Uitic 18th congress intro su chaoying presentation

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The Status of China’s Leather and Footwear Industries Su Chaoying CLIA

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The Status of China’s Leather and Footwear Industries

Overview

2013 was a year of slow growth in economy but under high pressure. China’s GDP growth slowed to 7.5 percent in the second quarter of 2013, down from 7.7 percent in the first quarter, partly caused by the industrial sector, which faces overcapacity and weakening foreign demand.

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The Status of China’s Leather and Footwear Industries

Overview

In spite of a slowdown in the economy growth, China’s leather and footwear industries remain a modest growth.

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The Status of China’s Leather and Footwear Industries

Overview

Gross value of the output of leather, footwear and leather products industries: USD170 billion in 2012, increased over 14% from previous year.

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The Status of China’s Leather and Footwear Industries 

The Export and Import (2010-2012, million USD)

Export: USD76.1billion last year, up 9.8% than previous year. Import: USD7.8billion, increased by 5.8%.

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The Status of China’s Leather and Footwear Industries 

Overview

in the first eight months of this year: the sales revenue of leather and footwear industries increased by 11.36% yearon-year.

 the export of the first eight months of this year totaled USD 

52.8 billion, increased by 9% year-on-year. the import reached USD 5.6 billion, up 6.4%.

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The Status of China’s Leather and Footwear Industries

Overview

the leather and footwear industries employee approximately 5 million people. produce some 850 million square meters of finished leather. of which nearly 24 million square meters of finished leather went to overseas market. 150 million sqm of finished leather were imported.

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The Status of China’s Leather and Footwear Industries

Footwear Industry

Production and consumption in 2012 -- 13.3 billion pair of shoes in 2012 -- consumption of nearly 3.3 billions of pairs -- per capita’s consumption:2.5-2.7 pairs 

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The Status of China’s Leather and Footwear Industries

 Footwear

Industry

Growth rate of production/consumption/export/import

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The Status of China’s Leather and Footwear Industries

ď Ź Footwear

Industry

Retail sales growth of shoes and hats in selected department stores

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The Status of China’s Leather and Footwear Industries

 Footwear  

 

Industry

Number of manufacturing companies and output value It is estimated that in 2012 there were 4,008 enterprises whose annual sales revenue is more than USD3.3 million. Among them, the number of companies producing leather shoes accounted for 59% . The output value generated by those companies accounted for 60% of the total. 11


The Status of China’s Leather and Footwear Industries

 Footwear 

Industry

Number of manufacturing companies and output value

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The Status of China’s Leather and Footwear Industries

 Footwear 

Industry

Along with the rising cost and labor shortage in costal areas, part of production capacity has been transferring from costal provinces to central and western areas gradually.

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The Status of China’s Leather and Footwear Industries

 Footwear 

Industry

According to the statistics, in the first half of this year, the growth rate of output value in Zhejiang and Guangdong, both are located in costal areas are much lower than national average level. while the provinces and cities in central and western areas such as Henan, Hunan and Chongqing achieved higher growth rate of between 30-40%.

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The Status of China’s Leather and Footwear Industries

 Footwear

Industry

• Footwear transfer

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The Status of China’s Leather and Footwear Industries

Footwear Industry

Exports in 2012, China exported 10.07 billion pair of shoes and USD 44.4 billion , up 2.0% and 12.7 % respectively than last year. of which, rubber shoes contributed the most in terms of value which was USD 18.8 billion. followed by leather shoes which was USD 10.9 billion

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The Status of China’s Leather and Footwear Industries

Footwear Industry

Imports Last year, the imports of shoes achieved 50 million pairs and USD1.5 billion. up 21.5% by volume and 18.1% by value than previous year.

