NATIONAL ECONOMICS UNIVERSITY

SCHOOL OF TRADE AND INTERNATIONAL ECONOMICS

GROUP ASSIGNMENT

TOPIC: EXPORTING VIETNAM’S

FOOTWEAR TO OTHER COUNTRIES

Supervisor : Assoc.Prof.Dr. Nguyen Thuong Lang

Tel : 0983478486,
Email : langnguyen2200@gmail.com
langnt@neu.edu.vn
Student name : Lê Đinh Minh ( ID: 11183324)
Nguyễn Nam Long (ID: 11183079)
Email : ledinhminhmh@gmail.com
Student Tel : 0388785117
Major : International Economics
Class : International Economics 60 A
Type of Education : AEP

Hà Nội, 2/2020
 DECLARATION
I assure you that this exercise is completely done by my group ( Lê Đình Minh
and Nguyễn Nam Long). The citations and materials used in this exercise are
completely honest, cited and ensure the highest accuracy to the best of our
knowledge. If these stated above are not true, we assume full responsibility for
our exercise.
Hanoi, 04/02/2020
Students: Lê Đình Minh
Nguyễn Nam Long
ACKNOWLEDGEMENT
First of all, I would like to express my deep thanks to NEU lectures and lectures
from School of Trade and International Economics for teaching and imparting to
us the knowledge and valuable experience.
I want specially thank to Assoc.Prof.PhD Nguyen Thuong Lang, who was a
constant source of inspiration throughtout the study as his insights provided us
opportunity to explore varied perspectives. During the course of work, we have
accumulated useful knowledge and learned the spirit of effective and
professional type of working. These are very essential for us in the learning
process and in the working environment in the future.
Finally, I would also take this opportunity to thank my friends and my family for
their support all through the research period, wherever necessary.
Hanoi, 04/02/2020
Students: Lê Đình Minh
Nguyễn Nam Long
TABLE OF CONTENTS
INTRODUCTION
CHAPTER 1: Basis, experience and lessons for Vietnam about 16
exporting
1.1. Position, function and organizational structure of the Export 16
Department of Vietnam Ministry of Industry and Trade
1.1.1. Position and function 16
1.1.2. Organizational structure 17
2.1. Experiences and lessons for Vietnam 18
2.1.1. The situation of footwear production and export in China and in 18
the world
2.1.2. Experiences and lessons 21
CHAPTER 2: Situation of footwear export market in Vietnam 23
2.1. Vietnam's economic situation 2015-2019 23
2.2. Production status 25
2.2.1. Footwear Export market 25
2.2.1.1. Production Structure 26
2.2.1.2. Export value 26
2.2.2. Structure and Policy 27
2.2.2.1. Difficulties of Vietnam’s footwear market 27
2.2.2.2. Incentive policies of the Vietnamese Government 28
2.3. Effect of the policy 28
CHAPTER 3: Orientation and Solutions for the future 37
3.1. Oppotunities and challenges 37
3.1.1 Opportunites 37
3.1.2. Chanllenges 38
3.2. Orientation and Solutions for the future 40
3.2.1. Goals to 2030 40
3.2.2. Development orientation 42
CONCLUSION 43
REFRENCES 45
 TABLE OF ABBREVIATIONS

AFT Agency of Foreign Trade

CPTPP Comprehensive and Progressive Agreement for Trans-
Pacific Partnership
EAEUFTA Europe-Asia Economic Union Free Trade Agreement
EVFTA Europe-Vietnam Free Trade Agreement
EU Europe Union
FDI Foreign Direct Investment
FTA Free Trade Agreement
Lefaso Vietnam Leather, Footwear and Handbag Association
RCA Revealed Comparative Advantage
RMB Renminbi
SME Small and Medium Enterprise
WTO World Trade Organization

LIST OF TABLES AND FIGURES

Type Name Page

Table 1.1 Struture of The Import and Export Department 17
Table 1.2 Share of the world footwear by continent (2010- 18
2015)
Table 1.3 Top 10 largest footwear exporting countries in 18
the world (2010-2015)
Table 1.4 Hong Kong's footwear industry size 30

Table 1.5 Value and growth of Hong Kong footwear 32

exports
Tabe 1.6 Import and export Hong Kong's footwear by 33
market
Table 1.7 Import and export Hong Kong's footwear by item 34
Table 2.1 Some indicators of Vietnam’s economy 47
Table 2.2 Top 10 footwear producers (Quantity) 2017 50
Table 2.3 Top 10 Exporters (Quantity) 2017 51
Table 2.4 Imported value of raw materials 54
Table 3.1 Plan of footwear industry to 2030 67
Figure 1.1 Global footwear market growth 2010-2015 19
Figure 1.2 Top 10 countries has the largest footwear export 19
turnover in the period 2012-2015
Figure 1.3 Footwear export turnover to Brazil 47
Figure 2.1 Vietnam’s economic growth rate 2015-2019 48
Figure 2.2 Export of footwear and bags from 2015-2017 52
Figure 2.3 Export market of the whole industry in 2017 53
Figure 2.4 Development trend of the supporting industry 61
 INTRODUCTION

1. Rationate

In the context of international economic integration, Vietnam has obtained

significant achievements in exporting activities. Many products have become
key exports, including footwear. Now Vietnam is one of the four largest
footwear manufacturers in the world, after China, India and Brazil; and the
second biggest footwear exporter, just after China. Vietnams footwear products
have been exported to over 50 countries and territories worldwide.
Vietnam is currently the 3rd largest footwear producer in Asia after China, India,
and 4th in the world. Vietnam currently produces about 920 million pairs of
shoes a year, exporting more than 800 million pairs to more than 50 markets
around the world, of which the European Union (EU) accounts for the largest
proportion.
According to the General Statistics Office, in the first 10 months of 2019,
exports of footwear and bags and umbrellas brought in US $ 17.67 billion, up
11.5% over the same period, of which footwear reached 14, 06 billion USD;
handbags reached 3,070 billion USD. With the implementation of about US $
1.35 billion / month of footwear, US $ 300-350 million / month of bags and
year-over-year orders that have been completed, the export of this sector is likely
to reach 21.7-21.8 billion USD in 2019, exceeding the set target of 21.5 billion
USD.
Currently, Vietnam is ranked second (behind China) in terms of footwear export
volume to the world market with more than 1 billion pairs of shoes each year.
Notably, the average export price of the world is 9.81 USD / pair, while
Vietnam's price is 15 USD / pair, 1.6 times higher than the world average price.
Thus, the quality of Vietnam's footwear products has been improved and
recorded.
The trade war between the US and China is increasing, beginning to affect
Vietnam's exports and imports. Promote FDI investment in footwear sector
increased in 2018 - 2019, avoiding the impact of the US-China trade war and
anticipating effective FTAs in 2019. Therefore, footwear exports of 2019
continue to increase thanks to the increase of FDI export.
 China now ranks first in manufacturing and exporting footwear in the world. As
China's labor costs are high, multinational corporations tend to relocate their
factories to neighboring countries to save costs while still finding materials.
Vietnam is an alternative destination in this problem. In addition, many free
trade agreements (FTAs), which have been signed with the Eurasian Economic
Union, Korea, EU, CPTPP, etc., are also opening opportunities for Vietnam's
footwear exports. Although Vietnam's labor costs are increasing but still lower
than China and Thailand, the opportunity for big brands to pay attention to the
Vietnamese market and Vietnamese enterprises is huge.
With these positive results and positive signs, Lefaso( Vietnam Leather,
Footwear and Handbag Association) predicts that demand for footwear products
in Vietnam's main export markets will continue to increase in 2020. According
to international experts, from 2020, the risk of confrontation with US-China
trade, between the US and other trading partners in Europe and India will
gradually decrease and the global economy will gradually recover. Footwear
processing orders continue the trend of moving from China to Vietnam to take
advantage of preferential tariffs from FTA agreements, replacing China's export
decline. Along with that, the FDI sector continues to invest in new and expanded
production, which will help the footwear industry maintain export growth.
Lefaso predicts that by 2020, the average industrial production index of the
leather and footwear industry will increase by 11%, the localization rate of
products will reach 60%, export turnover will reach US $ 24 billion, and
maintain the growth rate of 10 % compared to 2019.
Facing opportunities with the difficulties of the footwear export market, the topic
‘Exporting Vietnam’s footwear to other countries’ was chosen by us.

2. Literature review
2.1. SCIENCE & TECHNOLOGY DEVELOPMENT MAGAZINE, VOL.
20, NUMBER Q2 – 2017.

Abstract: This research identifies industries Vietnamese goods have a

comparative advantage based only comparative advantage index number (RCA –
Revealed Comparative Advantage), photo elements affect growth and export
trends. From the analytical results, the research put issue policy
recommendations to promote benefits Vietnam's position in trade relations with
ASEAN.

2.2. DISSERTATION OF MBA‘SOLUTIONS TO PROMOTE THE

EXPORT OF VIETNAMESE GOODS TO INDIA’-Dam Hai Van,
INSTITUTE OF HAN LAM SCIENCE AND SOCIETY VIETNAM
ACADEMY OF SOCIAL SCIENCE.
Abstract: Analyze and assess the current situation of Vietnam's exports to India
and the impact factors, thereby proposing a number of scientific and practical
solutions to boost Vietnam's export of goods to India.The thesis provides
practical theoretical issues in applying the theory of export in general and the
export activities of Vietnamese enterprises to India in particular to thereby
improve the efficiency in operations. Export of Vietnamese enterprises to India
in the following years.

2.3. Enhancing the competitiveness of Vietnam's exported footwear

products: Content and influencing factors - PhD. NGUYEN THI PHUONG
(Business Administration Department - University of Industrial Economics
and Technology).

Abstract: The article mentions the enhancement of competitiveness of Vietnam's

exported footwear products. The content of the article consists of 3 parts: (1)
Introduction; (2) The content of evaluating the competitive advantage of
Vietnam's exported footwear products; (3) Factors affecting the competitiveness
of Vietnam's exported footwear products.

