Shoemaking Industry – Why Choose Chinese Shoe Manufacturers

The international shoemaking center has undergone multiple transfers as manufacturing costs change. In the 1980s, the shoemaking center shifted from early-developed countries such as Italy and Spain to the Far East such as Japan, Taiwan, and South Korea. After the 1990s, it gradually moved to mainland China, where production costs were lower. Since 1996, China has become the world’s largest producer and exporter of footwear products.

Although China’s footwear industry is now challenged by Vietnam and India’s footwear industries, it is still the center of the world’s footwear industry. More than 50% of the world’s shoes are produced in China. The advantages of China’s footwear industry include technical advantages, speed advantages, design advantages, and industrial chain advantages.

Shoe Development and Change Process

After more than 30 years of extensive and rapid development, China’s shoemaking industry has accumulated many contradictions and has entered a period of industrial transformation. For example, the export-oriented shoemaking industry, facing the shrinking international market and trade protection measures such as anti-dumping from major market countries, has put great downward pressure on China’s shoemaking industry. While large-scale enterprises have emerged, several small enterprises have closed down.

As early as a few years ago, due to factors such as rising labor costs, raw materials, and exchange rate fluctuations, many shoe companies have transferred their production bases to Southeast Asia. With the full launch of the China-ASEAN Free Trade Area, the shoe industry in Vietnam, India, Pakistan, and other places has developed rapidly.

According to statistics, from January to November 2010, the output value of sports shoes in Vietnam increased by 20.2% year-on-year, and the output value of leather shoe enterprises above designated size increased by 23.4% year-on-year, posing a great potential threat to China’s shoemaking industry.

Although there are many cases of shoemaking enterprises relocating. However, the strength of China’s shoemaking enterprises is still very strong. After nearly 20 years of development, China’s shoemaking industry has established a complete upstream and downstream industrial chain, formed industrial clusters for various shoe production, established a complete shoe finished product and shoe material market, and established a shoe research and development center and information center.

Although China’s shoemaking industry is now also facing the impact of domestic policy factors and rising labor costs, as well as competition from India, Brazil, Vietnam, Indonesia, and other countries in low-end and medium-end shoes, and competition from Italy, Spain, Portugal and other countries in high-end shoes, the comprehensive competitive advantage of China’s shoemaking industry is still unmatched by other countries.

Division of labor pattern

The basic pattern of the international shoe industry division of labor is: shoe enterprises in developed countries represented by Europe and the United States mainly engage in brand operations; shoe enterprises in Southeast Asian countries, including China, mainly engaged in production and processing.

European and American shoe companies take advantage of their ability to accurately grasp international fashion trends and brand operation capabilities to carry out product design and development, entrust shoe companies in developing countries to produce in an OEM manner, and sell through their own marketing networks.

European and American shoe companies put brand maintenance and management in the first place, focusing on brand value enhancement and market promotion, thereby gaining market control and economic benefits.

Southeast Asian shoe companies, including Chinese shoe companies, mainly rely on the advantages of abundant human resources and low labor costs and adopt OEM methods to produce and process for well-known European and American brand shoe companies. The focus is on maintaining customer relationships, implementing strict cost control and quality management, continuously improving production efficiency and expanding production scale, and obtaining economies of scale in production and processing.

Competitive situation

On the basis of focusing on cost control and price reduction, global shoe companies are turning more attention to brand enhancement and marketing network construction.

European and American shoe companies focus on strengthening brand connotation, expanding brand influence, expanding marketing network construction and other competitive advantages; the shoe industry in Southeast Asian countries, in addition to relying on low labor costs, high production efficiency, stable and reliable product quality advantages to participate in the international division of labor, gradually transition to creating their own brands and building marketing networks to enhance all-round competitiveness.

Chinese shoe companies are constantly improving their awareness of brand, management and market. In addition to focusing on their own brands and marketing networks, they are also beginning to go abroad and participate in international competition with their own brands.

The world’s major shoemaking countries include China, India, Vietnam, Indonesia and Thailand in Asia, Italy, Spain and Portugal in Europe, and Brazil in South America.

In 2023, the total revenue of the global shoemaking market reached US$205.8 billion. Affected by the COVID-19 pandemic, global demand for shoes fell to 23.179 billion pairs in 2020, a year-on-year decrease of 3.93% from 2019.

Among them, the production of Asian countries such as China, Vietnam, India, Indonesia and Thailand accounts for more than 85% of the global total production. China has become the world’s largest footwear producer and exporter, producing more than 10 billion pairs of shoes each year, accounting for more than 60% of the global total.

