China's 'shoe capital' Wenzhou shifts from 'OEM center' to innovative hub
Photo taken on April 2, 2023 shows the fashion shoe town in Wenzhou, East China's Zhejiang Province. Photo: Xie Jun/GT
Walking in the "fashion shoe town," a planned 3.7-square-kilometer area in Lucheng district of Wenzhou, East China's Zhejiang Province, one would find shoes and related items almost everywhere.
The town, which is the heart of Wenzhou's 100-billion-yuan shoemaking industry, is now home to a large number of shoemakers, ranging from about 100 large-scale companies to small footwear shops and markets.
Wenzhou's reputation as one of China's biggest shoemaking bases has a long history. In 2001, it was awarded the honorary title of "China's shoe capital." Last year, the city's shoe industry achieved a total above-scale industrial output value of about 42 billion yuan ($6.1 billion), rising by 7 percent.
Currently, Wenzhou is home to more than 4,000 shoe companies and produces about 1.3 billion shoes each year. Almost one in every seven pairs of women's shoes around the world is produced in the city, Xinhua recently reported.
However, the shifting global geo-economic landscape is also bringing new challenges, with some facing pressure to relocate to other countries. Facing such challenges and in line with China's push for high-quality development, the city is also aiming to upgrade its shoe industry from just completing prescribed orders to being innovative.
Juyi Group, a 35-year-old Wenzhou-based firm, exported about 15 million pairs of shoes to overseas markets, including Germany, France, Spain and the US, last year, up by 51.6 percent. The company produces shoes for some of the most well-known global brands.
When China's manufacturing industry came under pressure from COVID, an uncertain geopolitical situation and other challenges, one secret behind Juyi's success is its active application of advanced technologies to the traditional shoe assembly lines.
Zhu Henglin, manager of the enterprise management department at Juyi Group, told the Global Times that Juyi has a long history of applying advanced technology. It has used 3D printing technologies back in 2009 to facilitate communication with overseas clients. In 2021, the company started to use a set of intelligent machinery imported from Italy to create a digital workshop.
The Global Times visited this workshop and saw shoes being produced on the smart assembly lines one after another, with machines and workers working together seamlessly.
According to Zhu, the intelligent production line produces about 200-250 shoes per hour and involves about 22 workers. Before its application, one production line required about 55-60 laborers, producing about 300-350 shoes each hour.
"It enhances productivity by about 30 percent compared with traditional manual assembly line," Zhu said.
According to Zhu, the advantages of investing in intelligent production is more than productivity. "It is a manifestation of standardized production, something that overseas clients attach great importance to. Besides, it is also a big attraction to a younger generation, who are otherwise reluctant to work on a factory floor."
Wenzhou shoemakers' efforts to embrace innovation is not just restricted to using advanced technologies in production lines. Instead, it covers innovation across almost every link of the shoe business, including designing, production, marketing and logistics.
In "fashion shoe town," the Global Times saw a cluster of shoe-related organizations, not only factories but also several local research institutes. They also developed a real-time management system for production information called MES, which is used by firms to enhance production efficiency.
At the Wenzhou Entrepreneurs Forum held on Monday, advanced manufacturing was the buzz word, with multiple experts making suggestions on how Wenzhou should grasp the opportunity of China's industrial upgrade to improve the strength of its manufacturing industry.
"After 2009, the traditional Wenzhou model which is characterized by labor intensive production has changed in a positive way, with increasing input by Wenzhou merchants in technological innovation and research. But I think such input is still not enough, particularly in basic research," said Wang Yiming, former deputy head of the Development Research Center at the State Council at the forum.
He suggested that the business community in Wenzhou should further consider how to use advantages in capital to improve technological content and quality.
Pan Yuxiang, general manager of Wenzhou-based shoemaker Wenzhou Ruixing Shoes Co, told the Global Times that for most of Wenzhou's shoemakers, intelligent manufacturing is still at a "starting phase," as companies, particularly those smaller ones, have to compare the costs and benefits of applying advanced machines to their assembly lines.
Many have started to try, including his firm. According to Pan, Ruixing has already introduced advanced machinery like robotic arms and automatic cutting machines into their production lines. They also have a special team in charge of technical optimization.
"I am still experimenting (on intelligent production)," he said, stressing that he wants to pick the machines with the highest cost-effectiveness to achieve their best results. He also suggested that leading companies in the industry should share their data on intelligent manufacturing, so that local factories can be more "precise" when buying those equipment.
Meanwhile, Wenzhou's shoemaking industry, like many other manufacturing industries in China, also faced new challenges, due to a volatile geopolitical situation, COVID-19, rising competition in domestic and overseas markets.
In particular, local business leaders told the Global Times that they are under pressure to shift plants to overseas markets due to requests by some overseas clients or cost concerns. But China's manufacturing sector has its own unique advantages.
According to Zhu, the costs of setting production lines in overseas markets like Southeast Asia are on par with or even higher than China, mostly because overseas markets' supply chains are not as complete as that of China.
Neither Zhu nor Pan thought that it would be very easy or fast for this kind of industrial relocation to take place, as Wenzhou is beefing up efforts to strengthen its role as a shoe manufacturing hub in recent years.
Take Juyi for example: Zhu repeatedly mentioned the phrase "taking initiative" when explaining their business strategy. "In the past, we only took samples from overseas clients and produced them according to their requirements. Today, we also design shoes and plan sales along with our partners. By taking initiative in our hands, we actually have grown into a brand instead of just an OEM factory," he said.
Pan also said that with an improving business environment, increasing government support for the shoe industry, and lower production costs due to intelligent production, it's unlikely that any country can replace China's manufacturing supply chains, even though some light assets might relocate.