Market Scenario for Footwear industry development

Producing shoes for export at Casum Shoes - Casum Shoes Joint Stock Company

Currently, Vietnam's footwear production accounts for 5% of the world, but exports nearly 15%. Therefore, Vietnam is ranked third in the world in footwear production and export (after China and India). At the same time, more than 97% of footwear produced in Vietnam is destined for export.

Advantages for the footwear industry

Vietnam has many advantages to develop the footwear industry in the future because many free trade agreements (FTAs) have been signed, covering more than 61% of global trade such as: Vietnam-EU FTA, CPTPP, ASEAN Economic Community, etc. Currently the United States and Europe are respectively the two largest footwear export markets of our country. In which, the US market accounts for 36% of the output and the value of footwear exports, while Europe holding 27%.

Footwear businesses continuously expand their consumption markets and more than 100 countries buy shoes from Vietnam. Most of the major shoe brands in the world have been produced in Vietnam such as Nike, Adidas, Reebok, Puma, New Balance, Prada, and so on.

Mr. Nguyen Duc Thuan, Chairman of Vietnam Leather, Footwear and Handbag Association, said: “Vietnam's footwear production capacity is quite good, capable of producing the world's most premium footwear. Enterprises in the Vietnamese footwear industry pay great attention to technology investment to complete difficult orders, complete quickly in a short time, so customers are very satisfied. It is likely that in the coming time, many large footwear orders will be transferred to Vietnam.”

The Vietnam Leather, Footwear and Handbag Association also scripted the receipt and deep participation in the global footwear supply chain. The goal is to choose a high value-added supply chain that is consistent with the national development strategy.

Mr. Sibojyoty Chatterjee, Director of Bata Vietnam Limited Company (Ho Chi Minh City) said: “Vietnam is a safe omen for international footwear brands. Many world-famous shoe brands have planned to restructure the supply chain and Vietnam will have the advantages to develop the supply chain and supporting industries for this industry. It is expected that Vietnam's footwear export turnover can reach USD 31 billion by 2025.”

Dong Nai footwear industry recovered quickly

Footwear production and export of Vietnam as well as Dong Nai in the coming time will depend greatly on the disease situation of Covid-19. If the world is in good control of the epidemic and does not let the outbreak come back, the economy (including the footwear industry) will recover faster. In Dong Nai, footwear production sees a faster recovery than the national average. Specifically, in the first 6 months of 2020, Vietnam's footwear export turnover was only US $ 8.1 billion, down 6.7% on a year-over-year basis, but in Dong Nai, it reached more than US $ 2.14 billion, increase more than 6%.

Mr. Dinh Sy Phuc, Trade Union Chairman of Tae Kwang Vina Industrial Joint Stock Company in Bien Hoa 2 Industrial Park (Bien Hoa City) said: “Our company's footwear production has recovered quite well, so far more than 30,000 workers have returned to normal work.”

The recovery of other footwear companies depends on the order and the market which means some places fast, some places slow. Currently, the two major export markets of Dong Nai and the US are still relatively difficult because trade in these countries has not returned to normal as before. However, Dong Nai's footwear has been exported to more than 60 countries and territories to rapidly recovering markets, and enterprises have promoted exports. However, Dong Nai's footwear has been exported to more than 60 countries and territories, so businesses will boost exports to the rapidly recovering markets.

According to Mr. Le Van Loc, Deputy Director of the Department of Industry and Trade, footwear is the main export item of Dong Nai and holds the largest export turnover. While the country's footwear export turnover has grown negative, Dong Nai still maintains a positive growth rate, which is a great effort of businesses. Most of Dong Nai's footwear companies do outsourcing for major footwear brands in the world.

According to the Vietnam Leather, Footwear and Handbag Association, in order to overcome difficulties, quickly restore production, businesses must have specific solutions, plans, and restructure to be able to anticipate and receive supply chain shifts; Meanwhile, businesses must also master the product development stage and control the supply chain of raw materials. In addition, enterprises must improve their governance capacity through the application of scientific and technological achievements and industrial revolution 4.0, train their human resources to meet the required positions, and prepare financial resources to prepare investment for the new stage.

                                                                                                            Vi Quan