2.4. THE ECONOMIC THESIS OF THE ECULLICALLY PROMOTES

EXPORT TO THE EU MARKET OF FOOTWEAR ENTERPRISES IN
HANOI AREA - DUONG VAN HUNG-NATIONAL UNIVERSITY OF
ECONOMIC.

Abstract: On the basis of analyzing the actual export situation of footwear

enterprises in Hanoi, applying the theory of promoting exports, proposing
directions and solutions to boost exports to the EU market of footwear
enterprises in Hanoi.
2.5. STUDY ON THE PERFORMANCE OF EXPORTING LEATHER
FOOTWEAR SMEs IN INDIA - BIANKA RAY CHAUDHURY
-DEPARTMENT OF BUSINESS ADMINISTRATION FACULTY OF
MANAGEMENT STUDIES & RESEARCH ALIGARH MUSLIM
UNIVERSITY ALIGARH-202002 (INDIA).

Abstract: The present research study attempts to contribute by examining the

performance of the exporting SME leather footwear units with respect to their
specific demography, internal environment and external environment in which
they operate and despite these factors significantly affect the export performance
at large. It is hoped that the findings of this study would provide an insight to the
areas where the exporting firms should immediately upgrade themselves and also
the capacities where the government should intervene and act in order to bring a
marked difference in the export performance in the leather footwear sector.
2.6. Research solutions to develop supporting industries of Vietnam Textile
and Footwear industry in a new context.-Vu Thi Dao - Information and
Industry and Trade.
Abstract: The thesis analyzed clearly the new context affecting the development
of supporting industry of textile and footwear industry, which is economic and
social development associated with the environment, opportunities and
challenges created by FTAs, the impact of the industrial revolution 4.0. The
proposed solutions are built on the basis of analyzing the current situation of
development of supporting industry of textile and footwear industry, focusing on
analyzing the shortcomings (including policy), then proposing solutions to
remove. overcome difficulties for SI in the textile and footwear industry. This
contributes to helping state management agencies devise development strategies
and policies that are appropriate to reality.
2.7. Review of Vietnam export activities in the period of 2010-2014 - Duong
Thi Thanh Mai-MSc Forestry University.

Abstract: The study goes into analyzing the current situation of Vietnamese
goods export in the period of 2010-2014, based on the factors of scale, export
growth rate, structure of export goods and export markets. The study pointed out
the successes and limitations of Vietnam's goods export activities as well as the
opportunities and challenges for Vietnam's exports. On that basis, proposed some
basic solutions to boost Vietnam's export in the future.

2.8.EXPORTING FOOTWEARS IN VIETNAM AND SOME

RECOMMENDATIONS- Vu Thi Hanh (http://tapchi.ftu.edu.vn)

Abstract : The article analyzes Vietnam's export activities in the context of the
world market with much competition from major competitors from EU countries
and especially the important role of China in spending. coordinate the world's
footwear production. The paper uses statistical research methodology,
synthesizing data from the General Department of Vietnam Customs to evaluate
factors affecting the country's footwear export. Vietnam's footwear export
turnover increased in 2016 and is expected to increase in 2017. Countries such as
Taiwan, the US, South Korea and Hong Kong are among the top 10 countries
with large footwear import turnover. Most from Vietnam in 2016 but 9 out of 10
enterprises with the largest footwear export turnover of Vietnam in this year are
FDI enterprises from Taiwan.
2.9. Research report of New Zealand footwear market - Source: New
Zealand deal References: Statistical data - New Zealand Statistical Office;
US Trade Service Agency reports…
Abstract : An overview of the New Zealand footwear market over the years. The
unilateral tax reduction program is one of the subsequent routes of economic
reforms since the 1980s in New Zealand with the main objective of creating
greater efficiency in industries by creating a more competitive environment from
opening markets, reducing import taxes, and giving local producers access to
raw materials. and imported components.

2.10. China's Shoe Manufacturing and the Wenzhou Model: Perspectives on

the World's Leading Producer and Exporter of Footwear, Y. H. Dennis Wei.

Abstract: A U.S.-based geographer and specialist on China advances his research

on industrial districts and regional development by presenting a 2008 study of
shoe manufacturing in Wenzhou (a major center in the world's largest footwear
producing and exporting country). More specifically, the author examines how
the model of economic development pioneered in Wenzhou (the Wenzhou
model) has been transformed in an effort to meet the challenges posed by the
global economy. He argues that the scaling up of Wenzhou's footwear industry,
through the expansion of sales networks and factories across China and abroad,
indicates that other adaptable city regions can overcome similar obstacles. The
author challenges both the New Regionalism literature focused on local
institutions and assets, as well as perspectives that overemphasize the benefits of
globalization and global production networks. Journal of Economic Literature,
Classification Numbers: O100, O140, O180. 2 figures, 3 tables, 60 references.
2,11. Huichong Li, University of Windsor, An examination of the sources of
competitive advantage in the Wenzhou (China) footwear industry.
Abstract: The purpose of this thesis is to explore the sources of competitive
advantage in the Wenzhou, China footwear industry. China produces 52% of the
world's footwear and Wenzhou is its most important production region
accounting for 25% of the country's output. In addition Wenzhou's enthusiastic
transition to a free market economy is well known in China as the Wenzhou
Economic Model. These two facts, the industry's importance and the region's
transition toward capitalism, make it an interesting subject for research on
competitive advantage. The research begins by applying Michael Porter's
framework on the competitive advantage of nations to the case of the Wenzhou
footwear industry. In addition to assessing the industry on each of the four
factors comprising Porter's model: (1) factor endowments, (2) related and
supporting industries, (3) the nature of demand conditions and (4) firm strategy,
structure and rivalry, the research also discovered other factors only loosely
considered by Porter. These included the role played by the local government
and community leaders in such initiatives as the creation of a "Wenzhou" brand
and the establishment of the annual Wenzhou Footwear Fair which helps to
showcase the city as a world centre for the footwear industry. The impact of
China's recent entry into the World Trade Organization on both the footwear and
supporting industries was also analyzed. The research concludes that elements of
Porter's framework play a essential role in the region's competitive advantage.
However it also concludes that role of the government in supporting the industry
and creating initiatives such as the Trade Fair, industrial parks and the promotion
of the Wenzhou brand is also critical.

2.12. Lean management practices to improve supply chain performance of

leather footwear industry
Shakila Shobana Theagarajan
Planning, Monitoring and Evaluation Department, CSIR-Central Leather
Research Institute, Adyar Chennai, India
Hansa Lysander Manohar
Department of Management Studies, College of Engineering, Guindy
(CEG), Anna University, Chennai, India

Abstract: Leather Industry in India is among the top ten foreign exchange earners
and export of footwear contributes to 44 % of the total export of leather and
leather products from India. The demand for leather footwear is highly
fluctuating leading to bullwhip effect and its price elasticity adds to further
complications. Lean management practices are applicable to all sectors.
However, suitable models need to be developed for different sectors. The
purpose of this paper is to identify the set of lean practices adoptable in footwear
sector and to investigate the synergistic effects of lean management practices on
supply chain operational performance of footwear sector. Lean concept is not
only applicable to production but can also be extended to supply chain to
improve the supply chain operational performance. The enhancing attributes of
Supply Chain Operational Performance (SCOP) specific to footwear industry has
been identified and prioritized. A comprehensive set of lean management
practices were scrutinized based on its applicability in the footwear sector and a
model is designed to maximize supply chain operational performance of the
footwear sector.
2.13. Rajdeep Singh, FACTORS AFFECTING BRAND LOYALTY IN
THE FOOTWEAR INDUSTRY – A STUDY OF LUDHIANA DISTICT

Abstract: The dynamic competitive environment has changed the way the
businesses were run in the past. The increased awareness of the customers along
with increase in the number of options available to them has completely
revolutionized the marketing task. In the current scenario a greater need is felt
for long term relationships with the customers so as to enjoy repeat sales. The
business organizations these days are laying focus on enhancing the brand
loyalty among the consumers to reap the benefits of repeat sales. The present
study, therefore, is an endeavor to investigate the factors that affect brand loyalty
in the footwear industry. Simultaneously an attempt has been made to identify
the most sought after brand in the footwear industry. A sample of 100
respondents was selected from the Ludhiana region. Statistical techniques of
correlation and multivariable regression were used. The results depicted that out
of the total fourteen identified factors, twelve factors had significant relationship
with brand loyalty. Proper pricing techniques and customer satisfaction were the
dominant variables in affecting brand loyalty towards a footwear brand.
2.14. Hubert Schmitz, Global Competition and Local Cooperation: Success
and Failure in the Sinos Valley, Brazil.

Abstract: Recent cluster literature suggests that joint action is essential for
responding successfully to major challenges. This article investigates whether
enterprises in the export-oriented Sinos Valley (South of Brazil) have stepped up
cooperation in response to intensified global competition in leather footwear.
Using a combination of quantitative and qualitative methods, it shows a
substantial increase in bilateral vertical cooperation, contributing to a major
advance in raising product quality, speed of response and flexibility. In spite of
these advances, the cluster has not been able to raise exports and profits have
fallen. This seems related to the fact that upgrading was largely limited to the
sphere of production. Upgrading in other areas such as marketing, design and
image was attempted in an ambitious program of multilateral cooperation. The
program failed for two reasons: some leading enterprises put their alliance with a
major global buyer above cooperation with local manufacturers; and the state
failed to mediate at critical moments between conflicting business associations
and entrepreneurial alliances. The paper concludes with suggestions for future
research on global competition and local upgrading.
2.15. Schmitz, Huberts, Responding to Global Competitive Pressure:
Local Co-Operation and Upgrading in the Sinos Valley, Brazil.

