From Tokyo, Japan and Changsha, China – this is Down to Business English. With your hosts Skip Montreux and Dez Morgan. Hello Dez. Good to talk with you again. And with you, Skip. What have you been up to since the last time we spoke? Anything new or interesting? New? Not really. But life is always interesting if you have a positive attitude. Very true. How about yourself? Me? My major accomplishment this week is that I have finished my spring cleaning. Oh nice.
Yeah. The weather warmed up, so I packed away all my winter clothes and sorted out a few things I hadn’t used in a while. My apartment and wardrobe is now all organized for the spring and summer. How long did that take you? Oh, not long. I set aside a couple of hours last Sunday morning and had it all put away by noon. How practical of you! You really are a man with your feet on the ground. Well thanks, Skip — I do try to be one. I wish I was more like that.
I still haven’t gotten around to my spring cleaning — and you know what? Last year, I didn’t do it until June. June?! I could never leave it that long. Er, well, I don’t recommend it. But it’s funny that you should mention that expression. What expression? To have my feet on the ground. Really? What’s funny about that? Because that’s where my report begins today — with that very expression. Your report begins with feet on the ground? Sorry Dez, I just don’t follow that. Let me ask you this.
What do you need on those feet of yours in order to walk around? Well, if you’re outside I guess you would need to be wearing a pair of shoes. Exactly! And today on Down to Business English, I want to report on a major business story from the world of footwear — a company by the name of Hong Fu and a big investment they’re making in India. A footwear company called Hong Fu? Yeah honestly, I have never heard of them.
You might not know the name but I guarantee you this — you’ve seen or worn their products. Well, you have got me curious now. So let’s do it. Let’s get D2B … Down to Business with Hong Fu, and their big bet on India’s growing footwear market. Hong Fu. That sounds Chinese. You're close. Who exactly are they? Hong Fu Industrial Group is a Taiwanese footwear company that was established way back in 2003, and they just happen to be the second-largest manufacturer of non-leather shoes in the world.
And by non-leather I’m guessing you mean sports shoes or sneakers? Or trainers as we call them in British English, but yes that’s exactly what I am referring to. Well whatever you call them — sports shoes, trainers, sneakers — if they are such a major player, I’m surprised I have never heard of them. I’m sure I’ve never seen a Hong Fu store. That’s because they don’t sell directly to consumers. They are an OEM. An OEM — an Original Equipment Manufacturer?
They make products for other companies, usually under those companies’ brand names. Yes. Hong Fu manufactures shoes, but they don’t sell them under their own label. Instead, they produce them for big-name brands like Nike, Adidas, Puma, and Converse. Ah, so I have worn their shoes. I just didn’t know it. Their name may be unfamiliar, but their products are on the feet of literally millions of people around the world. Okay, now I am listening.
Recently, some of those big names haven’t had the best year. Take Nike, for example. In their 2024 earnings report, overall revenue rose by just 1%, and it actually dropped 2% in the fourth quarter. Sounds like they have plateaued. They have definitely flatlined. Meanwhile, Adidas posted a much better year — 12% growth overall, and 19% in the last quarter. Much better than Nike. But keep in mind, Nike’s total sales were $51.4 billion, nearly double Adidas's €23.7 billion. Right.
So even a small shift in Nike’s performance would have a big impact on suppliers like Hong Fu. What is behind lackluster sales in footwear? According to Nike, one reason is demand in China is weakening and they don’t expect it to pick up in the near term. Oh, that is not good news. No, it's not. And it is a clear signal to companies like Hong Fu to diversify their production and market reach. So is that what led them to India? Yeah. Back in 2022, they showed great foresight.
Hong Fu signed an MoU, or Memorandum of Understanding, with the Tamil Nadu government in southern India to build a new factory. Total investment? $130 million. When it’s fully operational, it’s expected to employ around 25,000 people. Well, that is not a small move. And Hong Fu is not alone in making moves like this. JR One Footwear, the makers of Crocs, are also investing heavily in Tamil Nadu.
