Tensions Between China And The US Will Be Shifted To Southeast Asia In The Second Half Of The Year.

In September 10th, Yuyuan group, the world's international brand sport shoes and casual wear shoes manufacturer, announced the August earnings announcement. The announcement shows that the net operating income of the group in August was $840 million, and the net cumulative operating income from January 2019 to August 31st was $6 billion 708 million.


Yuyuan group has been a major manufacturer of sports shoes and clothing brands such as Nike group and Adidas group. Last year, Yuyuan group's Yuyuan Industrial and Baosheng international recorded a total sales of US $847 million 800 thousand and US $2 billion 1 million 400 thousand respectively. Just last week, Yuyuan group also released the interim report in 2019: its operating income is about 5 billion 70 million dollars, gross profit is about 1 billion 272 million dollars, and its profit margin is about 195 million dollars.


According to the financial report, Yuyuan group's business income is mainly divided into manufacturing revenue and retail business income, which are 2 billion 930 million US dollars and 2 billion 139 million US dollars respectively. From the category, sports shoes earn 2 billion 101 million dollars, accounting for 41.4% of the total income; leisure shoes and outdoor shoes earn 530 million dollars, accounting for 10.5%; sports sandals earn 59 million 100 thousand dollars, accounting for 1.2%; shoes, accessories and other income 240 million dollars, accounting for 4.7%; wholesale clothing (TCHC group) income 172 million U. S. dollars, accounting for 3.4%; retail sales - footwear, clothing and rental income is 1 billion 970 million dollars, accounting for 1 billion 970 million.


Yuyuan group said that in the first half of 2019, the group faced various adversities, especially the US threat to impose tariffs on shoes made in China, and many customers changed their purchasing strategies under the uncertain factors of Global trade friction, accelerating the adjustment of the capacity of the national allocation during the current period, and continuously facing the brand customers' demand for more flexible purchasing methods, as well as the business attacks and challenges caused by changes in consumer preferences. All these factors have led to fluctuations in monthly orders, instability in capacity utilization, reduced production efficiency and complex and varied product mix.


In order to meet the challenges and consolidate the long-term position of the group, Yuyuan group will continue to accelerate the implementation of automated production and reorganization process to enhance operational efficiency, provide more differentiated value-added services and one-stop manufacturing services to customers, maintain long-term cooperation, step up the sustainable development of the environment, and focus on the feasibility of long-term business growth.


In the channel, Yuyuan group will make the best comprehensive channel integration of the entity store and the e-commerce platform, through customer experience Oriented Innovation Activities and the integration of all channels of inventory and resources, strengthen market status and optimize profitability.


In manufacturing, Yuyuan group will focus more on enhancing lean production and improving production efficiency, adapting to flexible facility configuration and frequent production line reset, importing automation equipment and machinery, enhancing technological innovation, focusing on Process Reengineering and automation, so as to enhance efficiency.


In the first half of the year, Yuyuan Group invested $101 million 900 thousand in product opening. For each customer who owns the main brand of research and development team, the group set up an independent product research and Development Center for its research and development team to assist customers in research and development. In addition, Yuyuan also actively promotes the efficiency of the production process, improves the delivery time and develops new technologies, produces high quality footwear products, and integrates innovative elements and environmental protection materials into products.


The instability and complexity of trade relations between China and the United States prompted Yuyuan group to migrate to Southeast Asia, and the economic situation, retail confidence and consumption of China and the United States also raised the requirements of Yuyuan group to pay close attention to the economic and political situation. Among them, the Chinese region's pursuit of sports and leisure trends has made the group optimistic about the long-term growth prospects of sporting goods retail. In the United States, the downward trend of economic growth is increasing. The old department stores in Europe and the United States have been closed and bankrupt, which has a serious impact on the retail industry. In the future, we need Yuyuan to further consolidate its long-term profitability.