Nike shifts footwear production from China to Vietnam

[aziqbal]

We are never proud of making shoes, Nike is welcome to leave China.

China still makes majority of shoes in the World and will continue to do so

just not Nike

 

[SuvarnaTeja]

You dont wear shoes?

Chinese walk barefoot.

 

[Apollon]

Chinese walk barefoot.

View attachment 812922

Ewww

 

[DoTell]

You dont wear shoes?

How do you draw conclusion from not proud of making shoes to don't wear shoes? You don't posses the IQ of a normal adult? No wonder your Indian pal is agreeing with you. Idiots think alike, don't they?

 

[Apollon]

How do you draw conclusion from not proud of making shoes to don't wear shoes? You don't posses the IQ of a normal adult? No wonder your Indian pal is agreeing with you. Idiots think alike, don't they?

No, its simply that i respect work. Shoes are a work of art and i respect those who make them. It shows peasant mindset to disregard certain works. I dont blame you, you come from a country that was incredible poor just few decades ago. You are still not 100% fluent in the customs if high culture.

 

[silverox]

I found that many of the clothes I bought are now made in Bangladesh and Indonesia. I also spent 200 yuan on a leather jacket made in Pakistan. I don't know if it's genuine leather. The shopping website says it's a leather jacket made of sheep skin, but I won't identify it. Moreover, considering the cheap price, I'm more uncertain whether it's real sheep skin, or, Only a small part used sheep skin

 

[Globenim]

They conveniently omitted the part how, opposed to the planned production capacity they mentioned, the real production output was in tatters, because Vietnamese footwear and apparel factories where all or almost all shut down, strongly impacting sales and even forced them to shift apparel production back to China, where labour costs are four times higher.

Nike's 2022 Q1 Report

Additionally, several of our factory partners in Vietnam and Indonesia were required to abruptly cease operationsin the first quarter. As of today, Indonesia is now fully operational. But in Vietnam, nearly all footwear factories remain closed by government mandate.

And then in addition to that, there's Vietnam. And it's important to think about these two impacts together. As of today, 80% of our footwear factories located in the south and nearly half of our apparel factories in Vietnam are currently closed.

Our teams are leveraging their experience and our operational playbook and taking actions to try to mitigate these impacts, and they're doing things like maximizing our footwear production capacity in other countries, shifting apparel production out of Vietnam to other countries like Indonesia and China and others where viable

Nike's 2022 Q2 Report

Revenues for NIKE, Inc. increased 1 percent to $11.4 billion compared to the prior year and were flat on a currency-neutral basis

In Greater China, Q2 revenue declined 24 percent on a currency neutral basis and EBIT declined 36 percent on a reported basis

In total, Vietnam factory closures caused us to cancel production of roughly 130 million units…

Before we move into operating segment results, I want to recall a few points I made last quarter regarding the impact of Vietnam factory closures on the short-term performance of each of our geographies, beginning in the second quarter.

Despite strong retail sales momentum in the wholesale channel, revenue declined 1 percent as marketplace inventory levels remain lean, and Vietnam factory closures and longer transit times disrupt the flow of inventory supply to meet marketplace demand

Results for this quarter were as expected, as we navigated lower full price product supply due to the Vietnam factory closures. We saw disproportionate impacts to our wholesale revenue, which declined 27 percent on a currency neutral basis.

Double digit revenue growth, on a currency neutral basis, in SOCO was offset by declines in Asia Pacific territories which faced a greater impact from Vietnam factory closures as well as the business model shift in Brazil

For Q3, we expect revenue to grow low single digits versus the prior year, due to the ongoing impact from lost production from COVID-related disruptions in Vietnam.

l. The results this quarter in China were absolutely -- were overwhelmingly impacted by supply disruptions from Vietnam. And we’ve been -- we’ve talked about that both earlier today and last quarter

 

[Titanium100]

I don't understand why are they taking all these productions to Vietnam

 

[Globenim]

I don't understand why are they taking all these productions to Vietnam

For certain labour intensive productions four to five times lower wages and availability of labourers willing to do the job make Vietnam more lucrative than any higher efficiency, quality, mechanization and infrastructure China can offer. At least thats the shortsighted outlook on paper. Reality as mentioned above is something different.

 

[MH.Yang]

I don't understand why are they taking all these productions to Vietnam

For labor-intensive enterprises, wage cost is the biggest cost. Vietnam's wages are lower than China's, and they have qualified infrastructure. Vietnam and China have free trade agreements and are close to China. They can also take advantage of China's market and logistics.

 

[xuxu1457]

TAIPEI (Taiwan News)
There are too many contraband goods, so it is maliciously interpreted.

 

[Titanium100]

For labor-intensive enterprises, wage cost is the biggest cost. Vietnam's wages are lower than China's, and they have qualified infrastructure. Vietnam and China have free trade agreements and are close to China. They can also take advantage of China's market and logistics.

