Making the shoe fit

Newly-produced shoes are transported to distribution centers. Provided to China Daily

Currency appreciation, rising labor costs and tighter environmental rules have cut into Wenzhou shoe-making companies' profits and have forced them to change business strategies, focusing more on quality and brand building, Yu Ran reports.

Lee Fung Shan, a 33-year-old Hong Kong businesswoman, may never be able to get used to the dusty roads, honking horns, traffic and people speaking a dialect that's as alien to her as Swahili, in this boom town by the ocean in Zhejiang province.

But having worked in Wenzhou for nearly six years, she has never been bored. "Everything changes so fast here," Lee said. "I have a hard time catching up with it although I came from a city that's known for its fast pace," she added.

Indeed, the transformation from a sleepy, sea-side rural town to an industrial powerhouse in less than two decades has won Wenzhou the widely circulated accolade "haven for entrepreneurs," among many others, some of which aren't so complimentary. Now, the city's entrepreneurs, who have amassed fortunes in shoe manufacturing, clothing and special industries, are finding that daring, brawn and hard-work are no longer enough to make their fortunes grow.

A combination of factors, including currency appreciation, rising labor costs and tighter environmental rules, have cut into their profits. What's more, declining demand in overseas markets, particularly the United States and Europe, is choking their businesses.

The quick mind that was honed in the Hong Kong factory where she worked before coming to Wenzhou stands her in good stead now. As general manager of a German shoe importer, R&N GmbH, Lee finds that her main job now is to convince her Wenzhou suppliers to change and adapt. "They must realize that the good times are over and they will have to invest in design and innovation," she said. "The days of bulk manufacturing in the cheap are gone," she added.

In the past six years, Lee had spent most of the time discussing with local manufacturers how to raise the quality of their products.

"The key problem among the majority of the shoemakers in Wenzhou, is that their products are similar in style and quality but compete only in price, and that should be changed to place more focus on quality and brand building instead," said Lee.

She added that it is quite difficult to find a suitable manufacturer to produce high standard shoes in a short time, with reasonable prices, because quality monitoring in the factories is not stabile if there are too many orders being produced at the same time.

Talking about the local businessmen, Lee said she was quite delighted that she had the chance to make so many kind and generous friends among her business associates.

"I'm glad to find out that business partners also can be good friends in their daily life. to offer help from time to time during my stay in Wenzhou," said Lee.

Lee added that more Wenzhou businessmen are open-minded and accept Western style products to fit the European market, which is definitely a sign they are ready to move forward to the world stage.