SS17 Color Trends
Monday, July 18, 2016
Footwear News: Asian Footwear Market Vietnam
Vietnam ties footwear bonds with India:
Diep Thanh Kiet, vice chairman of the Vietnam Leather,
Footwear and Handbag Association, has announced in the event in Ho Chi Minh
city to have strong bonds with India. The event was attended by 41 Indian firms
Rafiq Ahmed, chairman of India’s Council for Leather
Exports, said Vietnamese footwear companies should take advantage of the Indian
market.
Vietnam Ties Footwear Bonds with India
The domestic leather and footwear
industry gained a year-on-year increase of about 16 per cent in export value to
US$15 billion, including $12 billion from footwear, and $3 billion from
handbags. This year, the industry expects to reach a growth rate at 15-20 per
cent in export value due to leftover development from last year and more export
opportunities from the FTAs, especially from the ASEAN Economic Community and
the TPP.
In reality, Vietnam is independent of its materials for
canvas shoes (100%) and some other products (30-40%), however more than 70% of
enterprises completely depend on imported materials. Every year, Vietnam spends
approximately US$ 300 million on importing leatherette and leather. Leather
factories are incapable of supplying 10% of their demand and are now working
with only 25% of their capacity due to lack of materials. Raw materials account
for a large proportion (68-75%) of price structure of footwear. Localization
rate of enterprises in the industry is only 40-45%. These enterprises have to
import most of the important materials such as leather, leatherette, canvas for
upper parts, PVC, PU paint, fabric, and glue. They are also dependent on
suppliers from raw materials to designs and marketing, therefore are unable to
develop their own brands. Less than 20 enterprises with 100% Vietnamese capital
are able to manufacture under FOB terms.
The major challenges to it's industry were identified
- The industry still imports most raw materials
- Vietnamese footwear products see little value-addition, experts said, noting that their competitive advantage in terms of prices over rivals like China, India, Indonesia, and Thailand is also gradually shrinking
- To develop sustainably and become more competitive, the sector needs to restructure and increase the local content rate, according to experts
Where experts says foreign investments required.
Saturday, June 18, 2016
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