Abstract: This paper investigates whether enterprises in the export-oriented

Sinos Valley (South of Brazil) have stepped up co- operation in response to
intensified global competition in leather footwear. Recent cluster literature
suggests that joint action is essential for responding successfully to major
challenges. Using a combination of quantitative and qualitative methods, the
paper shows a substantial increase in bilateral vertical co-operation, contributing
to a major advance in raising product quality, speed of response and flexibility.
In spite of these advances, the cluster has not been able to raise exports and
profits have fallen. This seems related to the fact that upgrading was largely
limited to the sphere of production. Upgrading in other areas such as marketing,
design and image was attempted in an ambitious program of multilateral co-
operation. The program failed for two reasons: some leading enterprises put their
alliance with a major global buyer above co-operation with local manufacturers;
and the state failed to mediate at critical moments between conflicting business
associations and entrepreneurial alliances. The paper shows that the centrifugal
forces of globalisation make local co-operation increasingly difficult and
concludes with suggestions for future research on global competition and local
upgrading.
3. Aims and tasks of the research.
3.1. Aims of the research.
On the basis of analyzing the situation, assessing the results as well as the
restrictions of Vietnam’s footwear export market to other countries in the period
of 2015-2019, thereby proposing orientations and solutions to expand Vietnam’s
footwear export market in 2020 and vision to 2030.
3.2. Tasks of the research.
To achieve the research aims, the topic needs to perform the following tasks:
1, Introduce about the research basis.
2, Analysis the situation of Vietnam’s footwear market to other
countries in the period of 2015-2019.
3, Point out assessments and achieved results as well as the restrictions.
4. Subjects and Scope of study.
4.1. Subject : Vietnam’s footwear export market
4.2. Scope of study: Export Vietnam’s footwear to other countries and
orientation to 2030.
5. Methods of research.
Use methods of analysis, synthesis and comparison to solve problems.
Data are collected from Customs office, General Statistics Office and World
Bank.
6. Structure of research topic.
In addition to the Introduction, the Conclusion, the table of contents and the
References, the topic consist of 4 main parts:
Chapter 1: Basis, experience and lessons for Vietnam about exporting.
Chapter 2: Situation of footwear export market, in Vietnam.
Chapter 3: Orientation and Solutions for the future.
 CHAPTER 1:
Basis, experience and lessons for Vietnam about exporting.

1.1. Position, function and organizational structure of the Export

Department of Vietnam Ministry of Industry and Trade.
1.1.1. Position and function.
* The Import and Export Department is an organization under the Ministry of
Industry and Trade, performing the function of advising and assisting the
Minister of Industry and Trade in state management and organizing law
enforcement in the field of operation, export and import of goods, origin of
goods, purchase and sale of international goods, agents of purchase, sale,
processing and transit of goods with foreign countries, under the state
management of the Ministry of Industry and Trade.
* The Import and Export Department has the legal entity, its own seal and
account according to the provisions of law, operation funding is provided by the
state budget and from charges and fees collected in accordance with the State
regulations.
The Import and Export Department has an international transaction name in
English: Agency of Foreign Trade.
Abbreviated name: AFT.
Head office in Hanoi city.
In addition, The Import and Export Department also performs other duties and
power as required by The Ministry of Industry and Trade.
1.1.2. Organizational structure.

Table 1.1: Structure of The Import and Export Department

Office
General Policy Department
Department of Origin
Import and Export Department of Industrial
Helping Department of the Products
Director Import and Export Department of Agicultre-
Forestry-Fisheries
International marketing department
Department of Trade facilitation
Hanoi Export-Import Management Department
Ho Chi Minh City Department of Export-
Import Management
Hai Phong Regional Export-Import
Management Department
Da Nang Export-Import Management
Department
Lang Son regional Export-Import Management

Regional Import-Export Department

Quang Ninh Export-Import Management
Management Offices under the
Department
Import and Export Department Lao Cai Regional Export-Import Management
Department
Thanh Hoa Export-Import Management
Department
 Thai Binh Export-Import Management
Department
Department of Export-Import Management in
Ninh Binh area
Department of Export-Import Management in
Binh Tri Thien area
Import-Export Management Department in
Khanh Hoa area
Import-Export Management Department in Ha
Tinh area
Department of Export-Import Management of
Hai Duong area
Dong Nai Import-Export Management
Department
Department of Export-Import Management of
Binh Duong area
Export-Import Management Department of
Vung Tau area
Department of Export-Import Management of
Can Tho area
Tien Giang Regional Export-Import
Management Department

Source: Ministry of Industry and Trade of the Socialist Republic of Vietnam.

2.1. Experiences and lessons for Vietnam.

2.1.1. The situation of footwear production and export in the world and
China, Brazil, HongKong, India and Indonesia.
The leather and footwear industry has grown very fast and is considered to be
one of the main industries bringing the economy of many developed countries.
Leather and footwear is one of the industries that bring the largest export
turnover at present, accounting for a large proportion of the total export turnover.
In the world, the development of the footwear industry is concentrated in some
continents, with other continents having negligible proportions.

Table 1.2: Share of the world footwear by continent (2010-2015)

Continent 2010 2011 2012 2013 2014 2015

Africa 2% 3% 2% 2% 3% 2%
Asia 87% 87% 87% 87% 88% 87%
Euro 4% 3% 4% 4% 3% 4%
North 2% 2% 2% 2% 2% 2%
America
Oceania - - 1% - - -
South 6% 5% 5% 5% 5% 5%
America

Source: World footwear yearbook 2011-2016

Asia is still the world's largest footwear producer and exporter with nearly 90%
of the world share. Asia has shown its superiority over other regions.

Table 1.3: Top 10 largest footwear exporting countries in the world (2010-
2015)
Rank Nation Pairs (miliions) Density (%)
1 China 11129,5 76,9
2 Vietnam 539 3,6
3 Hongkong 383 3,3
4 Brazil 324.8 2,21
 5 Indonesia 304 1,5
6 Belgium 240 1,45
7 Italia 223 1,3
8 Thailand 205.3 1,25
9 Germany 186.6 1,2
10 Netherlands 149.3 1,05
Source: World footwear yearbook 2011-2016

China and Vietnam are still the two largest footwear exporters in the world, on
average higher than the world. In addition to other regions of Asia, Europe also
has a strong rise in this area. The rise of these regions creates greater competition
in footwear production and export as well as expanding export markets.

Figure 1.1: Global footwear market growth 2010-2015

Source: World Footwear
worldfootwear.com
The footwear market has increased steadily over the years and made a great leap
from 2013 to 2014. After that, the cycle of increase and production continued.

Figure 1.2: Top 10 countries has the largest footwear export turnover in the
period 2012-2015
Source: World Footwear
worldfootwear.com

China
China and Vietnam account for more than half of the world's footwear export
turnover, of which China holds 51.86% of the turnover and Vietnam holds
9.84% of the turnover. The remainder of the turnover is divided into different
regions of the world.

The footwear industry in China has long been the number one in the world, with
China retaining its dominant position as the world’s largest footwear
manufacturer and biggest footwear exporter in the global market. Fierce
international competition has been a general trend in the industry, with an
increasing amount of global manufacturers gravitating towards Southeast Asia as
a preferred destination for manufacturing products, this has reduced the output of
products from China’s footwear industry in recent years, but the country is still
expected to be the world’s top footwear supplier over the next few years.
According to the latest market reports from Euromonitor, total sales from
China’s footwear industry reached RMB 370 billion (US$56.7 billion) in 2016,
and it is expected that the market will continue to grow at an average annual rate
of 7% through 2020. The fastest growing product segment in China’s footwear
industry over the last few years was leather shoes. Leather shoe output has
grown steadily at an estimated annualized rate of 1.5% over the recent years.
The growth of China’s footwear industry is also driven by increasing global
footwear demand, especially for products like running shoes, boots, wedding
shoes, women shoes, and other famous footwear categories. China has been the
world’s largest suppliers of all these kinds of footwear products for decades. In
2016, China exported $47.2 billion worth of footwear to the global market,
representing over 35.5% of the world’s total footwear exports in that year. The
USA, Germany, France, UK and Italy and major countries in the Middle East are
currently the largest exporting markets for China’s footwear products.
For future prospects, footwear manufacturers in China are likely to implement
omnichannel distribution strategies to improve their competitiveness in the
domestic market, while further reducing the cost and increasing the quality of
exported products. Some leading Chinese footwear brands also plan to adopt an
omnichannel sale strategy for the global market, brick-mortar sales and e-
commerce channels across the globe will also be of top priority.
China’s leading position in the global footwear market has also attracted
significant numbers of buyers and traders from all over the world the hope to
source the best business deals in the country. To help your footwear business
stay at the peak of the industry, BizVibe provides the most effective to source
products and make business deals with the top footwear manufacturers in China.
The state of the footwear industry in China is expected to stay promising for the
foreseeable future.
Brazil
Local footwear companies exported about 10 million pairs of shoes in August,
up 10.6% from the same period in 2015, according to Abicalçados.
The Brazilian Association of Shoe Manufacturers (Abicalçados) estimates that in
August, Brazil exported footwear worth US $ 87.7 million. This represents an
increase in both quantity (+ 10.6%) and value (27%) of exported footwear, when
compared with the same period in 2015. As of the first eight months of this year,
Brazil exported 76.5 million pairs of shoes, with a total value of USD
617,800,000, reflecting increases of 2.6% and 0.8%, respectively.
Heitor Klein, executive chairman of Abicalçados, said that the slight recovery of
Brazilian footwear exports was the result of a series of strong operations by local
companies at the international trade fair during the In recent months, despite the
economic crisis and exchange rate fluctuations.
The main destinations for footwear exports between January and August are the
United States, with sales to the country reaching 8,000,000 pairs with a total
value of 1401 million USD. Next is Argentina with 6 million pairs of export,
totaling USD 67,440,000. France ranked in the top 3 main destinations (with
5.37 million pairs; accounting for 37.3 million USD). This is to emphasize that
exports to both the United States and Argentina have increased during this period
(both in volume and value), but France has registered to reduce the performance
of exports and sales.

