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The footwear industry is of enormous importance to the Mexican economy, accounting for 0.22% of Gross Domestic Product (GDP) in 2008 and 1% of manufacturing GDP. Once again, micro and small companies account for the bulk of enterprises in operation (roughly 89%) and employ some 600,000 people There are approximately 8,000 footwear manufacturers in Mexico, 3,300 of which are located in the state of Guanajuato
Source: http://negocios.promexico.gob.mx/english/11-2012/businessTips/index.html
The footwear industry is of enormous importance to the Mexican economy, accounting for 0.22% of Gross Domestic Product (GDP) and 1% of manufacturing GDP. Of the 250,000 pairs of shoes the country manufactures, 20,000 are exported, while imports stand at 60,000. The main international market for Mexican-made shoes is the US, followed by Canada and Japan.
A well established supplier chain, a highly-skilled workforce and good communications infrastructure. Affordable and the industry has a long-standing tradition in certain parts of the country like Len, Guanajuato. Manufacturers also have access to international fairs, where their products enjoy a high degree of prestige.
Local raw materials- Local inputs of leather and synthetics reduce the transportation costs (and time) for obtaining raw materials Shared suppliers. Economies of scale. Educational infrastructure. The Len area has a variety of educational, training and research centers all supporting the leather and footwear sector.
International economic crisis could eventually affect sales on the domestic and international markets, demand continues to grow on both. Chinese footwear imports talking the market by storm.
What we are seeing today is a shift towards strategic alliances for the subcontracting of production processes, which is particularly appealing to investors. Mexico and China have reached an agreement, aimed at governing imports of Asian footwear entering Mexico. The agreement, which will take effect on 1 May and run until December 2014, aims to prevent cheap footwear flooding the Mexican market.
Source: http://www.just-style.com/news/mexico-signs-footwear-import-deal-with-china_id113922.aspx
1967 : Deal with the American maker of Hush Puppies to distribute the shoes in Mexico. 1972: Emyco reached an agreement with U.S. shoemaker Florsheim to open a chain of Florsheim stores in Mexico. 1990: Emyco bought the chain from Florsheim, along with the use of its brand in Mexico. Both brands remain very popular in Mexico, where Florsheim's best-known client is President Felipe Calderon
To maintain its competitive edge, Emyco invests heavily in technology and quality control. Its main factory, where more than 1,500 employees work, sprawls across several acres of former ranchland on the southern edge of Leon. It takes 140 different assembly-line procedures , only one or two of them performed by each worker , to manufacture a single pair of shoes. Every finished shoe is inspected. As a privately held firm, Emyco doesn't disclose financial information. But the Leon Chamber of Footwear Industry says big outfits like Emyco earn a net profit margin of about 7 percent on an average pair of shoes, which suggests the company made a net profit of about $25 million in 2008.
Source: Mexican Shoemaker Relies on Sex Appeal, Not Bank Credit| Institutional Investor (Mar 2010): n/a.
Difficulties the company faces in defending and growing its market are emblematic of the challenges facing the country's medium-size enterprises.
Although Emyco sells shoes through the American department store chain Macy's, at an average price of $70 a pair versus $50 in Mexico, the company isn't a big exporter. The domestic market, where Emyco owns 110 retail stores, accounted for just over 90 percent of the 6 million pairs of shoes it sold in 2009.
Source: Mexican Shoemaker Relies on Sex Appeal, Not Bank Credit| Institutional Investor (Mar 2010): n/a.
A case in point is Emyco's "Sexy Walk" shoe line for women, launched to help the company bounce back from a 15 percent drop in sales in 2009. Orders were up 50 percent in the first quarter compared with a year earlier, and Emyco got a boost when Katie White, the lead singer of the British band the Ting Tings, wore "Sexy Walk" high heels at the recent Grammy awards ceremony. "Our women's shoe production is completely booked until May," says Martinez.
Enter into youth segment(15-25 yrs): Company designers claimed that granules on the "Sexy Walk"' inner soles activate reflexology pressure points, making the body relax and releasing pheromones that attract men. The science may be debatable, but the marketing is certainly working for Emyco. On the same lines using competence of Emyco they should develop some high end products targeted at youth.
China import treaty Till 2014 China treaty is valid , They should take advantage of the time and expand aggressively in domestic markets. Foreign markets should be focused on next priority
Focus on untapped markets: Markets where ethnic footwears are much in demand should be targeted aggressively Brazil, Latin America Countries, Western Europe can be such locations.
Thank You !!