Yahya: Merchants had to put up inventory at wholesale prices to pay off their obligations
Hopes are on March to end the recession
The local market suffers from a recession caused by the Corona crisis, especially in the market for shoes and leather products.
Traders were forced to offer their inventory at low prices, to move the market and obtain liquidity that would help them fulfill their obligations.
Sherif Yahya, head of the Footwear and Leather Products Manufacturing Division at the Cairo Chamber of Commerce, said that the Corona pandemic has caused a severe recession in the shoe and leather products market, and changed the consumer behavior of the Egyptian citizen, so that the sector became at the bottom of the list of consumer concerns.
He added to the “Stock Exchange” that the year 2020 witnessed about 4 months, almost stopping due to setting the date for closing shops at 5 pm. And the closing hours began to gradually diminish until it reached ten in the evening, which moved sales to some extent, but remained at the minimum.
Yahya indicated that last September, the sales movement escalated due to the start of the school season, but as soon as the patterns and methods of distance education were announced, the boom ended until the end of the year.
He described the months of November and December of 2020, and January and February of 2021, as the worst months for shoe dealers and manufacturers, hoping that March would break the halt in sales.
He pointed out that the import movement has not witnessed an increase as some promote, as for the imported products spread in the markets at low prices, it is a result of traders resorting to offering their stocks in the markets at wholesale prices in addition to a very small profit margin, to obtain liquidity that enables them to fulfill their obligations.
Yahya said, at the present time, shipping prices have risen from an average of 3,000 or 5,000 dollars as a maximum before the Corona pandemic to more than 11 thousand dollars per container at the present time, for China, the largest supplier of shoes and leather products to Egypt.
He added, “If the products currently on the market were modern imports … of course they would have been affected by an exaggerated increase in shipping prices. But their price confirms that these products are cheap, and they are old stock with merchants who are working to get rid of it.
He mentioned that what is happening in the commercial street currently has a negative impact on the local industry, because the current prices do not cover the industrial cost of the local product .. Therefore, selling at these prices is considered a great loss for the factories.
Yahya revealed that the current prices of shoes and leather products are very low, and it is a golden opportunity for the final consumer, because once the stock ends with the merchants, it will be replaced by products loaded with heavy shipping burdens, which will never be cheap products.
He continued: “The same applies to raw materials and the final product in parallel, so there will be a case of high prices, whether the domestic or the imported product.”
Division Head: The import is clinically dead since Decision 43 regarding the registration of factories exported to Egypt
Yahya said, the division stands at one distance from the importer, manufacturer, exporter, retailer and wholesaler, and seeks to support any decisions that would offer the best quality products at the lowest prices.
He added that stopping imports of 3 months or more will not solve the market crises. Competition is important to push the local industry to offer products that surpass the importer, and some international brands operating in Egypt that are based on imports will increase their prices several times.
He continued: “The import is considered clinically dead, since Decision 43 related to the registration of factories exported to Egypt with the Export and Import Control Authority, as the decision contributed to reducing imports by a very significant percentage in the local market, and the Corona pandemic increased the reduction of imports, given the stagnation in the markets at the time. “.
Yahya admitted that the local industry did not provide a product that fits the fashion and rapidly developing taste during these few years, so the merchant searched for the importer, and the idea of assembly spread in Egypt.
If the local industry were able to offer a local product that would expel the importer from the market, it would have provided it in past years, so submitting proposals to stop importing will not solve the crisis, on the contrary, the absence of competition will push global and local brands to increase their prices, and the local industry crisis will remain, and the consumer will bear Burdens alone.
He pointed out that the local producer in men’s shoes is very strong and competitive, but the problem is in women’s shoes and products, because some local factories still cannot keep up with fashion.
Yahya said that the low prices of leather benefited medium-quality products, while high-quality products were still very expensive, affected by the high prices of chemicals for their manufacture.
He added that the division concluded twinning between a number of shoe factories and tanneries, to take advantage of the low leather prices, and to offer good products at reasonable prices.
He explained that the next stage will witness an increase in the prices of imported products charged with high shipping prices, and an increase in the prices of products in the country of origin .. Therefore, the Division sought in a proactive step to prepare for this phenomenon.
The article shoe dealers start their journey searching for liquidity was written in Al Borsa newspaper.