According to the World Footwear Yearbook, in 2015 Brazil was the 5th largest
producer of footwear with 877 million pairs and accounted for 3.8% of the world
quota.
In the first 11 months of 2019, Brazil exported 104.2 million pairs of shoes with
a turnover of US $ 886.3 million, up 3.8% in volume and 0.9% in value over the
same period in 2018.
Executive Chairman of the Brazilian Footwear Association (Abicalçados),
Haroldo Ferreira, said the results were largely influenced by the trade war
between the US and China, thus slowing down the international economy, along
with It was the crisis in Argentina. The United States continues to be the main
export market for Brazil in the first 11 months of 2019.
A total of 10.86 million pairs of shoes worth US $ 181.66 million were sold to
the US, up 26.5% in volume and 28.2% in value over the same period in 2018.
The second destination is Argentina, in the first 11 months of 2019, Brazil
exported 9.32 million pairs of shoes with a turnover of US $ 98.32 million, down
18.3% in volume and 27% in value compared to same period last year.
With positive results in terms of value (up 4.1%) and volume (up 9.8%), France
is Brazil's third export destination for footwear. In the first 11 months of 2019,
France imported 7 million pairs of shoes worth $ 52.47 million.
Brazil and Vietnam
Import turnover of footwear from Vietnam reached 148 million USD, accounting
for 48%, is the largest footwear exporter to the Brazilian market.
According to a report of the Brazilian Footwear Association (Abicalcados), in
the first 9 months of 2019, the country's total footwear import turnover reached
about US $ 311 million. In particular, the import turnover of footwear items
from Vietnam reached 148 million USD, accounting for 48%, thereby, Vietnam
maintained its position as the largest footwear exporter to Brazil. .
The Abicalcados report says that Brazil has a highly developed footwear
industry thanks to the abundant supply of raw materials from the animal
husbandry and tanning industries that have been developed for years. Every year,
the export value of Brazilian leather and footwear industry reaches over US $ 1.0
billion, but mainly of products from natural leather.
Meanwhile, due to consumption habits (recreational activities, sports,
entertainment), the segment of sports goods, footwear from synthetic materials
dominates. According to Abicalcados, sports shoes account for 53.2% of the
value and 75.4% of the total number of imported footwear products, followed by
other footwear products (made from materials. plastic and rubber).
China used to be known as a leading exporter of shoes and the Brazilian market,
but now, Chinese shoes are subject to anti-dumping duty of absolute value up to
dozens of USD / pair. competitiveness has been reduced, creating opportunities
for goods produced from other countries, including Vietnam.

Figure 1.3. Footwear export turnover to Brazil

Soure: General Statistics Office
 It is worth noting that the Vietnam Trade Office in Brazil also regularly
provides information on the use of host country's trade remedies. Accordingly,
Brazil is a regular country and uses measures to protect domestic production,
some export items of Vietnam have been applied safeguard measures such as
anti-dumping, technical barriers. ...
Particularly for shoes, Brazil has also given a certain warning, businesses need to
regularly contact and cooperate with customers and associations representing
importers to promptly explain, adjust or take appropriate policy advocacy to
avoid the application of safeguard measures, keeping market vocabulary and
market share.
Currently, Vietnam is leading the export turnover of footwear to Brazil, but the
import tax is still very high (35%), which proves the good competitiveness of
Vietnamese footwear. However, in the long run, regional countries, especially
Mercosur members will dominate, while the Brazilian footwear market still has
strong growth potential. The Government should pay attention to take measures
to facilitate trade, expand markets with South America in general and Brazil in
particular.
HongKong
Hong Kong produces a wide range of footwear suitable for both indoor and
outdoor use. The strength of this industry is the production of women's shoes,
including ladies' and casual shoes made of genuine or synthetic leather, such as
boots and mules. Some companies specialize in men's casual shoes such as boat
shoes, moccasins, loafers and canvas shoes; while others focus on sports
products. In addition, more and more companies are focusing on children's
shoes.
Hong Kong's footwear export turnover dropped by 7% in the first 5 months of
2017. The re-export turnover, which almost occupied the footwear export
industry of Hong Kong in the same period, also plummeted, while Domestic
export turnover has "slipped" up to 59%.
Hong Kong footwear companies such as Le Saunda, Miranbell, Staccato, and
Joy and Peace all focus on brand development. They sell their branded products
through retail stores and franchisees or partner with local partners in several
markets, including the Chinese market. In addition, some footwear companies
also enter the niche market with their own branded products, such as the Dr.
brand. Kong Footcare with healthy footwear products.

Table 1.4. Hong Kong's footwear industry size

10 (production company) – 12/2016
Number of companies 1.310 (import and export company) –
12/2016
40 (production company) – 12/2016
Number of employees 6.570 (import and export company) –
12/2016
Source: Quarterly employment data reports

Most manufacturing companies have built production facilities in China to

reduce production costs and improve competitiveness. The factories in Hong
Kong only serve small orders and need to be completed in a short time. A
number of manufacturing companies after setting up their production facilities in
foreign countries will be transformed into import-export companies. By the end
of 2016, Hong Kong had 1,310 import and export companies with 6,570
employees.
Table 1.5. Value and growth of Hong Kong footwear exports
2015 2016 1 – 5/2017
Value Growth Value Growth Value Growth
Domestic export 0,006 235% 0,001 -82% * -59%
Re-export 30,3 -10% 24,3 -20% 8,9 -7%
Originated from
26,1 -12% 20,5 -22% 7,3 -9%
China
total exports 30,3 -10% 24,3 -20% 8,9 -7%
*: small figures are not significant
Unit: billion Hong Kong dollars
Source: Hong Kong Bureau of Statistics and Investigation

Hong Kong's growth value is large but still largely dependent on China and the
re-exports. This has led to inadequacies in the development and quality
improvement of Hong Kong's footwear industry.

Table 1.6. Import and export Hong Kong's footwear by market

Unit: %

2015 2016 1 – 5/2017

World World World
Growth Growth Growth
share share share
The US 32,3 -13 30 -26 28,4 -10
China -12 9 14,3 -4 16,1 6
EU (28) 17,4 -22 14,6 -33 12,5 -19
Germany 3,6 -20 3,2 -30 2,7 -23
 The UK 3,1 -10 2,9 -25 2,2 -27
Netherlands 3,7 -11 3,2 -31 2,0 -32
Italia 2,4 -31 1,9 -37 1,7 -29
Macau 3,8 -1 5,0 5 5,9 6
Japan 6 -17 5,9 -22 5,3 -23
Vietnam 1,5 -26 2,5 35 3,9 54
Australia 3,5 11 3,3 -24 3,3 -7
Source: Hong Kong Bureau of Statistics and Investigation

Hong Kong's footwear market is increasingly trying to expand its market to the
world. Although it’s number not impressive, but in the future Hong Kong will be
one of the major counterparts in the world in this field.