And even high end manufacturers of luxury goods, like Prada and Louis Vuitton currently either manufacture or source materials from that region. I guess we will see more Made in India labels looking forward. That sure seems to be the plan — and it makes sense. India’s middle class is growing fast. More people are spending on leisure and fitness, and that means more demand for sports shoes. And I suppose this ties into that China +1 strategy we keep hearing about. It does.
Maybe let’s take a moment and explain what “China +1” actually means. Good idea. “China +1” is a strategy global manufacturers use to reduce their supply chain dependency on China by moving some of their operations to other countries. And India is one of the biggest winners in that shift. It is. But it’s not exactly easy to enter the Indian market, is it? Not really, no. Well, at least the footwear sector presents some interesting challenges. Why do you say that?
About two-thirds of Indian footwear production comes from what’s called the unorganized sector — small, independent manufacturers with little or no regulation. Which probably means inconsistent quality. That is the concern. So, to address this, the Indian government introduced new rules in August of 2024. All shoes sold in the country now have to meet quality standards on materials and construction. Better protection for consumers, but I imagine prices will go up. They likely will.
And that is where things get tricky. Let me guess. If the government supports big manufacturers like Hong Fu too much, the small players suffer. Exactly. The unorganized sector is a very large employer, with these small businesses employing millions of people. The government is walking a tightrope — they need to encourage foreign investment like Hong Fu while also protecting local employment. That sounds like a tough balancing act. It sure is.
But they’ve started support programs to help small producers meet the new standards and formalize their operations. So are there any smaller companies already stepping up? Yes there are, actually. One standout example is a company called Zen Barefoot. They specialize in sports shoes that simulate walking barefoot, which, they claim, is better for your feet. Interesting. So kind of like a minimalist running shoe? And then there’s another innovative brand called Comet.
The soles of their shoes are actually designed specifically for Indian roads and weather conditions. Something most mass-produced shoes don’t really take into account. I assume most small manufacturers just use generic soles. That’s usually the case, yes. But Comet is taking a very localized, problem-solving approach. Which is great to see from a homegrown brand. Indeed it is. So Dez, what’s next? Can India really become a global hub for sports shoes? There’s certainly momentum.
Foreign investment is up, local innovation is emerging, and new regulations could raise India's profile. If it all goes well, you might be seeing a lot more Made in India labels in shoe stores soon. Well, I will definitely keep my eyes peeled for that. And on that note, I think it is time for us to get D2V … Down to Vocabulary. I will start D2V today with the expression to have your feet on the ground. This expression means to be sensible, practical, and based firmly in reality.
Someone who has their feet on the ground usually can take care of themselves. That’s right. In the introduction to today’s episode, I said that Dez was a man with his feet on the ground because he had taken the time to do some spring cleaning around his home — a very practical and sensible thing to do. The opposite of having your feet on the ground is to have your head in the clouds. I love this expression. It means you or your ideas are impractical and are not connected to reality.
Can you give us an example of having your head in the clouds? I think it is fair to say that the UK government had their head in the clouds when, in 2020, they announced that by 2030 no more petrol or diesel cars could be sold in the UK. A complete change to the private and commercial transport sector in only 10 years. Huh. Yeah, it does sound like some people in government had their head in the clouds.
As it's now 2025 and I don’t see a great deal of progress being made towards that goal, I have to agree with you. Skip, can you give us a business related example of having your feet on the ground? Hm, let’s see. Oh, here’s one. You are familiar with Uniqlo, aren’t you? Of course. You mean the Japanese fast fashion company, sure. Well, I was recently reading about their founder Tadashi Yanai. He is often seen as a CEO with his feet on the ground. Really? Why’s that?
