Delight signal from footwear industry

According to the Binh Duong Leather and Footwear Association, the potential of the footwear industry is still great, contributing about 10% of the country's total export turnover each year. Particularly, leather and footwear companies in Binh Duong province in the past 7 months have contributed more than US$ 1.4 billion to the province's export turnover.

Expanded market

In July -2017, export turnover of footwear and leather industry in the province reached US$ 231 million, increased by 5.9% over the previous month. Generally, in 7 months of 2017, export turnover of leather and footwear of the province reached US$ 1.430 billion, up 18.3% over the same period, accounting for 9.2% of total export turnover of the province. Leaders of footwear businesses said that the export turnover of leather and footwear of the province will grow at an average of 3 - 4% per month from now until the end of the year. Besides, the price of footwear materials is stable so it is very convenient for businesses to expand their market share.

Footwear products of Binh Duong have been exported to American market, European Union and some Asian countries. The biggest rivals in the domestic footwear industry are the Chinese enterprises. However, with the advantage of cheap labor force, leather shoes nationwide in general and Binh Duong in particular is still attractive destination for foreign investors.

According to Binh Duong Footwear Association, enterprises should pay more attention to domestic market. In this photo: Workers are working at Dong Hung JSC (Tan Dong Hiep A Industrial Park in Di An Town). Photo: Xuan Thi

According to Lefaso, in the first 6 months of 2017, exports of footwear industry reached US$ 8.7 billion, up 11% over the same period in 2016; of which, footwear exports reached US$ 7 billion, bags - US$ 1.65 billion. At present, the southern area is home to the most footwear factories in the country, accounting for over 80% of the sector's export turnover.

Domestic enterprises should make more endeavors

An unnamed representative of Binh Duong Footwear Association said that the foreign invested enterprises have been dominant in export of footwear and bags. In 2016, this sector accounted for 80.5% of the total export turnover of the provincial footwear industry. Meanwhile, due to difficulties in capital and market access, local companies have not been able to expand production, the proportion of footwear export of domestic enterprises continues to decrease from 25% In 2013 to 18.7% in the first five months of 2017.

Nguyen Quang Vu, Chairman of the Binh Duong Leather and Footwear Association, said that domestic enterprises are facing difficulties in increasing salary, increasing productivity and applying new scientific and technical advances. Production is slow due to lack of funds. To compete well in the market, these businesses need more efforts.

Leader of Lien Phat Footwear Co. Ltd. shared the forecast that labor demand from now until the end of the year will increase by 20% per month on average. The increase in human resources for ordering services has led to pressure to increase salaries, bonuses and other allowances for employees. However, businesses are aware of the expansion of export markets are favorable momentum, the immediate difficulties will be solved by leather businesses early to bring the footwear industry of Binh Duong firmly standing in the market.

According to Vu, it is noteworthy of the domestic firms that they are focusing more on the domestic market. The brand shoes such as Thanh Binh, Thuong Dinh, and Prowin are firmly established in the domestic market by product quality and competitive price compared to imported goods.

"However, businesses still have to maintain more efforts and efforts in the coming period, because the leather and footwear market has many competitors from Asia such as Laos, Cambodia, Malaysia and Thailand. In addition to China, Southeast Asia will become a supplier of footwear to the global market," said Vu.

Reported by Xuan Vi – Translated by Vi Bao