Table 1.7. Import and export Hong Kong's footwear by item

2015 2016 1 – 5/2017
Market Market Market
Growth Growth Growth
share share share
Finished footwear 91,4 -11 88,1 -23 85,6 -10
Rubber or plastic
15,1 -2 15,1 -20 16,2 -8
material
Fabric material 13,4 -4 15,0 -10 16,5 1
Leather material 62,7 -14 57,6 -26 52,6 -13
Other materials 0,2 -38 0,3 38 0,2 -12
Accessories and
8,6 3 11,9 11 14,4 10
structural parts
Unit: %
Source: Hong Kong Bureau of Statistics and Investigation
After plummeting 20% last year, Hong Kong's footwear exports in the first 5
months of 2017 continued to fall by 7%. The re-export turnover, which almost
occupied the footwear export industry of Hong Kong in the same period, also
plummeted, while the domestic export turnover had a "long slide" up to 59.
The United States continues to maintain Hong Kong's largest footwear importer,
accounting for 28% of total exports in the first 5 months of 2017, but down 10%
compared to the same period last year. Right after the United States is China, EU
and Macau with the proportion of total turnover respectively 16%, 13% and 6%.
In the first 5 months of 2017, Hong Kong's footwear export turnover to the EU
market decreased by 19% with specific reductions in Germany, England,
Netherlands and Italy ranging from 23% to 32%.
Sales Channel
Many footwear companies in Hong Kong sign original spare parts (OEM)
contracts with many of the leading brands and retailers in North America, EU
and Japan. With the improvement of product design and development capacity,
engineering, modeling, equipment and quality management, more and more
Hong Kong footwear companies are engaged in “design” production projects.
original ”(ODM). Many companies have hired research and development (R&D)
and quality management experts to improve product quality. A number of
footwear companies such as Le Saunda, Mirabell and Joy and Peace have been
successfully building their own brands with retail systems in Hong Kong,
Macau, China and even the EU. While some footwear exporters prefer to work
with foreign importers and distributors, many companies sell their products to
major retail chains such as Walmart, Target, Costco and Kmart.
Some Hong Kong companies, owned by companies in Taiwan such as Yue Yuen
Industrial Holdings Limited, produce for famous brands including: Adidas,
Asics, Tiger, Bass, Converse, Le Coq Sportif, New. Balance, Nike, Reebokand
Timberland. A few companies have also been licensed to manufacture and
distribute foreign brands in China and Hong Kong.
In order to uncover domestic creative footwear design talents; At the same time
encouraging many suppliers in Hong Kong to improve their design capacity, the
Hong Kong Footwear Association and the Hong Kong Trade Development
Council jointly organize the annual "Hong Kong Footwear Design Competition".
The competition is not only an incubation of talents but it is also the driving
force behind the footwear design and the development of the Hong Kong
footwear industry. In 2016, the competition received more than 800 applications
showing great creativity while promoting the sustainable development of the
footwear industry. On the other hand, the "International Footwear Design
Competition" organized by the International Federation of Footwear
Associations (CIFA) is also a program for footwear designers to show their
talents.
In order to establish business relationships with foreign buyers, Hong Kong
producers and traders have actively participated in international trade fairs
organized by the Hong Kong Trade Development Council or sponsorship,
including fairs in Budapest, Dongguan, Dusseldorf, Dubai, Guangzhou, Istanbul
and Jakarta.
Hong Kong's footwear industry trends:
With the goal of reducing production costs, increasing productivity and
expanding product ranges, footwear manufacturers in Hong Kong have moved
most of their production facilities to China and Southeast Asian countries.
Because the leather industry is highly specialized and vertically linked, the
conversion of manufacturing facilities can also provide advantages to access to
raw materials and facilitate retail and distribution. In terms of increasing
production costs, companies have been investing more heavily in advanced
machines and automated operating systems, in addition to measures to change
production locations. set of production processes.
China is not only the world's largest producer and exporter of footwear, but also
plays the role of the world's largest footwear consumer market after surpassing
the United States in 2011. According to China's General Administration of
Customs, In 2016, China's footwear export turnover reached 311 billion yuan,
while turnover in this market reached more than 360 billion yuan.
Today's footwear manufacturers are focusing more on value added services.
Quick response to sample production, quick and high quality product delivery
are fundamental requirements at the present time. They are also exploring the
global green trend towards a sustainable economy by producing shoes from
recycled, environmentally friendly and "vegan" materials (ie materials that do
not contain products). derived or partially from animals). Well-known shoe
brands such as Reebok, Melissa, Bobux, Terra Plana, Nike and Timberland have
adopted environmentally friendly production processes and increased "green"
footwear models such as rubber footwear. Natural and recycled plastic. Nike
even introduced a product line called "Considered" to encourage designers to
introduce shoes that use less toxic adhesives and recycled materials; meanwhile,
Timberland's leading collection "Earthkeepers" encourages environmentally
friendly production by using tanneries with proper energy, water and waste
management systems. Most brands are developing eco-friendly packaging
solutions through the use of sustainable, eco-friendly and easily biodegradable
materials, such as soya, cork. Recycled, nylon and foam. For example, Puma
replaced the previous shoe box with a simple cardboard box with a special bag
made of non-woven polyester material containing recycled PET.
Besides, with the development of Internet technology, online shopping is
becoming more and more popular. Most well-known brands such as Nike, Crocs
and Adidas have caught up with the trend by building a number of online stores
where customers can choose a variety of rich sandals with sizes, colors, designs
and different prices. Nike and Timberland even allow customers to personalize
and design their own shoe designs. In addition, online clothing and footwear
retailers like Zalora and Shoebuy are currently expanding product designs to
include popular brands. Like clothes and accessories, shoes are one of the most
searched items at online retail sites.
Ethical sourcing is a practice that is becoming increasingly common in many
international footwear companies. In order to meet the social needs for the
protection of human rights in the workplace, many leading companies have
introduced measures to monitor working conditions at not only their factories but
also their headquarters. exported abroad. For example, most companies, but not
all major footwear brands, have established codes of conduct related to working
conditions for outsourced factories. In order to implement these rules, Hong
Kong companies such as Taizin have developed a code of conduct to ensure safe
and healthy working conditions.
Product Trends:
Despite the stable recovery of the economy, buying habits during the recession
still maintained by consumers. Customers continue to look for greater value
when they spend money on products. Mass retailers such as hypermarkets and
supermarkets will continue to be popular shopping addresses for bargain-loving
shoppers; Meanwhile, manufacturers are pursuing strategies to improve the price
ratio of product quality. Therefore, simple, durable and comfortable footwear
products will reach the market more easily than luxury and luxury designs or
brands.
In order to meet the demand for durable, comfortable and comfortable footwear
products, manufacturers are closely associated with material and technology
suppliers to develop their products. Integrated high technology and comfort and
durability. For example, consumers increasingly prefer lightweight footwear and
seasonal footwear uses durable materials and is engineered to resist water and
abrasion in different weather conditions. In addition, individual footwear
products such as mules, sports shoes, jacuzzi shoes, colorful shoes, metallic
sports shoes, rock 'n' roll inspired loafers are increasingly popular. and become
popular.
For the growing children's footwear market, especially in China, major footwear
brands such as Nike and Adidas, and domestic brands such as Li Ning, ANTA
Sports and 361 Degress have begun to penetrate. First steps into this market. In
order to maintain competition and ensure good profits, product quality is
improved and many factors increase the product value such as technology to
improve the balance and operation of users.
With increasing awareness of health, footwear products are healthy and
comfortable for users such as reflexology massage slippers and foot care
products such as pads, stretchers and Toe separators are becoming more and
more popular. For example, the domestic brand Dr. Kong is particularly well
known for its healthy footwear products and has expanded its business to the
Chinese market since 2007. On the other hand, due to the increasingly popular
green consumption standards in the world, The demand for eco-friendly footwear
is on the rise. Footwear made with recycled materials, natural and not made from
materials of animal origin are good examples, while some brands of children's
shoes are promoting the promotion of leather shoes. Does not contain chromium
to minimize the risk of damage to cells.
India
Chairman of the Indian Leather Export Association, Habib Hussain, said that
although consumption in the US and the EU - the main importers of leather
goods in the world - continued to decline, India's leather exports still maintained.
uptrend in fiscal 2009.
The Indian leather and footwear business maintains its growth
Total exports of finished leather and leather products of India from April 2008 to
February 2009 increased by 2.7%, reaching US $ 3.3 billion, compared to US $
3.2 billion in the same period last year.
In terms of rupee, exports in that period increased even more, up 16.2% to reach
151.9 billion rupees.
Footwear exports in the above period reached US $ 1.39 billion, compared with
US $ 1.37 billion in the same period last year.
However, exports of finished leather decreased by 13.8% to US $ 637.5 million,
while horse harness exports decreased by 9.2% to US $ 86 million.
Footwear exports accounted for 42% of India's total leather trade between April
2008 and February 2009. Export of leather goods accounts for 24% of the market
share, while finished leather products account for 19%, leather clothing accounts
for 12% and saddles for horses 3%.
The footwear sector is a very important part of the Indian footwear industry. In
2007-08, the country's footwear exports reached an increase of 19.32%. The
sector's goal was to increase footwear exports to US $ 4.5 billion by 2010-11,
and total exports of leather and footwear products to US $ 6.98 billion at the
time, including footwear alone. accounting for 65% of total Indian leather trade.
The main markets consuming Indian leather products are Germany (14.3%
market share), Italy (13.2%), the UK (11.4%), the US (9.6%), Hong Kong
( 6.2%), France (6.2%), Spain (6%), Netherlands (4.2%), UAE (2.4%), Denmark
(1.7%), Belgium ( 1.5%) and Australia (1.5%).
In the global leather market worth US $ 116 billion, the Indian part accounts for
only a very small part, US $ 3.5 billion. If India tries, in the next 5 years will win
10% of the total world leather market. Mr. Hussain said that to overcome the
current difficulties due to global demand for leather, Indian leather industry must
build good infrastructure, and have long-term plans.
Vietnam and India
India is the second largest consumer and producer of footwear in the world.
Although accounting for 10.2% of world production, its participation in the trade
sector is very limited and only accounts for 1.3% of the total global footwear
exports, as production is directed. to a huge domestic market of 1.3 billion.
Along with that, India also imports nearly 300 million pairs of shoes a year,
mainly from China. Next, the US is the third largest consumer market of
footwear in the world, almost no production but mainly imported.
In this context, Vietnam is second only to China in terms of footwear exports to
the world market with more than 1 billion pairs of shoes each year. Notably, the
average export price of footwear in the world is 9.81 USD / pair, while
Vietnam's price is 15 USD / pair, 1.6 times higher than the world average price.
From 2019, Vietnam's leather and footwear industry is forecasted to be even
more favorable because currently, Vietnam's biggest competitor, China, is
shifting production to high-tech industries. Therefore, orders for shoes and bags
will maintain the trend of moving from China to Vietnam.
The trade war between the United States and China is complicated, which will
greatly affect China's footwear exports and boost the investment of foreign
businesses into Vietnam's footwear industry. In particular, footwear is one of the
industries benefiting greatly from the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP).
Besides the favorable impact of the world market, the internal resources of
Vietnam's footwear industry are also evaluated well. That is, the number of
enterprises operating in the industry is very large (over 3,000 enterprises). The
structure of investment has also changed. If in the past, FDI had accounted for
30%, it is now 40% of the total number of intra-industry enterprises.
Mukhatarul Amin, President of the Indian Leather Export Promotion Association
(CLE), said: “Vietnam's booming footwear industry has created a great demand
for leather, and it has been largely met by the via import. India, a country with
global potential in the field of finished leather, is looking to strengthen its
cooperation with Vietnam for mutual benefits. The possibility of commercial
cooperation between Vietnam and India footwear is really huge. In this context, I
am really happy that the Indian Leather Export Promotion Council joins with 34
companies in the Leather and Footwear Fair in Ho Chi Minh City ”.
The leather industry is one of the spearheads of the "Make in India" campaign.
Mukhatarul Amin added: "Under the Indian Government" Make in India
"program, footwear and leather products are the focused segment. Diversified
footwear and shoe product assemblies are built in many states of India. It is time
for Vietnamese companies to invest in production facilities in India to cater to
India's vast domestic market and for export. ”
 Chairman of Indian Leather Export Promotion Association Mukhatarul Amin
affirmed that the possibility of trade cooperation between Vietnam and India
footwear is really huge.
According to Indian data, the country now has the second largest footwear and
apparel manufacturer in the world, and the fifth largest exporter of leather
products and accessories. Total products reached USD 17.66 billion, of which
exports reached USD 5.66 billion, the domestic market was USD 12 billion and
expected to continue to grow at a steady pace.
India is also an abundant source of raw materials, accounting for 21% of the
world's cattle and buffalo and 11% of goats and sheep. In particular, there is no
import tax on leather and leather imports. In addition, this country has a young
and large population that creates a supply of skilled labor with competitive
salaries. The preferential investment policy of India is quite open when the
whole leather industry is given priority to be licensed, can receive 100% foreign
investment, 100% of profits will be returned to the country and dividends will be
distributed.
Smita Pant, Indian Consul General in Vietnam, said that during Modi's visit to
Vietnam in September 2016, the leather industry was identified as one of the
focus of cooperation between the two countries. The Indian Central Leather
Research Institute (CLRI) and the Vietnam Leather and Footwear Research
Institute (LSRI) have also pledged to work together, signing a Letter of
Aspiration in 2012 to cooperate in technology fields. clean, waste treatment
technology and human resource development.
“The leather industry must play an important role in the context that the two
countries are aiming at a bilateral trade target of US $ 15 billion by 2020. India
has good quality leather at very competitive prices and is a source of leather.
Good quality for Vietnamese companies wishing to diversify their import
markets. Hopefully, the convergence of Indian and Vietnamese companies will
create new directions and combinations for mutual benefit, ”Ms. Smita Pant said.
Indonesia
Outside of Indonesia, China, India, Vietnam and Brazil are major footwear
exporters on a global scale. Although it is in the top 5 of largest exporters, this
does not mean Indonesia controls most of the market. Currently, Indonesia has
only 4.4% market share.
Therefore, it is important for Indonesian footwear manufacturers and traders to
improve the quality, design and brand of their products. In this way, Indonesia
can further develop as a major nation of footwear exports in the coming decades.
Another important issue to enhance Indonesia's footwear export competitiveness
is increasing domestic raw materials (especially leather). However, the quality of
domestically sourced raw materials needs to be of sufficient quality.
Therefore, attracting more investment in the downstream and upstream sectors of
the Indonesian footwear industry is very important. But investments in this
industry are making good progress. It is expected that investment in this industry
will reach IDR 62 trillion (about USD 4.6 billion) by the end of 2017, 4 times
higher than in 2016.
One of the biggest challenges facing Indonesian footwear businesses is that
consumers tend to choose branded products. First, Indonesian footwear
businesses must aim to become the leading brand in Indonesia. After local
brands have become top brands in Indonesia, efforts should be made to raise
brand awareness of Indonesian shoe products abroad.
Based on data from Trade Map, Indonesia's footwear export growth continues to
increase year by year. In 2015, Indonesia's leather and footwear industry reached
a turnover of US $ 4.85 billion. This figure increased to US $ 5.01 billion in
2016, an increase of 3.3% over the same period last year.
Growth is driven by three factors, investment, technology and human resources.
These three elements must complement each other. The Indonesian leather and
footwear industry needs to improve the quality of its products by using natural
ingredients.
Moreover, Indonesia signed CEPA with Australia and the European Free Trade
Association (EFTA). This is likely to expand the export market for the country's
manufactured products. The footwear industry is one of the key manufacturing
industries that can contribute significantly to the national economy. This is
reflected in the growth of the leather industry group, with leather goods and
footwear increasing significantly by 9.42% in 2018, compared to 2.22% in 2017.
Achievements in 2018 exceeded national economic growth by 5.17%. The
country's footwear exports also increased by 4.13%, from US $ 4.91 billion in
2017 to US $ 5.11 billion in 2018.
 The Minister of Industry said that the footwear industry is being prioritized due
to the development as an export-oriented, labor-intensive industry.
 Along with the textile and apparel industry, the footwear industry is also about
to enter the industrial era of 4.0, in order to be able to compete globally and
increase exports. PT KMK is a future model of manufacturing.
2.1.2. Experiences and lessons for Vietnam.