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The Status of China’s Leather and Footwear Industries ď Ź

Exports/Imports of Footwear 2011

2012

10,000pairs / 1,000USD

987,270 39,369,786

1,007,152 44,363,704

change(%, volume) (%, value)

2.4 17

2 12.7

4,141 1,288,961

5,033 1,522,130

31.1 52.7

21.5 18.1

Exports

Imports 10,000pairs 1,000USD change (%, volume) (%, value)

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The Status of China’s Leather and Footwear Industries

ď Ź

Exports/Imports of Leather Shoes 2011

2012

10,000pairs / 1,000USD

91,203 10,947,828

83,648 10,925,563

change(%, volume) (%, value)

-8.9 4.7

-8.3 -0.2

10,000pairs 1,000USD

2,036 901,412

2,283 1,053,411

change (%, volume) (%, value)

30.6 57.6

12.1 16.9

Exports

Imports

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The Status of China’s Leather and Footwear Industries 

Footwear Industry

Imports and Exports in the first eight months of this year, the exports of footwear were 7.1 billion pairs and USD30.8 billion in value, up 3.7 % and 6.9 % year-on-year respectively. of which, leather shoes were 550 million pairs and USD 7.5 billion in terms of value, decreased by 2.3 % in quantity and increased by 3.3 % in value.

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The Status of China’s Leather and Footwear Industries 

Footwear Industry

Imports and Exports at the same time, the imports of footwear were 36.8 million pairs and USD 1.1 billion in terms of value. increased by 6.1 % and 7.3 % from last year respectively. of which, leather shoes were 15.5 million pairs and USD780 million, increased by 3% and 9% than last year respectively. over the last 10 year, the share of export of leather shoes has been down from 45% to 25% in terms of value.

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The Status of China’s Leather and Footwear Industries

Exports by Type of Footwear by Value in 2012

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The Status of China’s Leather and Footwear Industries 

Top 5 exporting destinations of footwear

USA 28.7%

Others 46.6% Japan 5.6%

UK 3.9%

Russia 4.4% Germany 4.0%

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The Status of China’s Leather and Footwear Industries 

Top 4 importing destinations of footwear

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The Status of China’s Leather and Footwear Industries 

Footwear Industry

Top brands in China’s market top five leading brands for lady shoes : Belle, TATA, Teenmix, C-banner and Staccoto. for man shoes: Goldlion, ECCO, SATCHI, Playboy and

Pierre Cardin.

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The Status of China’s Leather and Footwear Industries 

Footwear Industry • leading brands in China

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The Status of China’s Leather and Footwear Industries 

Challenges facing Chinese leather and footwear industries

The weak consumer demand in the EU and the slowly recovering market in the US have created uncertainty in the China leather and shoe sectors. This is compelling some companies to focus more on the domestic market which continues to expand. The transition is not always easy as the domestic market is highly competitive and may require more marketing skills than servicing the OEM sector.

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The Status of China’s Leather and Footwear Industries 

Challenges facing Chinese leather and footwear industries

the lack of skilled labor and growing labor costs in south-eastern China will force some companies to relocate their production from coastal provinces to the interior areas to secure a stable and cost effective workforce. the average wage in the coastal areas is USD450-600 per month approximately, up 10-15% against 2011. production costs increased by nearly 20% in 2012. This was due to the higher price of raw hides and materials.

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The Status of China’s Leather and Footwear Industries

Challenges facing Chinese leather and footwear industries

strict environmental policies have brought a big pressure to the tanning sector. a new standard for waste water discharge in the tanning industry will come into effect by the end of this year, which will set stricter requirements on waste water discharge and air pollution.

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The Status of China’s Leather and Footwear Industries 

Anticipation for the next few years

To sum up, coping with the challenges of sustainable development in the next 5 years, China’s leather and footwear industries must change their development model from a quantity to a quality oriented mode.

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The Status of China’s Leather and Footwear Industries

 Anticipation 

for the next few years

the industry will not continue to expand its production capacity as it has done over past 10 years but pay more attention to quality and innovation. the volume of finished leather in 2013 will basically remain the same level as what it has achieved previously, but the added value will increase steadily. growth rate of export in 2013 will be no more than 10%,while that of imports will be higher than export in next few years. 31


The Status of China’s Leather and Footwear Industries

 Anticipation 

for the next few years

Considering China’s strict environmental policies, the demand will be at a high level for -- cleaner technologies -- environmentally friendly chemicals and -- equipment with less energy/water consumption.

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The Status of China’s Leather and Footwear Industries

 Anticipation 

 

for the next few years

the rapid progress of urbanization will stimulate consumption for middle and high end finished leather products. It is anticipated, therefore, that the market share of high end finished leather will increase to 20% from current 15%. while the medium quality finished leather will rise from current 45% to 50% by 2015. E-commerce: new revenue sources and opportunity for footwear industry. 33


Thank you

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