Vietnam footwear market to boom by 2031, value to rise double to US$38.7 bln
VOV.VN - The Vietnamese footwear market is anticipated to hit US$38.7 billion in value by 2031, doubling this year’s estimated figure of US$19.1 billion, according to market research firms.
Vietnam currently ranks second in the world in terms of footwear exports, behind only China. About one billion pairs of footwear are shipped overseas each year, with last year alone seeing footwear manufacturers rake in roughly US$20.78 billion from exports.
The country is home to roughly 2,200 footwear manufacturing enterprises, mostly located in Ho Chi Minh City.
It’s noteworthy that several major international brands such as Nike and Adidas have decided to base their main production facilities in Vietnam thanks the country’s political stability, attractive investment climate, and young and cheap labour.
At present, Nike boasts over 100 suppliers in the country, with 96 factories in the southern region, while Adidas has also chosen Vietnam its main production area.
In addition, manufacturers have taken advantage of tariff incentives from major free trade agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to ramp up exports to markets globally, including Canada and Mexico.
Despite the optimistic outlook, industry insiders note that the sector is still in the process of recovering as by the end of 2021 only 80% of workers returned to their jobs following the COVID-19 pandemic, a factor which has hindered production activities.
Therefore, local businesses are anticipated to face fierce competition from other developing ASEAN countries, including Indonesia and Malaysia, both of which have a young and low-paid workforce.
Data compiled by the Observatory of Economic Complexity (OEC) indicates that footwear was the country’s third largest export item in 2020, while its main footwear export markets were the United States (US$6.43 billion), China (US$2.24 billion), Germany (US$1.03 billion), Japan (US$953 million), and the Republic of Korea (US$730 million).
The OEC noted that during the 2019 to 2020 period the fastest growing Vietnamese footwear export markets were China with turnover reaching US$272 million, Poland with US$25.6 million, and Taiwan (China) with US$22.6 million.