The Vietnam Leather and Footwear Association recently collaborated with the
Vietnam Leather and Footwear Research Institute to develop a development
orientation for the industry in the period 2010-2020, with a vision to 2030. This
is a job. In time for the leather and footwear industry in general, each enterprise
producing footwear and accessories in the country in particular, has the
opportunity to review and recognize the strengths and weaknesses.
Gradually increasing the proportion of domestic raw materials is the first
solution given in the development orientation of the industry. Because, with the
current situation of having to import up to 50% of raw materials for production,
the surplus value that the industry earns is not much compared to the annual
export turnover. To do this, the Vietnam Leather and Footwear Association will
provide support for: administrative procedures, ground contact, calling for help
from the government, calling for capital support from businesses … for
businesses to build and develop tannery technology.
Developing the domestic market is also the best solution for businesses.
When returning to dominate the domestic market, build brands, develop high-
class leather and footwear products … the leather and footwear industry will
gradually reduce the percentage of goods processing, build a brand with the
international market and Exports in higher market segments, with more
economic value.
In addition, market experts in the leather and footwear industry also propose
many solutions to enhance the development such as: Care more about the lives
of workers so that employees are really attached to the profession; keep abreast
of world technology, pay special attention to automation technology in sewing
technology, create form and mound; organize, participate in annual stylist
contests …
The strategic objective of the footwear industry is drafted by 2020 to
achieve export turnover from 13-14 billion USD of footwear products, taking the
initiative to 80% of raw materials, accounting for over 60% of the domestic
market.

CHAPTER 2:
Situation of footwear export market in Vietnam.

2.1. Vietnam’s economy 2015-2019.

 Table 2.1: Some indicators of Vietnam’s economy
2015 2016 2017 2018 2019
Econmic growth (GDP) 193,241b $ 205,276b $ 223,78 b $ 245,214b $ 260,301b $
Foreign investment 22,757 b $ 24,3 b $ 35,88 b $ 35,46 b $ 38,02b $
Inflation(%) 0,63 4,74 3,53 3,54 2,79
Export value 162,11 b $ 176,63 b $ 214 b $ 243,48 b $ 263,43b $
GDP per capita 2.065,17 $ 2.170,65 $ 2.358 $ 2.540 $ 2.725,833$
Unemployment rate(%) 2,31 2,30 2,28 2,19 1,98

Source: worldbbank.org
Customs.gov.vn
Gso.gov.vn

As a result, in terms of GDP growth, although the global economic environment

has become more challenging, Vietnam’s economy has remained strong thanks
to strong domestic demand and export-oriented manufacturing.
The economy not only achieved high growth rates, but the economic structure
continued to shift towards industrialization – modernization. The share of GDP
in the agriculture, forestry and fishery sector decreased from 17% in 2015 to
13.96% in 2019, while the share of the service sector increased from 39.73% of
in 2015 to 41.17% in 2018 and 41.64% in 2019; The proportion of the industry
and construction sector will remain stable at 33-34.5% from 2015 to 2019.
Figure 2.1: Vietnam’s Econmic growth rate 2015-1019
Source: worldbbank.org
Customs.gov.vn
Gso.gov.vn

Investment in the FDI sector has maintained a fairly good growth over the past
time; in 2019, the total FDI reached 38.02 billion USD, up 7.2% over the same
period; maintain a stable proportion of 23.3 – 23.8% in the period 2015 – 2019.

Inflation is controlled by well-performing, synchronous monetary, credit and

fiscal solutions as well as flexible coordination mechanisms between fiscal and
monetary policies. The average CPI decreased from 4.74% in 2016 to 3.54% in
2018; in 2019, decreased to 2.79%.
Interest rates were maintained stably and gradually, in line with the domestic and
foreign economic context.
In the period of 2016-2018, in the context of increasing international interest
rates (the Fed raised interest rates from December 2015 to December 2018, from
nearly 0% to 2.25-2.5%). The State Bank of Vietnam has conducted
comprehensive monetary policy solutions to stabilize interest rates, contribute to
macroeconomic stability and support reasonable growth.
Vietnam’s external economic position was strengthened on the basis of a current
account surplus and strong FDI inflows.
Vietnam’s trade balance of goods reached a record surplus of 9.9 billion USD in
2019, exceeding the nearest peak of 9 billion USD in 2017.
With these impressive figures, it is forecasted that Vietnam’s economy will
continue to achieve a big jump.

2.2. Production status.

2.2.1. Footwear export market in Vietnam 2015-2019.
2.2.1.1. Production structure.
Vietnam’s shoe factories are mainly located in the southern region, which
accounts for nearly 70 per cent of enterprises.
Other regions include the Red River Delta, with about 16 per cent, and the
Mekong Delta with 10 per cent. Vietnam’s leather and footwear industry is
concentrated around Ho Chi Minh City and neighboring provinces. FDI
enterprises ’export turnover and output accounts for up to 80 per cent.

2.2.1.2. Export value.

Vietnam is the third largest country in the world in terms of footwear production
and second in in terms of export turnover.
 Table 2.2: Top 10 Footwear producers ( Quantity) 2017
Country China India Vietnam Indonesia Brazil Bangla Turkey Pakistan Mexico Italia
-desh
Pairs 13523 2409 1100 1083 909 428 400 398 259 191
(Millions)
World 57.5% 10.2% 4.7% 4.6% 3.9% 1.8% 1.7% 1.7% 1.1% 0.8%
share

Source: World footwear yearbook 2017

From the table above we can easily see the average annual footwear production
of some countries as well as their world share in 2017.

Table 2.3: Top 10 Exporters ( Quantity) 2017

Country Pairs (million) World share

China 9687 57.5%
Vietnam 1018 7.1%
 Germany 281 2.0%
Belgium 252 1.8%
Turkey 222 1.5%
Indonesia 217 1.5%
Italia 216 1.5%
United Kingdom 196 1.4%
India 183 1.3%
Netherlands 180 1.3%
Source: World footwear yearbook 2017

In 2015, the industry's turnover reached nearly 15 billion USD, in 2016 also
earned over 16 billion USD; Since 2017, exports of footwear and bags have
started to break through, the industry's turnover this year reached nearly 18
billion USD, and in 2018, maintaining the growth momentum with the total
export turnover of the whole industry reaching 19.63 billion USD, up 9.3% over
the same period in 2017.
Unit: US billion
Figure 2.2: Export of footwear and bags from 2015-2017
Source: World footwear yearbook 2017

Particularly in 2019, our country's footwear export industry has reached the
target of 22 billion USD, up 12.2% compared to 2018. The United States is
Vietnam's largest footwear and bag export market. In the first 11 months of
2019, Vietnam exported US $ 7,410 million to the US, accounting for 36% of
Vietnam's total footwear exports, up 13%. Followed by exports to the EU with
5,418 billion USD, up 7.2%; China reached 1.776 billion USD, up 19.3%; the
Japanese market was 1,252 billion USD, up 13.8%; The Korean market reached
US $ 672 million, an increase of 15.5% compared to 2018. In the first 11 months
of 2019, a total of these 5 markets accounted for 82% of Vietnam's total
footwear export turnover and accounted for 87,4% of Vietnam's total bag
exports. However, the overall picture of the industry has not changed much, as
FDI enterprises are still the main export pillar. In the first 11 months of 2019,
FDI enterprises exported US $ 15.1 billion of footwear and bags, accounting for
75.8%, of which US $ 12.56 billion of footwear and US $ 2.45 billion of
handbags.
Figure 2.3: Export market of the whole industry in 2017
Source: World footwear yearbook 2017

