From footwear to high-end chocolate, Italian small-and-medium enterprises (SMEs)are betting on China as signs of a decline in exports and a slowdown in growth.
SMEs in Italy are the backbone of the country’s industrial and manufacturing system, and they are more inclined to export. Stefano Menghinello, the Director of Business Statistics at national statistics bureau ISTAT, told lawmakers that in 2017, at least 45.4% of Italian manufacturers sold their products overseas, many of them were small and medium-sized enterprises. He added, “Compared with other large European countries, Italian SMEs account for a much larger share of their exports.”
Important footwear export market
According to Annarita Pilotti, the president of Assocalzaturifici Italian shoe manufacturers association, among these SEMs are famous Italian shoe-making companies whose products are embarrassed by customers all over the world. It is also becoming more and more popular in China, which is currently the ninth most important market for Italian footwear exports.
The footwear industry has an annual turnover of more than 14 billion euros, employs 77,000 people, and exports 85% of its products, According to Assocalzaturifici, representing 600 companies and holding MICAM trade fair in Milan earlier this month, with a focus on the future of China’s business.
Pilotti said, “the typical Chinese buyers are generally interested in women’s shoes and like high-end shoes. If companies want to succeed in China, they must consider “into the so-called second- and third-tier cities”. She added, “ The Chinese market is atypical. Just exporting shoes to Shanghai or Beijing does not mean that you have covered the entire market.”
Looking east when exports are slowing
Although China’s demand for Italian footwear has surged last year, according to ISTAT data, Italy’s exports have generally slowed down in the second half of 2018, with monthly (-2.3%) and annual (-2.7%) declines.
Despite this, the Italian state-owned investment bank Cassa Depositi e Prestiti (CDP) and its trading department SACE SIMEST are investing their financial strength in Italian companies trying to expand into the Asian market, especially China.
SACE SIMEST recently announced that it will directly invest 4 million euros, plus a 4.5 million euro loan guarantee to support Venchi’s expansion in Asia. Venchi is a long-established Italian chocolate and ice cream maker founded in the northern Italian city of Turin in the 19th century.
In the east, there are also many platforms that welcome SMEs to come to China for business. For example, JumoreGlobal provides them with a good platform and resources. It has established a global digital trade network covering 157 countries and regions, connecting Chinese and Italian SMEs while bringing increased efficiency and competitiveness to global trade. China-Easy service package has also provided business opportunities for foreign businessmen to enter the Chinese market.