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Leather footwear and handbags industry is in need of good strategy to develop domestic market

Update: 23-09-2020 | 08:13:23

The pandemic has once again reminded leather footwear enterprises of sustainable development, including the development of domestic market.

Dong Hung Shoes Company is confident with its export experience in developing a Vietnamese brand with international quality.

To attach great attention to the market   

Due to the Covid-19, the production and export of leather footwear and handbag industry has faced many difficulties. Currently, Vietnamese enterprises in this industry are taking orders only monthly or even weekly. Some enterprises in the industry have taken about 50-60% orders for September, October; the remaining months of 2020 and 2021 have not had any information. 

Nguyen Quang Vu, General Director of Nam Binh Company, said that from beginning of this year, due to the Covid-19, the company's export orders have been interrupted. The company is focusing on domestic market development strategy to maintain production activities. From beginning of this year, revenue of the domestic market has reached over 50 billion VND. This is a source that helps the company stabilize production, overcome the epidemic, and create jobs for employees.

During the pandemic, Mr. Nguyen realized that developing the domestic market is a sustainable solution. The company has invested in a product line of fashion shoes branded Prowin, instead of just focusing on Prowin line for football players.

As a result, after two months, the market showed quite positive signals. Nam Binh Company also plans to open 20 agencies with 400 stores nationwide in the near future to promote and bring Vietnamese shoes with European and American standards to inland consumers. In recent years, domestic leather footwear enterprises have turned towards domestic market and made significant progress. Many businesses expanded their production scale, innovated technology, equipment, and improved product designs to create many fashionable products that is suitable to demands of domestic consumers.

According to Ha Duy Hung, Chairman of Directors Board of Dong Hung Shoes Company, in general, the domestic market is large, but there are few brand names serving young people with multi-purpose products. With their new line - HUG, Dong Hung Company wants to not only serve domestic customers but also bring a shoe brand made in Vietnam to Asian and European markets. Currently, Dong Hung Company has two product lines serving domestic market, including Ananas shoes serving students with the best quality, reasonable prices; and HUG - a premium brand. Mr. Ha believes that the strength of the company is specifying their suitable market segment and has the potential to develop a high-quality brand name at reasonable price. Dong Hung's products are always priced equally to end-products, then delivered directly to customers without going through any distribution channels.This is the most powerful "weapon" for Dong Hung products to conquer the market and serve consumers.

To protect Vietnamese brands  

In recent years, industry and trade authorities have made great efforts to support businesses in implementing solutions, such as finding new replacement products to meet demands during the pandemic. In particular, the authorities pay special attention to enterprises that produce goods for the domestic market to maintain production, maintain the market, turn towards sustainable development.

The industry and trade branch also regularly organizes fairs and market days of high-quality Vietnamese goods to help businesses introduce Vietnamese goods to consumers, including leather footwear and handbags. Currently, with a population of more than 95 million, the estimated footwear demand in Vietnam in 2019 was about 190 million pairs (an average of nearly 2 pairs / person / year) and continued to increase, because people' income is increasing. Therefore, from well-known foreign brand names to domestic companies, all focus on the Vietnamese market. Many businesses expanded their production scale, innovated technology, equipment, and improved product designs to create many fashionable products that is suitable to demands of domestic consumers. Many Vietnamese shoe companies, such as VINA Shoes, T&T, Biti's, Bita's, Asia Shoes, Hong Thanh... have been favored by inland consumers. The biggest challenge to leather footwear and handbag companies is the 0% import tariff on goods circulating within the bloc or between ASEAN and China, so ASEAN countries and China have stepped up sales to Vietnam, increasing competitive pressure on the domestic market.

The domestic footwear market now has a paradox that while Vietnam footwear exports is ranked second in the world (after China), the number of exports in 2019 was over 1.2 billion pairs, turnover of 18 billion USD, but Vietnam still has to import over 100 million pairs of footwear of all kinds, worth nearly 1 billion USD, accounting for 60% of domestic demand. In addition, a large number of footwear, handbags are counterfeit goods that are imported into Vietnam and sold at very cheap prices, directly competing with Vietnamese brands. Nguyen Quang Vu said that due to the deep integration, it is also time for businesses to focus on the domestic market, call for Vietnamese people to prioritize using Vietnamese goods, thereby helping Vietnamese enterprises have a foothold on the "home market". "We are confident to be able to produce high-quality products that are not inferior to high-end products of big brands.

In addition, the authorities need to strengthen the market management, inspection of counterfeit goods in order to create good conditions for domestic enterprises' development. Consumers need to improve their knowledge, choose products that have clear origins to contribute to preventing counterfeiting", said Mr. Nguyen.

According to Tran Van Tung, acting Director General of Provincial Market Management Branch Office, in the coming time, this force would boost checking and handling counterfeit goods, goods of unclear origin... To gain good results, enterprises need to cooperate with the authorities, boldly report violations of trademark to functional agencies to solve strictly this problem.

Reported by Tieu My - Translated by Ngoc Huynh

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