2.2.2. Structure and policy

2.2.2.1. Difficulties of Vietnam’s footwear market.
Generally in the first 6 months of 2019, import turnover of this commodity group
reached more than US $ 2.9 billion, up 3.81% over the same period in 2018.
In June 2019, Vietnam imported this commodity group mainly from China with
US $ 188 million, accounting for 39.7% of the country's total import turnover of
this commodity group. Next is South Korea with over 66 million USD,
accounting for 14% of total turnover
Ranked third is the US market with 43 million USD, accounting for 9.2% of total
turnover. Lastly is Taiwan (China) with more than 30 million USD, accounting
for 6.5% of the total turnover.
Table 2.4: Imported value of raw marerial

Market 6/2019 Compare with 6months in Compare with 6

5/2019(%) 2019 months in
2018(%)
Total 475.490.523 -21,09 2.931.364.007 3,81
Argentina 1.461.650 -56,08 15.664.807 10,23
India 7.478.800 -30,12 51.378.545 -20,32
United 1.559.152 -8,56 10.240.628 30,13
Kingdom
Austria 73.982 -43,21 501.748 -50,85
Poland 638.377 62,70 3.447.073 21,23
Brazil 8.473.787 17,20 45.485.049 -9,65
Canada 5.203.182 10.596,23 8.812.432 -56,56
Taiwan 30.894.826 -30,58 218.248.101 -5,57
Germany 2.315.530 15,55 19.228.533 50,48
Netherlands 439.196 -9,64 2.352.355 10,50
Korea 66.791.338 -17,24 377.546.135 -0,14
USA 43.821.130 0,58 260.571.296 39,78
Hongkong 13.565.325 -40,59 105.602.340 -11,70
Indonesia 3.943.380 -31,03 28.975.565 -1,96
Italia 16.201.364 -39,25 124.941.957 -0,48
Malaysia 991.509 -59,23 11.984.654 -18,93
Newzealand 544.811 63,67 2.237.019 -62,99
Japan 24.857.790 -12,52 138.586.789 1,07
Australia 1.421.908 -10,53 8.118.086 -20,71
Pakistan 2.066.533 -27,33 12.275.861 -6,02
France 457.486 -14,01 2.115.994 0,62
Singapore 131.169 -31,64 739.445 -33,74
Spain 2.134.022 0,54 7.515.172 52,95
Thailand 27.509.800 -13,37 161.595.255 19,12
China 188.617.051 -23,18 1.172.429.816 10,25

Source: Customs.gov.vn
 Gso.gov.vn

Depending on imported raw materials, not only domestic footwear enterprises

are still struggling with processing but also pushing many businesses into
difficulties, due to high production costs, poor product competitiveness ...
These difficulties forces the Vietnamese government to have policies to help
footwear enterprises.

2.2.2.2. Incentive policies of the Vietnamese Government.

In Vietnam, the Prime Minister's Decision No. 12/2011 / QD-TTg dated
February 24, 2011, on policies to develop some supporting industries defines,
“Industry support is industries that produce materials, spare parts, accessories,
semi-finished products to supply to the manufacturing and assembly industry of
finished products being production means or consumer products ". According to
the Government's Decision No. 111/2015 / NDCP dated November 3, 2015 on
Supporting Industry Development, “Supporting industries are industries that
produce raw materials, materials, components and spare parts to provide for
Production of finished products ”.
From the concept of supporting industry, we have the concept of supporting
industry of footwear is the industry specialized in manufacturing supporting
products for the footwear industry. Leather and footwear support industry
includes: machinery and equipment used in the footwear industry and raw
materials, accessories serving the manufacturing process of footwear products.
he policy of supporting industry development in Vietnam has been from 2011
with the introduction of Decision No. 12/2011 / QD-TTg on policies to develop
some supporting industries, Decision 1483 / QD-TTg in 2011 on the list of
products of supporting industry are prioritized for development, but Decree No.
111/2015 / ND-CP on supporting industry development issued on November 3,
2015 shows the Government's determination to develop supporting industry.

The supporting policies for the development of supporting industries are as

follows:
a) Research and development: (i) Funded from the SI Program, supported by
other funds and funding for research, development and training; (ii) Be
considered to support a part of research and development funding from the SI
development program in case of self-investment in research and technology
development with high efficiency; (iii) Receive up to 50% of funding for the
project of pilot production of supporting products.
b) Application and technology transfer: (i) Projects and projects of cooperation
between manufacturing enterprises and units with applied technologies in
technology transfer are supported partial funding; (ii) Expenses for
manufacturing and testing of supporting products on the List of supported
supporting industrial products are supported up to 50%.
c) Development of human resources: (i) The project of production of supporting
products on the List of supporting industrial products prioritized for development
is supported with funding from the Supporting industry development program
for training human resources; (ii) Individuals who directly perform the tasks of
the Supporting Industrial Development Program are given priority in training to
improve their skills at home and abroad according to the state's training
programs.
d) International cooperation on supporting industry: (i) Expanding international
cooperation in supporting industry activities; (ii) Promote search and advanced
technology transfer to Vietnam to enhance the capacity of domestic supporting
industry enterprises; (iii) Promote international cooperation in the field
developing human resources for supporting industry, giving priority to
cooperating in training students of supporting industries in universities, colleges
and advanced vocational schools in the region and around the world; attract and
use effectively highly qualified people and talented young people to cooperate in
research and teaching SI in Vietnam.
d) Support for market development: (i) Prioritize participation in National Trade
*Promotion Program; (ii) Partially support the cost of trademark registration,
funding for exhibitions at home and abroad, and market access and service fees
from SI development program. Measures to support the development of
supporting industries in the decree include:
*Building a system of supporting industry development to support businesses, in
which the main task is to support technology and corporate governance. This
center includes technology transfer and reception, sample design center, quality
control center, and floor trading materials, components details ....
*Supporting industry development program to support domestic enterprises in
technology, human resource training, production management, market
creation ..., connecting with multinational corporations and enterprise suppliers.
FDI aims to find output for products, gradually joining the chain supply of FDI
enterprises to produce products with requirements from low level to high level,
from there, it can proceed to export to regional and world markets ...
***Preferential policies for the development of supporting industry.
General incentives:
- Corporate income tax: Tax incentives are applied in accordance with the Law
No. 71/2014 / QH13 dated November 26, 2014 amending and supplementing a
number of articles of the Tax Laws. Accordingly, the tax rate of 10% for 15
years is applied to the income of enterprises from the execution of new
investment projects to manufacture products on the List of products of
prioritized development of supporting industries that meet one of the following
criteria:
+ Supporting products for high technology in accordance with the Law on High
Technology;
+ SI products for manufacturing products: textile - garment; leather - shoes;
electronics and information technology; production and assembly of
automobiles; mechanical engineering products that, as of January 1, 2015,
cannot be manufactured domestically or can be produced, but must meet the
European Union (EU) technical specifications or equivalent.
- Import tax: Exempted from import tax on imported goods to create fixed assets
according to the provisions of the Law on Export Tax, Import Tax and guiding
documents.
- Credit: (i) Supporting projects on production of supporting products on the List
of development priorities can be borrowed with investment credit interest rates
from the State's investment credit sources; (ii) Receive short-term loans in
Vietnam Dong at credit institutions and foreign bank branches with loan interest
rates based on the lending interest rate ceiling in accordance with the regulations
of the State Bank in each period.
- Value-added tax: The turnover of supporting products on the List of supported
supporting industrial products is allowed to declare value-added tax on a
monthly basis, yearly basis, temporarily calculated quarterly.
- Environmental protection: The project of producing supporting products on the
List of supporting industrial products prioritized for development is borrowed at
a preferential interest rate from the Vietnam Environment Protection Fund for
pollution treatment and environmental protection of project.
*** Incentives for SMEs:
- Investment credit: To borrow up to 70% of the investment capital at credit
institutions on the basis of the guarantee provided by credit guarantee
organizations to small and medium-sized enterprises under regulations.
- Land and water surface rent: Exempted or reduced the land and water surface
rent in accordance with the land law.
Investment projects on production of supporting industry products on the list of
prioritized supporting industry products in geographical areas with difficult
socio-economic conditions and areas with exceptionally difficult socio-economic
conditions are entitled to Investment incentives by location.

The Decree helps enterprises producing supporting products easily access to

preferential policies of the State, thereby gradually improving the capacity of
enterprises and being supported by the State to participate in the production of
spare parts and components of Multinational corporations produce production
finished products. The development enterprises are oriented through the List of
supporting industry products prioritized for development.

2.3. Effect of the policy.

Vietnam's leather and footwear export industry has recorded remarkable
achievements. By the end of 2017, Vietnam is the fourth largest footwear
producer in the world in volume (after China, India and Brazil), and the third
largest export in the world in terms of value (after China and Italy). Vietnam's
footwear products have been exported to over 100 countries. Up to now, the
leather and footwear industry still maintains its position as a key and important
export industry, contributing to creating more jobs and increasing income for the
society. However, the leather and footwear industry still depends heavily on
imported raw materials. In the context of integration, leather and footwear
products face increasing competition, more and more barriers, and higher
requirements for products. In order to develop the footwear industry into a sector
with high production value and high competitiveness in the context of economic
integration, Vietnam needs to strongly develop the supporting industry to
produce raw materials for the textile and footwear industry.

Figure 2.4: Development trend of the supporting industry

Source: World footwear yearbook 2017
Gso.gov.vn

The growth of support sector is faster than manufacturing sectors.

Vietnam can provide average 50% of materials for footwear industry.

