Hongmin International Group Co., Ltd. (hereinafter referred to as “Hongmin Group”), located in Huadu District, Guangzhou, is one of the many foreign trade shoe companies whose orders have been greatly reduced this year due to the impact of the epidemic. In April of this year, the company began to adjust its direction, hoping to recover lost orders in the domestic market. However, from building a factory to building a brand, Hongmin Group needs to face problems such as unfamiliar markets and different production rhythms.
A person who is responsible for investigating the situation of Guangzhou shoe companies and submitting reports to government departments told the reporter of Economic Observer that the survey in the early stage of the impact of the epidemic showed that 80% of the orders of more than 150 small and medium-sized shoe companies were cancelled, 20% were postponed, and some About 40% of enterprises are expected to lose 100,000-500,000 yuan this year, about 30% are expected to lose 500,000-1 million yuan, and about 10% are expected to lose more than 2 million yuan. As of September, most companies have restored 40% to 60% of their orders, and the overall pressure is still high.
On the afternoon of September 24, Hong Wenjie, the person in charge of the company’s domestic project DEAL brand, was interviewed by a reporter from Economic Observer.com and talked about some of the changes they have experienced in the past few months-
Economic Observation Network: How did you start preparing for the DEAL project, and what is the current progress?
Hong Wenjie: Our group is an OEM enterprise with more than 20 years of experience. It started with a single store, and then moved to wholesale stalls and then to factories. Now it is a mid-to-high-end brand of men’s and women’s leather shoes and casual shoes. The brand customers include ALDO, le saunda, etc. The main exports are the United States, Italy, Canada, the United Kingdom and other regions, with annual sales of nearly 10 million pairs.
In fact, the chairman wanted to open up the domestic market since last year, but he was undecided at that time, because it was relatively simple to do foreign trade, and he was used to it for so many years, so there would be a lot of hesitation about the change. At the beginning, I just wanted to try it out, and the resources given to the brand did not match. However, under the influence of the epidemic this year, the company’s orders have been greatly reduced, forcing us to officially launch our own brand DEAL from April.
The positioning of this brand is light luxury but the price is close to the people. It is about 200 yuan to 300 yuan. At present, it is mainly a series of small white shoes. It has developed more than 30 types of shoes, and it took about three or four months.
Economic Observation Network: What are the differences between switching to the domestic market and previous operating models?
Hong Wenjie: In the past, Hongmin took orders, produced them, and shipped them out. It was very simple, but to be a brand is completely different from a factory. It is a brand new approach.
In terms of building a team, China’s shoe-making industry is not yet very open. Compared with Japan, Europe and the United States, the overall style series is still relatively small, and the generation of shoe-making people is relatively old. The new one is actually very difficult. The original people in the group are not suitable for us, and it is not easy to recruit senior talents from outside. We hope to find some young people with design school backgrounds and works, but such people usually have better choices and are easy to change jobs.
So, in the end, we decided to use brand new people. Now, about 40 of the more than 50 people in the team are new recruits, and most of them have just graduated, which is more suitable for our long-term training.
In terms of production, this year is a big challenge for us. We used to be To B, and we ordered and shipped batch by batch, but now To C, if we don’t want to carry inventory, we must adjust the production turnover and sell The rhythm of replenishment after completion is different from the rhythm of shipping at a fixed time, which is more difficult.
Also, there are too many homogeneous products in the market now. To put it in a nasty way, if you sell a product well, someone will copy it in less than a week. It’s too fast. If you can’t react to it yourself, you can’t compete at all. This is a phenomenon that is currently not good in the Chinese market. But on the other hand, it takes too much energy for a shoe to go from 0 to 1. The future market requires us to be able to respond quickly, which is also a challenge.
Economic Observer: After the product is made, what is the next focus?
Hong Wenjie: The rest of the time in the second half of the year will focus on marketing, including some visual advertisements, inviting young stars to endorse us, and cooperating with Internet celebrities and live broadcasters on major social platforms to conduct marketing activities such as live broadcasts. As before, Hongmin will attend the Canton Fair, and this year we plan to go to Shanghai Fashion Week.
But I personally have reservations about live broadcasts. In the first half of the year, everyone rushed to do live broadcasts. The boss also felt that it was a vane and hesitated whether to rush to do it. We also know in our hearts that this is a cure for the symptoms but not the root cause, but there is no way to do it.
But in the long run, the traditional low-cost live streaming will do great harm to those who want to be a brand, and it will be even worse in a year or two. Our e-commerce partners also advised us not to look for anchors outside, but to develop our own team of anchors.
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