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April Updates of the Export of Wenzhou Shoes to EU

It has been over one month since the European Union terminated its anti-dumping tariffs imposed on China-oriented leather shoes at the end of March this year. However, the export of Wenzhou leather shoes to EU does not rocket in April, but the average unit price of those exported shoes has greatly risen for the first time since the year of 2008 to USD 11.20, a 17.89% year-on-year growth.

According to statistics from Wenzhou Entry-Exit Inspection and Quarantine Bureau, the total export of Wenzhou-oriented leather shoes in April reaches USD 60.8 million with 5.088 million pairs exported, among which the export to EU accounts for USD 16.39 million for 1.464 million pairs, rising by 5% in the amount and by 24.1% in the value respectively.

Due to the expiration of EU’s anti-dumping tariffs on March 31, 2011, many industry insiders once worried about the rocketing of leather shoes export to Europe afterwards, which might incur EU’s much stricter anti-dumping measures. However, considering the April export of Wenzhou shoes to EU, it cannot be described as rocketing. Still, some Wenzhou shoes makers like Juyi Group and Aokang Group have seen a great rise of their orders from EU this year. For example, Juyi Group, one of the only two shoes exporters in Zhejiang Province which export more than USD 100 million’s shoes annually, has received more orders of leather shoes from EU along with the end of EU’s anti-dumping measures. In the first quarter this year, Juyi’s export of leather shoes to Europe has reached 500,000 pairs, while the total figure of last year as a whole was only 600,000 pairs. Another winner is Aokang Group, a big partner of GEOX, whose orders on Aokang has grown by nearly 70% in the first quarter on an annual basis. As some industry insiders point out, the period from receiving an order to delivery generally lasts two or three months, so those newly-added orders from EU will be reflected in the export figures in May and June.

Some insiders predict, though EU’s anti-dumping measures against China-oriented shoes have come to an end, the growth of Wenzhou’s leather shoes to EU will still stay at a limited level in the long run. On one hand, the average unit price of Wenzhou’s leather shoes to EU goes up by 17.89% year on year, which is even higher than the 16.5% anti-dumping tariff. For European buyers, it means the ending of the anti-dumping tariffs has not made their purchase costs down. On the contrary, they have to pay more. In this way, their willingness of purchase expansion is partly lowered.

On the other hand, the profit margin of Wenzhou’s shoes exporters has narrowed due to a high rise of different costs, which reduces their desire to develop the European market. Although the average unit price of exported shoes has seen a certain rise, the growth is still far behind the rocketing material and labor costs. Meanwhile, the frequently changing exchange rate adds more pressure to Wenzhou shoes makers’ profitability. Comparing with the average unit price of Wenzhou’s exported leather shoes as a whole, the price of those leather shoes to EU is still at a lower end.

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