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Footwear industry is expecting new opportunities

Update: 18-01-2021 | 11:16:55

Leather footwear industry is having a great opportunity to open many large markets. Enterprises expressed their belief in a bright future when entering a new year, a new period.

Solid foundation

The year 2020 was a difficult year for the whole industry in general and the leather footwear industry in particular as the epidemic outbreak in first months of the year disrupted the supply chain as well as market, seriously affecting manufacturing activities of enterprises and employees. Up to now, the production and export situation of this industry is still facing many difficulties, because major export markets, such as the US, Europe, Korea and Japan, are still heavily affected by the Covid-19 pandemic. However, with relentless efforts, at the end of 2020, export turnover of the province's leather footwear industry was estimated at 1,992.7 million USD, down 8.5% over the same period (up 16.5% in the same period last year). This is a number that does not reach the set targets of enterprises as well as the industry's association, but it is an encouraging result in difficult conditions, a premise to create a breakthrough in the new period.

To sustain production during the Covid-19 as the supply chain was failing was a remarkable effort. Enterprises have tried to escape dependence too much on imported raw materials. Nguyen Van Le, Deputy Director of Dong Hung Industry Joint Stock Company, said that when the pandemic occurred, many enterprises actively produced domestically raw materials to replace foreign sources. Dong Hung shoes has linked with a number of domestic partners in raw materials industry. A good news for leather footwear industry is that, until now, domestic raw materials in general has met about 60% of production needs.

Furthermore, enterprises also prove to the world about their capacity for supply, research and development, sample design, digital-based management. Nguyen Duc Thuan, Chairman of Vietnam Leather Footwear and Handbag Association, Directors Board's Chairman of Thai Binh Investment Joint Stock Company affirmed that, through a turbulent 2020, Vietnamese enterprises have proved themselves to have good capacity for supply, research and development, sample design, digital-based management. Namely, design companies used to have designers of chains and experts, but now the sample approval and modification have been done online, photo editing is also done online. This is a good signal. Up to now, most supply chains and distributors are very confident in the research and development capacity of Vietnamese enterprises, as well as their ability to adapt to bad impacts of epidemic. This is a greatest success of the footwear industry.

“Although China's production capacity still holds 50% of global output, Vietnam's leather and footwear exports to China have increased by 15% for the first time. Thus, now China is not a competitor to Vietnam in terms of supply anymore, but this is the market that has to import many Vietnamese-made products”, said Mr. Nguyen.

Bright future

Assessing the future of leather footwear industry, a representative of Leather Footwear and Handbag Association said that this industry was having great opportunities from free trade agreements (FTAs), such as: CPTPP, EVFTA ... In 2021, the market for leather shoes and handbags has many optimistic signals. If the world has Covid-19 vaccine and makes good use of opportunities from the FTAs, the export of Vietnam's footwear and handbag industry would grow by 15-20% in 2021. At the same time, due to the impact of Covid-19 epidemic, new supply chains are being re-established, this is an opportunity for Vietnamese enterprises to participate more deeply in the global supply chain. In particular, consumers in developed markets such as: The US and EU are very confident with products made in Vietnam. This is a great opportunity for brands to move their production to Vietnam.

Mr. Nguyen said that the leather footwear industry is currently showing good signs when businesses have orders for 2021. Besides, a number of enterprises began to shift production to Vietnam. Therefore, Vietnamese enterprises must improve productivity, accumulate capital, science and technology, master the supply chain, and meet environmental requirements to receive more orders.

Enterprises expect governmental ministries and branches to continue implementing solutions to develop and maintain industry growth. In particular, to focus on in-depth industrial development, with priority given to attracting and developing supporting industries, helping businesses step by step participate in the global value chain. The State also needs to support the industry to form industrial zones to produce specialized supporting industrial products, connect domestic enterprises to the supply chain of raw materials.

Ministry of Industry and Trade is currently implementing a development strategy for the Vietnamese leather footwear industry to 2030, with a vision towards 2035, with the ultimate goal of sustainable development and greening Vietnamese leather shoes. In the coming time, industrial associations will actively promote their effectiveness and role of a bridge between businesses and businesses, between
State agencies and the Government to build a development strategy for the footwear industry to 2030, with a vision towards 2035, as well as the construction of two leather footwear research and development centers, following the Prime Minister's direction on supporting industry development solutions.

Reported by Tieu My - Translated by Ngoc Huynh

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