You will be redirected back to your article in seconds
Skip to main content

Footwear Exec Talks Sourcing in Inland China

As work wages along China’s coastline increases and the country’s shrinking workforce shifts from labor-intensive industries, like footwear, to sectors with better-priced and higher-end products and services including electronics and tourism, footwear manufacturers are asking, “What is the next China?”

China and its uncertain future as a nerve center for footwear manufacturing was a hot topic during the final day of the Footwear Distributors and Retailers of America’s (FDRA) Footwear Sourcing Intelligence Summit in New York City. The summit, held July 29-30, keyed in on ways manufacturers and retailers can create supply chain visibility and drive down risk, and examined footwear sourcing options country-by-country.

A live poll of the summit’s attendees revealed that their companies’ source 70 percent to 99 percent of its footwear from China, however, most said they plan to add new lines outside of the country. More than half of the respondents reported it would move production to the interior of China.

According to Desmond Wong, executive vice president of operations of Topline Corporation, makers and designers of private label and branded footwear, all signs point to Jiangxi as footwear’s next destination in China. Located in the Southeast region of the country, further inland than current footwear hubs Guangdong, Fujian and Zhejiang , Wong said Jiangxi is ripe for development with a pool of more experienced workers and a labor force that is more stable and local than in coastal provinces.

Related Stories

“Workers move out of the coastal areas, get married, have kids and then re-enter the workforce,” Wong said, noting that the average worker age in Jiangxi is 40 years old and is less likely to live in factory dormitories. He reported that workers in Jiangxi on average have more than 15 years of work experience, compared to the 5 to 7 years employees have in Guangdong–and they earn less. The average monthly market wage in Jiangxi is $242, compared to $290 in Zhejiang and Guangdong.

The region is also equipped to produce a variety of footwear spanning leather boots and ballet flats to more casual EVA product. Although Jiangxi’s factories are small–typically a 4 to 5 line facility–Wong said there is room to grow.

Wong quipped, “Before we pack out bags and move to Jiangxi, we need to look at its challenges.” Namely, the region’s infrastructure and distance from the coast present problems. Trucking materials and products to Shanghai can take up to 10 hours, resulting in longer material lead time and higher transportation cost, however, Wong believes that as the industry moves inland, Chinese government will eventually work to improve highways and railroads.

Additionally, the region lacks experts in product design and management, and confirmation sample teams remain along the coast. Wong noted that Jiangxi also has a shortage of CPSC accredited third party labs, which will ultimately mean a longer turnaround time for legal and customer required RSL and testing.

Still, Wong said these are not new challenges and the footwear industry has overcome similar obstacles in the past, including when it moved production away from Taiwan. He added, “I believe the industry is resilient and can work as a team to make the transition inland a successful one.”