I have always assumed relations are somewhat sour between unlike the relations China enjoys with North Korea.. Vietnam is little bit alouf and stubborn for China's liking.. Am I right in my assessment

 

[MH.Yang]

I have always assumed relations are somewhat sour between unlike the relations China enjoys with North Korea.. Vietnam is little bit alouf and stubborn for China's liking.. Am I right in my assessment

This is very complicated, I may have to explain a lot.
Let's look at the geography of China. To the north is the Siberian ice sheet, to the northwest is the great desert, and to the southwest is the highest plateau in the world.
In ancient times, there were only two channels for other countries to attack China, one from North Korea and the other from Vietnam. Therefore, for thousands of years, these two countries have been controlled by China for a long time. They are China's vassal countries.
But in the Confucian world view, control means not only rights, but also responsibilities and obligations.
The binding of rights and obligations is very important in the Confucian system, even many Chinese emperors would rather destroy their dynasties than subvert the Confucian system. Because these emperors thought that if the dynasty perished, a new dynasty would be born. If the Confucian system perishes, so will the Chinese nation.
In April 1592, the Japanese ruler Toyotomi Hideki invaded Korea. The emperor of the Ming Dynasty sent General Li Rusong to help North Korea defeat the Japanese army. Although the emperor knew that the war would seriously worsen the already poor financial situation of the Ming Dynasty, the Ming emperor chose to participate in the war. In 1627, 35 years later, the Ming Dynasty triggered a peasant uprising due to the serious financial crisis. Finally, the Ming Dynasty perished in this rebellion.
In 1883, France invaded Vietnam. The Qing emperor of China knew he would be defeated, but he still participated in the war. In September 1894, the modern Japanese army invaded Korea. Although the emperor of the Qing Dynasty knew he would be defeated, he chose to join the war. These two wars also indirectly led to the demise of the Qing Dynasty.

Now you should understand that under the Confucian system, China is bound to send troops to protect Vietnam and North Korea (in fact, if we have other options, we are not willing to go to North Korea to fight the Americans in 1950), otherwise, it may subvert Chinese tradition.
However, China does not allow other countries to invade these two countries, which does not mean that China will not beat these two countries. In fact, China has sent troops to destroy these two countries many times in history, which is why Vietnamese hate us.
At present, the relationship between China and Vietnam is not good. The Chinese hate the Vietnamese for betraying China and taking refuge in the USSR. In order to maintain diplomatic relations with the three Mekong countries, the Chinese government deliberately stays away from Vietnam(Vietnam had a war and border conflict with Thailand and Cambodia. Vietnam was prepared to annex Laos, and Laos is also very wary of Vietnam). However, Vietnamese people have too many Chinese blood and cultural ties after all, China will still help them in economic and other aspects.
In fact, North Korea's reputation in China is not good. Although Americans call China an dictatorship country, but except for Mao Zedong, all leaders of the PRC has been in power for no more than 10 years, and they have no kinship or blood relationship with each other. These bastards in Korea are clearly feudal dynasties, but they are holding the same flag as us. Not only drag down our reputation, but also let our soldiers waste their lives. Our soldiers died for communism, not for the feudal dynasty. But based on the Confucian system, we will still protect North Korea. It would be great if North Korea could reform its politics.

 

[Titanium100]

This is very complicated, I may have to explain a lot.
Let's look at the geography of China. To the north is the Siberian ice sheet, to the northwest is the great desert, and to the southwest is the highest plateau in the world.
In ancient times, there were only two channels for other countries to attack China, one from North Korea and the other from Vietnam. Therefore, for thousands of years, these two countries have been controlled by China for a long time. They are China's vassal countries.
But in the Confucian world view, control means not only rights, but also responsibilities and obligations.
The binding of rights and obligations is very important in the Confucian system, even many Chinese emperors would rather destroy their dynasties than subvert the Confucian system. Because these emperors thought that if the dynasty perished, a new dynasty would be born. If the Confucian system perishes, so will the Chinese nation.
In April 1592, the Japanese ruler Toyotomi Hideki invaded Korea. The emperor of the Ming Dynasty sent General Li Rusong to help North Korea defeat the Japanese army. Although the emperor knew that the war would seriously worsen the already poor financial situation of the Ming Dynasty, the Ming emperor chose to participate in the war. In 1627, 35 years later, the Ming Dynasty triggered a peasant uprising due to the serious financial crisis. Finally, the Ming Dynasty perished in this rebellion.
In 1883, France invaded Vietnam. The Qing emperor of China knew he would be defeated, but he still participated in the war. In September 1894, the modern Japanese army invaded Korea. Although the emperor of the Qing Dynasty knew he would be defeated, he chose to join the war. These two wars also indirectly led to the demise of the Qing Dynasty.

Now you should understand that under the Confucian system, China is bound to send troops to protect Vietnam and North Korea (in fact, if we have other options, we are not willing to go to North Korea to fight the Americans in 1950), otherwise, it may subvert Chinese tradition.
However, China does not allow other countries to invade these two countries, which does not mean that China will not beat these two countries. In fact, China has sent troops to destroy these two countries many times in history, which is why Vietnamese hate us.
At present, the relationship between China and Vietnam is not good. The Chinese hate the Vietnamese for betraying China and taking refuge in the USSR. In order to maintain diplomatic relations with the three Mekong countries, the Chinese government deliberately stays away from Vietnam(Vietnam had a war and border conflict with Thailand and Cambodia. Vietnam was prepared to annex Laos, and Laos is also very wary of Vietnam). However, Vietnamese people have too many Chinese blood and cultural ties after all, China will still help them in economic and other aspects.
In fact, North Korea's reputation in China is not good. Although Americans call China an dictatorship country, but except for Mao Zedong, all leaders of the PRC has been in power for no more than 10 years, and they have no kinship or blood relationship with each other. These bastards in Korea are clearly feudal dynasties, but they are holding the same flag as us. Not only drag down our reputation, but also let our soldiers waste their lives. Our soldiers died for communism, not for the feudal dynasty. But based on the Confucian system, we will still protect North Korea. It would be great if North Korea could reform its politics.

China is big brother of these two Korea-Vietnam and they always call China when things go south especially the koreans China is there wild-card to bail them out and they have triggered that card atleast 3 times..

 

[KAL-EL]

I don't understand why are they taking all these productions to Vietnam

At least some of it is because of the Fantastic beaches.