The leather and footwear industry is now taking the lead in Vietnam’s export earnings from major markets such as Europe, the US, Japan and the Republic of Korea (RoK). 2010 was the most successful year so far for Vietnam’s leather and footwear industry with export turnover reaching more than US$5.2 billion. It is also one of the top five sectors that posted the highest export turnover in the country. With such momentum toward development, the sector has set its export target at US$5.4 billion this year.

The EU removing anti-dumping duties on Vietnam’s leather-capped shoes as of April 1 is also a good sign. This means that trade barriers imposed by the EU for Vietnamese footwear products have been fully abolished. This will offer a huge opportunity for Vietnamese footwear businesses to expand their markets to European countries.

Many Vietnamese footwear businesses have been urgently seeking new outlets and devised development strategies to promote exports to the European market, secure a firm foothold in the domestic market, renovate methods of production, and improve product design.

Phuong Thua Vu, deputy general director of the Import-Export Leather and Footwear Joint Stock Investment Company said that the removal of anti-dumping duties has created new opportunities for Vietnamese businesses to increase their orders and output, promote exports and reduce import surplus. Mr Vu added that businesses should come up with good strategies to manage production well, increase output, and reduce product prices.

However, Nguyen Thi Tong, Vice President, and General Secretary of the Vietnam Leather and Footwear Association, said that the leather and footwear industry is facing some challenges arising from a lack of materials, and workers and tough competition among leather and footwear exporters.  Therefore, Vietnam’s leather and footwear industry development strategy should attach great importance to consolidating the domestic market.

Recently, the Vietnam Leather and Footwear Association co-ordinated with the Vietnam Leather and Footwear Research Institute to put forth development orientations for the 2010-2020 period with a vision for 2025. The development of the domestic market is one of the sector’s leading strategies.

Tong emphasised that in the development plan until 2020, the sector will pay attention to developing the local market of 87 million people. When this had been achieved, businesses would continue to develop their brand to secure a firm foothold in the market and promote their own industry.

Currently, developing the local market is one of the best solutions for Vietnamese leather and footwear businesses. Conquering the local market and developing high quality leather footwear products will promote the sector’s trademark in the international market as well as export products to high-end markets to ensure sustainable development. The sector’s market experts should also devise solutions for improving workers’ living standards, offer incentives for workers to improve their skills and create diversified designs to meet strict requirements in both domestic and international markets.

The strategic goal of the leather and footwear industry is to reach an export turnover of US$13-14 billion by 2020, and provide up to 80 percent of material inputs and conquer over 60 percent of the local market. With the EU removal of trade barriers, Vietnam’s leather and footwear industry hopes to actively contribute to the country’s socio-economic development.