The development of supporting industry for footwear industry has the meaning:
- Firstly, contributing to the exploitation of domestic resources, creating jobs for
a large number of unskilled labor.
- Second, supply of raw materials; promote technology transfer, apply advanced
techniques to footwear production; reduce the export of raw products and import
of raw materials, enhance the competitiveness of domestic products and
accelerate the industrialization process in the direction of both expanding and
intensive, avoiding dependence.
of outsourcing companies.
- Thirdly, the development of leather and footwear supporting industry has a
strong impact on other industries, stimulating industries to develop in the
direction of meeting the requirements of the new period.
- Fourth, expand the ability to attract FDI into the development of the footwear
industry.
 CHAPTER 3:
Orientation and Solutions for the future

3.1. Opportunities and challenges.

3.1.1 Opportunites.
Geat opportunities from trade agreements such as the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam
Free Trade Agreement (EVFTA) ... However, it is possible to take advantage of
otherwise, the 7th Term Executive Committee should address the bottlenecks
that the industry is currently facing and the main issue is the branding issue.
Because at present, Vietnamese leather and footwear industry is still in the
processing chain, enterprises have not yet exported their branded products, so it
is necessary to have solutions to improve the value chain for the industry in the
near future.
The signing of EVFTA is very good news for Vietnam’s footwear industry.
Among other trade facilitations, the 65% of import duty lines for Vietnamese
footwear imported to EU will be zero % immediately from effectiveness, and
100% of import duties for footwear will be eliminated after 7 years from the
effectiveness. This will create favorable conditions for Vietnam’s export of
footwear to EU, in comparison with other exporter countries, especially China.
That creates expectations for the future. What about the recent years? When we
look at the numbers, there isn't room for much doubt: Vietnamese footwear
exports more than doubled in the last 10 years. The local industry is benefiting
from various FTAs and with the low increase of China’s footwear export in
recent years, Lefaso anticipates Vietnam’s footwear export could increase by 8–
10% a year up to 2030.
Recent developments of the US–China Trade war already have some positive
impacts to Vietnam’s footwear export in some aspects, such as: moving new
orders from China to Vietnam and attracting more foreign investment to
Vietnam for footwear production. In case Chinese footwear imported to the US
is charged with addittional import duties by the US Government, there will be
more advantages for Vietnam’s exports. But one must not forget that Vietnam
has to import up to 60% of materials for footwear production, mainly from
China, so footwear imported to the US from Vietnam will have to conform to
some new regulations on Rule of Origin set by US Government, including the
Made-in-Vietnam definition.
3.1.2. Chanllenges.
When participating in any FTA or market in the international arena, the first
barrier we often encounter is the capacity of Vietnamese enterprises. Currently,
the EU accounts for about 30% of the export market from Vietnam, leather and
footwear products are granted EU preferential tariff (GSP) with the tax rate
fluctuating below 8%, but as soon as EVFTA is signed and In effect, GSP will
be removed immediately. Only exporters that meet the EVFTA requirements can
enjoy low tax rates and vice versa, will be subject to high taxes. For large
enterprises with good preparation, there are no problems, however, for
businesses that rely too much on imported raw materials, if the business does not
improve its size and capacity. Intrinsic production, which does not meet the
conditions, will not take advantage of this opportunity.
One of the other challenges for Vietnamese businesses is proving the origin of
input materials. Despite being a key export industry, the added value of the
leather and footwear industry is not high due to heavy reliance on imported raw
materials. While most new generation FTAs have rules of origin with a value of
55% of domestic raw materials and accessories, the Vietnamese leather and
footwear industry is only able to control about 50% of raw materials, therefore,
The localization rate of products produced by Vietnamese enterprises must be
raised to the required level of FTAs to meet the rules of origin in FTAs to which
Vietnam participates. logistics costs and improve the initiative of Vietnamese
businesses. At the same time, Vietnamese leather and footwear enterprises may
be at risk from the fact that the US will trace back to the origin of raw materials
and impose additional taxes if such products are sourced from China, but China
is currently is one of the largest material suppliers in Vietnam with a value of
over 100 million USD. Therefore, in order to retain this big customer, before
self-control of raw materials, the leather and footwear industry needs to expand
the market of imported raw materials and accessories, especially with third
countries that share FTA commitments. countries importing products to take
advantage of preferential origin.
Another problem is that Vietnamese leather and footwear enterprises leave the
domestic market unattended and have not taken advantage of the Asian market
with a large consumption of footwear products worldwide. Under the
commitments, when the FTA is implemented, the import tax on products of
partner countries to Vietnam is also sharply reduced and eliminated 100%,
Vietnam will also become a potential consumer market of Foreign footwear
business. Statistics show that, as of January 1, 2017, the number of shoes and
leather consumed in the domestic market was 793 million pairs out of 10,042
million pairs, accounting for 7.9% of total products. Leather and footwear is
processed in Vietnam. A number that is too small indicates a waste of the
domestic market while the quality of Vietnamese products has been recognized
by the world, and poses a great challenge of trade protection for domestic
businesses.
Lefaso underlined that the rising of labour costs will continue. This combined
with the need to apply the 4.0 technologies will be the challenges of the footwear
industry in Vietnam.
3.2.Orientation and Solutions for the future.
3.2.1. Targets to 2030.
It is forecasted that Vietnam's footwear export turnover will reach 27.7 billion
USD by 2025, equivalent to 1,899 million pairs, up 48.2% in revenue and 45%
in volume compared to 2020.

Table 3.1: Plan of the footwear industry to 2030

INDEX UNIT 2015 2020 2030

All kinds of Mil pairs 1,172 2,272 3,250
footwear
Leather Mil sqf 300 650 1,600

Labor 1,000 per 1000 1500 2,400

Total export Bil USD 12.07 24.30 54.20
Rate of local % 45-65 55-60 60-65
materials

Source: Vietnam Leather, Footwear and Handbag Association

From these positive signals, Lefaso forecasts that demand for footwear products
in key export markets of Vietnam will increase in 2020. Because according to
international experts, from 2020 the risk of confrontation with US-China trade;
between the US and other trading partners in Europe, India ... will decrease and
the global economy will gradually recover. Footwear and bag processing orders
continue the trend of moving from China to Vietnam to take advantage of
preferential tariffs from FTA agreements, replacing the declining export of
China. Besides, FDI enterprises continue to invest in new and expand
production, which will help the footwear industry maintain export growth.
Accordingly, Lefaso forecasts that by 2020, the industry's average industrial
production index will increase by 11%, the localization rate of products will be
60%, export turnover will reach US $ 24 billion, and maintain the growth rate of
10 % compared to 2019.
Along with that, Vietnam's footwear market will prepare a series of long-term
plans until 2030 before the unpredictable developments of the world economy in
the coming years.
Vietnam can keep competitiveness in footwear industry at least 20 years more.
3.2.2. Development orientation.
About production method:
Continue to develop footwear production for export to exploit the potential of
Vietnam.
To gradually shift from the main export processing to building a manufacturing
industry for export and domestic consumption.
About production facilities:
Increasing in-depth investment, renovating equipment and reorganizing
workshops to suit technological requirements.
Strengthening the construction of new investment projects in areas with
favorable conditions for production.
Invest in production facilities of all kinds of materials and accessories.
About the market:
Enter markets carefully, like a test so that mistakes can be corrected without
much damage. At the same time, keep a close watch on customer attitude
towards products. Continuing to develop and expand exports to the US and EU,
as well as expand markets to other countries.
About solutions to attract into the footwear industry:
In addition to the forms of FDI as prescribed by the current Investment Law, in
order to increase the attractiveness of FDI, we can apply the following forms:
- Foreign-invested joint-stock companies. This type of company is popular in the
world and is applied in many Southeast Asian countries. Compared to a limited
liability company, this type has many advantages in raising capital and reducing
risks. Therefore, the State needs to have a system of legal documents regulating
this type of FDI attraction.
- Equitizing foreign-invested enterprises. According to investors, the investment
law stipulates that joint ventures are not allowed to raise capital by issuing stocks
and securities that are too rigid and disadvantageous for Vietnam. Therefore, the
State should have specific regulations on this type in order to create conditions
for Vietnamese enterprises to buy shares and pay the Vietnamese capital
contribution.
- Investors are free to choose the investment form that suits their requirements.
Improving investment regulations in industrial zones and export processing
zones is essential to attract more FDI projects into industrial parks and export
processing zones.
Specifically:
- Reducing land rents in industrial parks and export processing zones to ensure
investors' profit, motivating them to invest in industrial parks and export
processing zones.
- The State must invest synchronously to build infrastructure outside the fences
of industrial parks and export processing zones in order to create the most
favorable conditions for investment and business production activities of FDI
projects.
- Need to specify the number of fees and charges that the investor must be
responsible to pay, as well as the level of each type of fee. Avoid excessive,
overlapping, excessive collection of fee collection agencies.
- Planning industrial parks and export processing zones must ensure the long-
term development of enterprises. Therefore, the area of land used for each
project must be suitable in the short term, as well as the long-term development
of the project.
- Investors are free to choose the location and location of the project inside or
outside the industrial park.
 CONCLUSION

The footwear industry is one of the industries with potential for development and
bringing high added value to manufacturers and exporters.
Chapter 1 provides an overview of the internship, including the position,
functions, roles and duties of the Import and Export Department. Experiences on
expanding export markets of some countries such as China and the whole world,
thereby drawing lessons for Vietnam.
Chapter 2 analyzes Vietnam's economic development and Vietnam's current
export status of footwear in the period of 2015-2019, the results show that
footwear is one of the products with a large growth in turnover. most over the
years and bring high added value to the importers. The chapter also analyzes the
existing difficulties of footwear enterprises and provides policies to help the
Vietnamese government.
Chapter 3 presents the opportunities and challenges of exporting footwear to
other countries of Vietnam in a new age and sets out a number of long-term
development goals and orientations for Vietnam's footwear production and
export.
For effective expansion of export markets, it is necessary to have close
coordination between relevant ministries, branches, export enterprises, and
professional associations at home and abroad. The Government should have
incentive policies for domestic fruit and vegetable production and export
enterprises, and at the same time increase the attraction of foreign direct
investment in vegetable production and export activities. Enterprises should
proactively seek and exploit opportunities to expand export markets. Before
expanding market share to new markets, businesses need to survey the market,
analyze and evaluate market supply and demand movements, improve their
products to meet the standards of importing countries. Password. Industry
associations need to support businesses in branding, promoting the image of
Vietnamese footwear on European markets. At the same time, providing
necessary information about the market and consulting businesses to expand
export markets and stabilize traditional markets. Information is a very important
factor, influencing enterprises' decisions and the success or failure of their export
market expansion strategy, therefore it is necessary to build a sufficient source of
information. and coordination between competent State agencies, industry
associations and between enterprises.
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hng-n-ngnh-dt-may
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Indonesia-Investments

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