Do You Know the “Three Lows” of “Made In China”
Once upon a time, “low labor costs, low rental costs and low raw material costs” are ultimate tools of “Made in China”, and for a time, these three tools were widely popular all over the world. But there were hinder troubles under prosperity. After all, such “three lows” did not have technical contents, so they were easy to imitate and surpass. This sort of hinder danger, at present, has turned out to come true. Adidas, Nike and these world famous brands began to close their factories in China and started to transform to Southeast Asia where was lower than China’s “three lows”. Big but not strong, no high technical content and no strong profitability these things have been factors that troubled “Made in China”. But in the past, we can also console ourselves with “quantity”, and once felt in flooded confidence.
Among Fortune Global 500 companies, Shanghai Automotive Group ranked the first 130 among manufacturing enterprises. Its operating income was 67.254 billion dollars, the net profit was only 3.128 billion dollars, and the net profit margin was 4.65 percent. Lenovo Group, which was technology manufacturing enterprises’ model, ranked 370. The business revenue of it was 29.574 billion dollar, the net profit rate was 1.6 percent and its net profit was 473 million dollars.
For the automotive manufacturing companies, the Germany Volkswagen Enterprise who has strong research and development capabilities possessed the operating income of 221.55 billion dollars. About net profits, it was 214.25 billion dollars, in addition, its net profit margin was approximate ten percent. Samsung Electronics’ operating revenue was 148.944 billion dollars. With regard to net profit, Samsung Electronics’ was 120.59 billion dollars, what’s more, its net profit rate was eight percent. Apple Company, a representative of creation, its operating income was more exaggerated, which was 108.249 billion dollars. The net profit of Apple Enterprise was up to 259.22 billion dollars, and its net profit rate was very staging, which was twenty-four percent.
This was the gap, and where the essence of “Made in China” . To say it honestly, there was cheaper manpower cost. Thus, it became a world’s factory, which was a global famous brand who transferred its backward productive forces. What was the reason that why China was chosen by Nike to build plants. It can be accounted that there were low manpower costs in China. Moreover, its design base never will be going to move to China.
As for the price of a pair of 800 Yuan RMB Nike shoes, its material cost was less than one hundred Yuan. 300 Yuan will be paid as the channel cost, and 400 Yuan will be earned by Nike Corporation. No more than twenty Yuan will be earned by China’s production factory. Of course, during the procedure of OEM, lots of wealthy labor forces will be settled. In the followed ODM (original design manufacture), they can copy their own brand, however, it was not a successful thing.
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