Average price of Wenzhou shoes exports: a pair of 6.16 US dollars exports the overall trend is good

According to the latest data from the Wenzhou Entry-Exit Inspection and Quarantine Bureau, the average unit price of footwear exports in Wenzhou from January to August was US$6.16, a year-on-year increase of 22.22%. However, most shoe companies stated that in the case of rising export volume and price, corporate profits have not increased, and exchange rates, commodity prices, and labor costs have made it increasingly difficult for businesses to do business.

The increase in export unit price data shows that from January to August, Wenzhou footwear products were qualified for inspection and quarantine and exported 76,600 batches of 540 million pairs and 3.327 billion dollars, and the volume and value of goods increased by 7.13% and 23.65% respectively; the average export unit price was 6.16 dollars. The average unit price in July and August reached US$7.32.

According to Zheng Shili, Party Committee Member of the Golden Emperor Group Co., Ltd., from January to July this year, the value of Kingdee's exports reached 85.23 million US dollars, an increase of 33.8% over the same period of the previous year. Exports to the EU market increased significantly compared to the same period of last year, an increase of 38%. According to Zhu Jianyong, chairman of the Golden Emperor Group, the main export product is women's shoes, which are priced at around US$10. It is estimated that this year’s export value will be US$150 million, which will increase by about 30% from last year.

No increase in profits of shoe companies Although the export volume of footwear, especially the export unit price, has increased significantly, most companies have indicated that profits have not risen or even declined. What is the reason for this situation?

Zhou Yaohua, deputy general manager of Dongyi Shoes Co., Ltd., told reporters that the increase in the unit price of export shoes could not keep up with the increase in cost. “At present, the three big mountains that are under pressure to export companies are changes in the exchange rate, the increase in raw materials, and the labor costs.” He said, “The exchange rate changes greatly, the increase in raw materials is much higher than the increase in export unit prices, and labor costs are increasing. The increase of more than 20% has squeezed corporate profit margins."

Pan Yizhong, general manager of Juyi Group, said that part of the increase in exports has been consumed in cost. Large enterprises can retain some profit margins under the support of effective management and stable orders. The problems faced by SMEs are even more severe. Charlie Chen, the general manager of shoes, admits that shoes are no longer profitable.

According to industry sources, the export of footwear products needs to undergo a series of tests and inspections, and these expensive testing costs are paid by the manufacturer. “European countries have continuously introduced new trade protection measures and now even some raw materials are required to be tested,” said Zhou Yaohua.

The overall trend of exports is good. It is understood that there are 151 footwear exporting countries in Wenzhou, of which the export volume is the EU first, followed by the United States, Germany and Russia. Although the EU market due to the entire economic development factors led to a decline in demand for Wenzhou footwear, but the overall trend of footwear exports in Wenzhou this year is still good.

Xie Yufang, executive president and secretary general of the Wenzhou Shoe Industry Association, told reporters that the increase in the unit price of footwear exports indicates that the added value of footwear in Wenzhou has increased. Although the growth rate of the export volume has slowed down significantly this year, the overall status is still healthy. In 2010, Wenzhou’s footwear exports totaled US$3.74 billion. In the first eight months of this year, it has exceeded US$3 billion. As long as companies do a good job in branding, quality, and style, the market is still promising.