Adidas Was Forced to Relocate Its Factories

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. Hinder dangers, however, existed under prosperity. After all, such "three lows" did not have technical contents, so they were easy to imitate and surpass. Now, this kind of hinder trouble has become a reality. Compared with the "three lows" in China, there was lower one in Southeast Asia, so some world brands, such as Adidas and Nike decided to shut down its factories in China. There were no big, strong and high technical contents, and poor profitability, and these factors have been puzzling "Manufactured in China". In the past, however, it was possible for us to take "quantity" as consolation, and once we were full of 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. Its operating income was 29.574 billion dollar, the net profit was 473 million dollars, and its net profit margin was 1.6 percent.

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. Its net profit was 214.25 billion dollars, and its net profit rate was nearly ten percent. As for business income; Samsung Electronics' 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. As a representative of production, Apple Enterprise's operating revenue was 108.249 billion dollars. Its net profit reached 259.22 billion dollars, and its net profit margin was twenty-four percent, which was very astonishing.

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. The reason was that the labor costs in China were cheap. In addition, its design headquarter definitely will not move to China.

A pair of Nike shoes which needed 800 Yuan RMB, however, no more than one hundred Yuan will be paid for material cost. Its channel cost was less than 300 Yuan, and Nike Company will earn 400 Yuan. No more than twenty Yuan will be earned by China's production factory. Yes, we can solve the problem of many affluent labors during the process of OEM. China even can produce its own copied brand in the subsequent ODM (original design manufacture), but can this be called success.