Domestic footwear makers face bumpy ride ahead
Domestic footwear producers must brace themselves for a bumpy ride ahead in the face of stiffer competition as they lag behind their regional rivals in terms of technology.
Footwear exports rose sharply from US$8.5 billion in 2013 to US$12.07 billion last year, but this does not necessarily indicate a bright future for the country’s footwear firms.
According to chairman of the Thai Binh Shoes Group Nguyen Duc Thuan, local footwear manufacturers are under great pressure to replace their outdated methods with more advanced technology if they want to survive fierce competition.Businesses need to innovate and adopt new manufacturing technologies alongside a long-term strategic vision for at least the next 10 years to ease competitive pressure, he stressed.
Another problem comes from local productivity which is still far below those of regional rivals. Low productivity did not only affect the industry’s competitive position but also led to low incomes.
If productivity does not improve, local producers will end up losing orders to competitors from overseas and at home, Thuan added.
Statistics from the Ministry of Industry and Trade showed that Vietnam produced approximately 1.1 billion pairs of shoes in 2015, 72.2% of which were made by foreign direct investment (FDI) firms.
FDI firms also accounted for 79% of footwear exports last year, making the disparity between FDI and domestic makers even wider.