Although China still accounts for two out of three pairs of shoes exported around the world, over the last decade, its market share has steadily dropped-off and it now down by over -7 percent since 2010. In the same period, instead, Vietnam saw its shares almost double: a figure that signals the market’s move towards this Asian country for its global outsourcing needs.
The numbers
Vietnam is currently the third largest producer worldwide, with its 1.4 billion pairs and a global share of 5.8% (source: World Footwear Yearbook). Although it is still far from the record numbers of China (13.475 billion pairs produced with a share of 55.5%) and India (2.6 billion pairs with a share of 10.7%), the Vietnamese industry is in any case developing at a sustained rhythm in terms of both production and number of businesses and employees. Making the main difference between the Vietnamese footwear industry and the other two big Asian players, is its extremely strong vocation for exports: a good 101.4% of what it produces is destined for exports when compared with the 70.8% of China and 11% of India. It is thanks to this vocation that Vietnam has positioned itself in second place in the classification of global exporters, right after China, with 1.416 billion pairs exported in 2019. A result that arrives after ten years of uninterrupted growth, signalling not so much the ability of Vietnamese brands to make headway in the world, but rather the ability of the local industry to establish itself as the ideal location for outsourced production.
What are the factors of this success?
The stability of the country, the abundant workforce, and the lower costs of labour (although not quite as competitive as other countries like Cambodia, Myanmar, Bangladesh, and Ethiopia). The production capacity of the modern production facilities – located mainly in the Southeast region of the country, in the Red River Delta and Mekong River Delta – equipped with innovative solutions for automation and industry 4.0 technologies, are especially attractive to brands looking to produce their shoes at an advantageous price with quality control.
Confirming the added value of local production is in fact the average cost per pair of 16.24 dollars, when compared to the competitive Chinese production price of 4.72 dollars per pair.
The main end markets of Vietnam
The main commercial partners of Vietnam in order of importance are the United States, China, Germany, Belgium, and Japan.
The best place to cement productive partnerships with local producers is the IFLE – International Footwear and Leather Products Exhibition, an event organised by Top Repute and dedicated to the finished product that is held at the Saigon Exhibition & Convention Centre in Ho Chi Minh City (the next edition will take place from 14 to 16 July 2021) in conjunction with Shoes & Leather Vietnam, dedicated to leathers, materials, and machines for the footwear industry.
Instead, the main market players, according to World Footwear Yearbook, are Tae Kwang Vina Industrial Joint Stock Company, Chang Shin Vietnam Company Ltd., HWA Seung Vina Co. Ltd., Longwell Company Ltd., and Pou Sung Vietnam Co. Ltd.