Production and Sales Demand

Since 1985, China’s footwear industry production and sales demand and investment prospects As the earliest industry to be developed and opened up, the footwear industry has developed by leaps and bounds. In 1985, my country produced a total of 1.6 billion pairs of shoes, and in 2005 it reached 8 billion pairs, with an average annual growth rate of more than 28%. From 2005 to 2023, China’s footwear output increased from 8 billion pairs to 12.3 billion, accounting for more than 50% of the world’s total footwear output, and the highest year reached 65%.

More than 70% of China’s footwear products are exported to other countries. After a round of rapid growth in footwear exports, the growth rate began to slow down in 2008. This situation is mainly due to weak market demand in developed countries. However, at the same time, we also noticed that in the sluggish market in developed countries, the market demand in emerging developing countries is high, and exports to these countries still maintain a high growth rate.

Analysis of the development of major countries and regions in the global footwear industry

1. Europe

Europe is the region with the largest shoe consumption in the world, and it is also the region with the largest import scale. The European market is crucial to the global footwear industry. Affected by the new crown pneumonia epidemic, the demand for shoes in Europe fell to 5.094 billion pairs in 2020.

2. The United States

The United States is a major importer and consumer of shoes. In 2020, the demand for shoes in the United States was 2.584 billion pairs, a year-on-year decrease of 8.85% from 2019.

3. Japan

Japan has a total population of about 126 million. The scale of domestic footwear production in Japan is relatively small, and domestic demand is mainly met by imports. In 2020, the demand for shoes in Japan was 694 million pairs.

Why Choose Chinese Shoe Manufacturers

For example, for every 100 pairs of Adidas shoes, 75 pairs come from China. Adidas has been trying to move its production line to Vietnam. After nine years of hard work, the main production line remains in China. Why?

In the era of globalization, multinational companies pursue cost-effectiveness and market competitiveness in supply chain optimization, and Adidas is no exception.

In fact, as early as nine years ago, Adidas has been trying to move its production line to Vietnam. It did have a good honeymoon period in Vietnam, but after nine years of hard work, the main production line remains in China. So, what is the reason why Adidas cannot get rid of its dependence on Chinese manufacturing?

Stable and high-quality production capacity

As the “world factory”, China has a highly mature production system and process standards. This not only ensures the high-quality output of Adidas products but also reduces the defective rate and rework costs. In contrast, although Vietnam’s manufacturing industry has risen rapidly, it is still difficult to match China in terms of technical processes and quality control stability.

Adidas brought the design drawings to Vietnam and mass-produced them in Vietnam. In fact, it did not bring Chinese craftsmanship to Vietnam, but just copied the drawings.

Quick response to the global market

In a fast-paced market environment, brands need to respond quickly to consumer demand. China is not only Adidas’ production center, but also a huge consumer market. Adidas relies on Chinese manufacturing not only because of its high production efficiency, but also because China’s well-developed logistics network can quickly deliver products to all parts of the world.

China’s strong infrastructure construction, especially the modern logistics system, has significantly shortened the time from production to market. This efficiency is not yet achievable in other emerging manufacturing centers such as Vietnam, and has become an irreplaceable advantage of Chinese manufacturing.

Consideration of labor costs

Although China’s labor costs have been rising year by year, Adidas has not migrated production on a large scale. This is because production decisions no longer only consider labor costs, but also comprehensively consider efficiency, quality, and the overall cost of the supply chain.

Although Vietnam has cheap labor, its total cost is not necessarily lower than that of China due to the low technical proficiency of workers and lower production efficiency than China. At the same time, the hidden costs brought by the migration of production lines and unstable production quality may even exceed the expected savings.

In addition, China’s leading position in intelligent manufacturing and automation has also offset the rise in labor costs with technological progress. Intelligent production not only improves efficiency but also reduces manual intervention, further reducing the time and capital costs of production.

Production decisions are not just a comparison of costs, but also a strategic comprehensive choice.

• 1. China has a complete shoe supply chain, including fabrics, soles, shoe molds, and raw material extraction for fabrics and soles.
• 2. Strong infrastructure, including sufficient power supply and modern logistics systems.
• 3. Chinese workers have strong execution capabilities and can provide stable and high-quality shoes.
• 4. China’s leading position in intelligent manufacturing and automation.

With the continuous development of science and technology and society, the global economic environment is constantly changing. The price of global labor is constantly rising, which is a great challenge for the footwear industry, which requires a large amount of labor. In addition, the rapid development of the technology and electronics industry has also had a great impact on the industrial structure of the foreign trade footwear industry.

The global footwear processing and manufacturing industry must transform from a quantity-oriented to a quality and efficiency-oriented one and industrial upgrading is the only way to go.

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