Unlike his competitors Zara or H&M that base their brands on the latest fashion trends, Yanai-san built Uniqlo focusing on clothes that are practical, high quality, and affordable. Mm. Nice example. Our next word is the verb to plateau which means to stop increasing and level off. The literal definition of the noun form, a plateau, is a flat area of land that is higher than other nearby areas. Just think of a mountain that has no summit, just a flat top.
The Tibetan Plateau is the largest plateau in the world and is often referred to as the roof of the world. That’s right. Anyway, in today’s report Skip used the verb form, to plateau, to indicate that Nike’s sales have leveled off and are no longer growing. But he could have just as easily used the noun form and said, “Nike sales have reached a plateau”. Another example would be CPU clock speeds in personal computers. For the most part, they have plateaued at around 5 GHz. Oh, why is that?
With the current chip architecture they can’t process data any faster because of problems with heat dissipation. Interesting. You know, I did not know that. Our final item for D2V today is the idiom to walk a tightrope. I am sure listeners can picture a tightrope walker … maybe at a circus. You know, someone walking along a rope that is tied between two poles, high off the ground, just holding a long bar to keep their balance. Yeah, we can all picture that.
As you can imagine, walking a tightrope is very dangerous. One wrong move and you are going to fall to your death. And this is where the idiomatic meaning comes from. Walking a tightrope means being in a difficult situation where you have to carefully balance between two opposing goals or pressures. And if you make a mistake, er, you’re going to be in a lot of trouble. You might not die, but there again there would be a lot of pain.
In the report Dez said that the Indian Government was walking a tightrope between raising standards of quality without causing additional unemployment. In other words, they need to be very careful with the decisions they make. If they introduce the wrong policy, either the consumer or the manufacturer will be hurt. A hard tightrope to walk. Can you give us another example, Dez? Sure. A company walking a very difficult tightrope right now is the oil giant BP.
The company has stated that it wants to transition from being a fossil fuel producer to being a renewable energy producer. Mm. That is certainly a difficult position to be in. They’ve even pledged to reduce their oil and gas production by 25% by 2030. Wow! Is that even possible? Possibly. However, I believe their original promise was to cut it by 40%. Ha. Sounds like they had their heads in the clouds when they made that original statement.
Would you like to help Down to Business English reach more people wanting to improve their Business English skills? Follow Down to Business English on Apple Podcasts, YouTube Music, Spotify, or any place podcasts are found. Leave a rating and a review and tell everyone how much you enjoy the show. Thank you very much for that report on Hong Fu and their big bet in the Indian footwear market. It’s interesting to see how India is developing their manufacturing sector.
I think we’ll be hearing more and more about companies making similar moves in the near future. On a personal note, I love India. I’ve traveled there at least, let me see, five times, and look forward to the day that I can return again. It’s one place I have never been to. But it is on my bucket list, that’s for sure. D2B Members and Apple Podcast Subscribers — the bonus Down to Vocabulary episode for today’s report will be released very soon.
In that bonus D2V episode, we will go through five additional words and expressions from today’s report. Those words and phrases will be: to flatline, to be lackluster, to pick up, foresight, and to take something into account. D2B Members, make sure you have copied the member-only URL for your RSS feed from your account page on the D2B website and have pasted it into your podcast app so that you don’t miss that bonus vocabulary episode. Apple Podcast Subscribers — you don’t need to do anything.
The bonus D2V episode will appear automatically in your Apple Podcast app as soon as it’s released. And if you are not yet a D2B Member or Apple Podcast Subscriber, and you find Down to Business English useful in your English studies, support the show by becoming a D2B member through our website — or by subscribing through Apple Podcasts. To become a member directly through our website visit d2benglish.com/membership and sign up today.
And to become an Apple Podcast subscriber, just visit the Down to Business English show page in the Apple podcast app, and click ‘Subscribe’. Thanks for listening everyone. See you next time. Bye bye. Have a comment or question about today’s show? Don’t be shy… visit the D2B website or Facebook page, and post any comments or questions there. Skip, Dez, or Samantha will be sure to leave a reply. Down to Business English … Business News, to improve your Business English.