The fierce competition faced by China's footwear industry in Southeast Asia and other countries

When companies are seeking export breakthroughs, they face competition from multiple countries such as Cambodia, Bangladesh, Vietnam, Pakistan, India, and Sri Lanka.
According to reports, in the European and American shoe market, products mainly come from China and Southeast Asia.
From 2003 to 2015, the wages of Chinese shoe workers increased by 3.5 times in the past decade, especially after the financial crisis, where labor costs rose rapidly. The central parity rate of the RMB against the US dollar has accumulated an appreciation of over 30%, and with the increase in other costs, profits have been basically eroded. At present, China's shoe price advantage has been lost and it has fallen into an unprecedented predicament. Many large shoe factories in Dongguan and other shoe manufacturing bases have seen a sharp halving of their workers, and 30% of orders have been transferred to Southeast Asian countries.
In terms of shoe materials, a considerable portion of them are still shipped from China, but since the official establishment of the China ASEAN Free Trade Area, they have been able to enjoy tax exemption in recent years, which has significantly reduced costs. When production conditions are almost the same, labor costs differ by about twice. Overseas customers are increasingly fond of placing orders in Southeast Asia, and in order to meet their needs, the number of production lines transferred from mainland China to Southeast Asia is increasing. Taiwan funded enterprises The trend of enterprise transfer is particularly evident The above-mentioned Nike OEM factory manager stated that the current cost pressure is seriously troubling the mainland footwear industry.
The person in charge also introduced that currently, the monthly salary of workers in the eastern coastal areas of mainland China is about $500, Indonesia is about $300, and Vietnam is only about $250. For shoe companies, after the production line is transferred to Southeast Asia, the average wage expenditure per worker can be saved by $2000-3000. If it is a factory with 10000 employees, it can save labor costs by $20-30 million per year, which is very considerable.
The labor force in Southeast Asian countries is relatively cheap, especially with lower tariffs and lower rent. Some countries such as Bangladesh and Cambodia even implement zero tariff policies, and recently announced foreign trade policies. The focus of the new policy is to promote shoe exports. This has put China at a disadvantage when competing with these countries and regions for foreign markets.
According to analysts from the Chinese footwear industry, Europe, America, and Hong Kong are old established markets for Guangdong's footwear exports, which are not subject to significant changes in the overall environment. However, there is a trend of shrinking market share.
Some argue that although China has certain advantages in design, craftsmanship, and other aspects compared to these countries and regions, it must also be acknowledged that these countries and regions are striving to narrow the gap with China, and competition from these countries and regions cannot be underestimated.
In addition, shoe companies have been plagued by a significant increase in raw material prices, rent, and labor operating costs. At present, there have been many orders flowing to competitors such as Vietnam, Cambodia, and India.
                                                                                                    

Guangdong Shoe Machinery Association
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