China shoe market
28.01.2015 21290

China shoe market

In the conditions of currency surges, reducing the margin of business, and falling consumer activity, many Russian entrepreneurs find themselves on the Asian continent in search of new suppliers. As if anticipating such an interest, Chinese suppliers began building the brand made in China, forming large-scale shoe clusters and receiving support at the state level. What is happening on the domestic shoe market in China and will the country's exports continue to grow?

National interest

According to Euromonitor, the average income of the population in China continues to grow, and with it consumer demand for shoes. According to Euromonitor forecasts, the country's footwear market will maintain positive dynamics over the next few years, but the growth rate will not be so impressive. Last year, the growth was 320 billion yuan, or about 52 billion US dollars. In 2012, the consumption of footwear in the medium and above-average segment began to grow, but the average figure for the country is still low - only 1,11 pairs.

Table

Shoe industry in China, (taking into account the first quarter of 2014)


Price volume

Number of pairs

Average check

Turnover (in millions of US dollars)

Place in the world ranking

Turnover (in million pairs)

Place in the world ranking

In $ US

Export

48 145

1

10 577

1

4,55

Import

1 710

14

56

43

30,80

production



14 200

1


Consumption



3 679

1


Male and female footwear consumption patterns are different from each other. Men in China tend to give more importance to the design of the model, giving preference to the classics. Women pay more attention to the conformity of this or that model to world trends. It is quite logical that women are the main consumers of footwear in the country.

According to a survey conducted by Union of Hong Kong Trade Development, in the past 12 months, at least two pairs of leather shoes were bought by almost 84,9% of respondents. The average cost of respondents for each pair of leather shoes was 1075 yuan. Nearly 80% of respondents visit shopping malls and department stores at least once a month, mainly on weekends and holidays.

The plastic shoe market is growing at a slower pace: according to ask.com, 527 shoe factories in China produce shoes made from synthetic materials.

The main consumers of casual and sport footwear are young people aged 18-30, students and office workers. They are quite demanding not only for quality, but also for the brand image, as well as the personality of the model. Among all the products of sports brands, it is footwear that is most important in terms of brand building, its detachment from competitors. In recent years, in addition to the market leaders Nike, Adidas and Li Ning, other local companies such as 361, Anta, Toread have also been gaining momentum.

Internal competition

According to Su Chayung, President of the China Leather Industry Association today, "the main problems of the industry are rising labor costs, labor shortages in some, especially in coastal areas, and fairly high competition from other Asian manufacturers."

To optimize costs and increase profits, many companies are modernizing production, changing management systems. Some large companies have moved their factories from the coastal provinces to the central regions of the country, where labor is cheaper. “The leather and footwear industry in China is in the early stages of restructuring. The entire modernization process will take from one to two years and will lead to the closure of small businesses that cannot meet the high standards of environmental friendliness of production, ”says Su Chayung. “The industry plays a huge role in the development of the national economy, but many businesses have environmental problems that need to be addressed.”

Currently, the country has developed four main clusters of the shoe industry. The first is located in the south of the country in Guangdong province with production centers in Guangzhou and Dongguan. Here are mainly concentrated factories that sew shoes of a high price segment. In the province of Zheyyang, mainly in the cities of Wenzhou and Taizhou, the companies producing shoes of the middle and low price segment are based. Many of them focus on the release of only male models. In the west of the country, in the cities of Chengdu and Chongqing, the shoe industry enterprises produce female models of the middle and low price segment. The fourth cluster is located around the cities of Quanzhou and Jinjiang, local factories focused on the production of sports shoes.

Competition exists not only among local producers, companies from the United States and European countries such as Italy and Spain intervene in the struggle for buyers in China - they dominate the high price segment. Products from joint ventures located in Taiwan and Hong Kong account for the lion's share of mid-range footwear. However, it is in this segment that Chinese manufacturers have managed to strengthen their presence in recent years. But, as before, most local companies compete with each other primarily in the market for cheap footwear. Increased competition has led to further market segmentation. According to analysts, such processes will lead to an improvement in product quality, to a strengthening of the image component of brands.

Export policy

China is the largest shoe manufacturer in the world and exporter. The country shows a significant trade surplus in the shoe market. In 2013, Chinese footwear production reached a new record high of 14,2 billion pairs. Three quarters of them, worth 48,1 billion US dollars, were exported, which was 8,5% more than the previous year. Over the past four years, however, annual export growth has been slightly, but steadily declining.

According to the report of the National Union of Tanners and Shoemakers of China, the leading light industry enterprises in Guangzhou last year recorded an increase in their income. Last 2013, exports amounted to 3,41 billion pairs of shoes in the amount of 13,92 billion US dollars. At the same time, the total number of exported shoes decreased by 5,9% compared with the previous year, but the total value of the exported goods increased by 5,2%.

Anta Group sales increased by 2014% in the first half of 28,3, Qiaodan reported an increase of more than 10%, which was due to contracts with several global brands for sewing batches of shoes. Shoe sales in China in the first half of 2014 increased by 9,6%, reaching more than 50 billion US dollars. According to the same source, shoe exports during the six-month period were 5,3 billion pairs, an increase of about 0,2%, which was 12,2% year on year, reaching $ 24,5 billion. 438 million pairs were leather-mounted, with a value of $ 5900000000 billion (an increase of 15% in volume and 19% in value).

In 2013, the export of shoes from Guangdong to the USA, Africa, Latin America and the EU decreased to one degree or another. These 5 markets account for 76,5 percent of the province’s total shoe exports. Recently, however, there has been a decrease in the export of Chinese shoes to these regions with a simultaneous increase in exports to Africa, ASEAN and the Middle East. Wholesale supplies of shoes from China to Russia are characterized by a stable growth rate.

Key Trading Partners


Price volume

Number of pairs

Average check

Turnover (in millions of US dollars)

Place in the world ranking

Turnover (in million pairs)

Place in the world ranking

In $ US

Export

48 145

1

10 577

1

4,55

Import

1 710

14

56

43

30,80

production



14 200

1


Consumption



3 679

1


The total turnover of Sino-Russian trade in January-October 2014 increased by 7,1% compared with the first ten months of 2013 and amounted to 78,9 billion dollars. The growth rate of Russian-Chinese trade in January-October exceeded the growth rate of China's total foreign trade, which grew by 3,8% in annual terms over this period. Chinese exports to Russia grew in the first ten months of 2014 by 10,1% in annual terms, reaching $ 44,3 billion, imports of Russian goods in China increased by 3,4%, to $ 34,6 billion.

The most popular footwear supplied to Russia from China is considered to be rubber and plastic footwear (most often these materials are used in the soles) - this type accounts for more than 60% of total exports. Also, Russian buyers often order Chinese textile (or rag) shoes. The top three in terms of supplies from China is closed by leather footwear, the share of which is growing every year.

In the conditions of currency surges, reducing the marginality of the business, and falling consumer activity, many Russian entrepreneurs find themselves in Asian countries in search of new suppliers ...
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