China's shoe industry breakthrough path: brand building to enhance added value.

The advantages of export competitiveness remain, and industrial upgrading is imperative. China’s rich raw material resources, sound industrial chain, huge processing capacity, sound sales and marketing network, political and social stability, and other comprehensive advantages that contribute to the sustainable development of the industry are difficult for other countries and regions in a short period of time. replaced. However, it cannot be denied that with the increase in labor costs and the expected appreciation of the renminbi, China’s competitive advantage has indeed gradually weakened. The large export volume but low added value is the biggest weakness of China's footwear export industry. Adjusting the industrial structure, increasing the added value of products, and shifting the business focus from production to processing to the promotion of brand value as the dominant business strategy contributes to the long-term competitiveness of Chinese shoe companies.

Export demand gradually recovered, but long-term growth slowed. The U.S. economy is in a good situation, residents’ purchasing power is beginning to recover, and will help boost industry exports. The trend of strong export orders in the first quarter of the industry is expected to continue, but the euro zone’s economic outlook is the biggest uncertainty, bringing about certain recovery in the export market. risk. We predict that the growth of footwear exports to the EU in the second half of the year will slow to 5-10%.

The domestic market has broad prospects. Consumption upgrades promote retail growth. The continuous increase in residents' income and the upgrading of consumer structure will lead to the growth of apparel and footwear retail sales. The low-end products will benefit from the rapid growth of consumption in third-tier cities and the high-end products will benefit from the growth of middle-class groups. With the deepening of brand awareness, companies with brand advantages will lead the market, and establishing a brand corresponding to the market ladder will become an important factor for enterprises to obtain long-term competitiveness.

Industry investment strategy: The industry's upstream manufacturing and processing companies are using low-cost, old-model business strategies that are no longer suitable for the long-term development of the company. Enhancing R&D and innovation capabilities and increasing product value added and brand value are the breakthrough paths. At the same time, relying on the extremely promising domestic market with a population of 1.3 billion people, actively building strong brands that correspond to market demand levels and establishing a sound retail network will be the opening stone to the downstream of the industry.

Industry rating "synchronous", with high added value and strong brand company recommendation: Upstream company Jiuxing Holdings, the company's solid foundation, with technology and brand advantages, is a high value-added enterprises, the mainland has high prospects for high-end retail business, through the long-term market correction opportunities Buying; Downstream company Daphne has great potential in the third and fourth tier cities and low-end rural markets. The brand is operating maturely and has a high market share. Compared with its peers, its future growth is relatively high, but its current valuation is low, which indicates that it is concerned and not rated.