an important production base. From the history of Nike's development, it is not difficult to see that the movement of production from a high-cost area to a low-cost area will definitely not stop in China.
“Actually, the various costs of production in Dongguan are rapidly rising. As a labor-intensive shoemaking industry, we are unable to produce in Dongguan.†The relevant person in charge of the Dongguan footwear trading company stated that “At the moment we will Orders for high-end and high-end shoes were sent to some foundries in Wenzhou, Fujian, or the mainland, where not only technology, raw materials, and labor costs were relatively low, but orders for other low-end shoes went down to other countries in Southeast Asia. Vietnam, Indonesia, and even Ethiopia, even further away, because the cost is lower. In a year or two, domestic costs will increase further, and after the technical and raw materials of other countries mentioned above come up, maybe Even the order of high-end shoes will go out one after another."
"To be honest, as early as five or six years ago, this sign has become obvious." Yi Xingjian, deputy dean of the School of International Economics and Trade of Guangdong University of Foreign Studies, said: "The wolf is coming," the cry from 2008 began. Shouted. In May 2008, 43 manufacturing companies in Hong Kong completed an inspection tour of Vietnam. The purpose was to "discuss the feasibility of transferring the production line to Vietnam to ease the cost pressure on the production line of the "Pearl River Delta."
“Cheap labor is not the only factor,†Yi Xingjian pointed out. “Exactly speaking, it should be the factors of production, including the price of labor, land rent, local policies, etc., plus the impact of the appreciation of the *** in recent years, It is not surprising that such a labor-intensive enterprise has chosen Vietnam. However, the speed of this 'transfer' is accelerating.
The worst idea ———
"The domino effect" caused the manufacturing industry to shrink. "If we really want to look at this issue in the worst case, what kind of situation would it be?" said Lin Jiang, director of the Department of Finance and Taxation at Lingnan University, Sun Yat-sen University. First, there is excess production capacity. On the one hand, the production equipment of the footwear industry has become useless. It is equivalent to the lack of investment in the previous period, and it even requires people to clean up these large garbage. On the other hand, it is a terrible psychological impact that dominoes have fallen one after another. ——Shoes “run away,†then similar industries, such as garments, bags, etc., start to worry, and may follow “outgoingâ€. The rest of the company would rather stop work than dare to take it too. More orders affect the ecology of the entire manufacturing industry, and due to credit relationships, etc., will indirectly impact the financial system...
"If we continue to assume this, it can be thought that the shoe-making industry, one of the labor-intensive leading industries, will be accompanied by similar industries such as locker bags, leading to shrinking of the manufacturing industry and the deterioration of the business environment in Guangdong. The export was greatly reduced and GDP was falling..." Lin Jiang counts one by one and then points out: "If this happens really, this is really very worrying."
The most in-depth thinking ———
The Pearl River Delta cannot always be a “world factoryâ€
Without Nike, can we rely on Prada or Louis Vuitton? Lin Jiang does not seem to be optimistic: “On the surface, many brand owners of luxury goods now place their OEM business in China, or concentrate in the Pearl River Delta. But it is not easy to think carefully. thing."
According to the survey, he found that luxury goods generally take three types of prices: "Italian or European-made, selling the most expensive; then South America's products, the price of second-class; including China's production of products in Southeast Asia, It is the cheapest to sell," Lin Jiang pointed out. "What does this mean? 'Made in China' also faces a problem of lower prices." In other words, even if it is to OEM luxury goods, corporate profits are limited.
In the "Think Out" section, it seems that the views of Yi Xingjian and Lin Jiang are very similar - "The Pearl River Delta cannot always be a 'world factory'." Yi Xingjian pointed out more directly that "From reform and opening up Until now, we have already passed the stage of attracting simple processing industries by relying solely on cheap labor, and we cannot stay at this stage all the time. The process may be painful, but we need to rise to a new level. This will return. The main tone we insist on is still to rely on transformation and upgrading."
The most basic way out ---
To fill the gap in the production of *** industry "Nike" gone, what do we fill? "We may have some worries in a short period of time, but we must move forward," Yi Xingjian pointed out. "If labor-intensive industries are turned away, what do we have to do to fill it up? This is what we say." A section of the curve can be said. It can be said that the factory that manufactures the shoes has turned away. We can design shoes, sell brands, etc. These industries are not only environmentally friendly, but also have many values ​​to create."
“The current situation has not yet reached the point where 'the rains are all over the building’, but we must make good use of this time and have a sense of crisis,†Lin Jiang suggested. “In fact, the manufacturing industry in the Pearl River Delta has only two options: continue. For others to process, or create their own brand for their own processing. There are no short cuts."
Gradually away from the “world factoryâ€, the Pearl River Delta has even to adjust its own role image — “I suggest that the manufacturing culture of the Pearl River Delta must also change,†Lin Jiang further pointed out, “In the past, entrepreneurs have always put their own business Profits are 'takes all', 'eats all', and 'gets enough.' This is because companies only do OEMs, but once they do domestic sales, the core of this culture will have to change: the profits of entrepreneurs need to be redistributed, There is money to earn from the top to the bottom, and it is necessary to let profits be given to workers. Only when the masses of the people have money will they fundamentally stimulate the consumption of local brands."
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