FOOTWEAR EXPORTS SEEN REACHING US$27 BILLION THIS YEAR

Vietnam’s leather and footwear export revenue is expected to reach around US$26-27 billion this year, up from US$24 billion last year, according to the Vietnam Leather, Footwear and Handbag Association (Lefaso).

This optimistic forecast reflects the industry’s efforts to expand and diversify its markets. Lefaso indicated that Vietnam’s footwear sector will concentrate on traditional markets like the U.S. and the European Union, alongside markets with free trade agreements to maximize opportunities.

Companies are rehiring workers to ramp up production following recent cutbacks, said Phan Thi Thanh Xuan, vice chairwoman and secretary general of Lefaso.

The industry is shifting away from low-value products due to their low profit margins. Instead, it will focus on mid-to-high value segments to boost profitability.

Vietnam’s footwear exports surpassed US$6.5 billion in the first half of this year, a 5.7% increase over the same period in 2023. Xuan noted that the main export markets were the U.S. (35%), the EU (26%), Japan, South Korea, and China.

China is emerging as a significant market, buying 9% of Vietnam’s footwear exports. Experts highlight Vietnam’s competitive edge due to its numerous free trade agreements.

Vietnam has over 1,000 footwear factories employing around 1.5 million workers, contributing about 8% to the nation’s GDP. The southwestern and central regions offer ample labor, low costs, and large areas of vacant land, presenting significant growth opportunities.

Domestic firms are urged to leverage FTAs, especially with the EU, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to drive export growth.

Vietnam’s industrial strategy, outlined in Decision No. 879/QD-TTG on June 9, 2014, prioritizes textiles and footwear as key industries through 2025, with a vision toward 2035. This strategy underscores the importance of the footwear sector in the country’s economic development plans.

Source: VNS