The Challenge of Lack of Market Information for Vietnamese Leather and Footwear Companies
While the import of high-value raw materials is necessary for Vietnamese manufacturers, the domestic leather and footwear industry has not benefited from the import of new and durable technologies, equipment and materials from countries with which Vietnam has signed trade agreements.
LEFASO Vice President and General Secretary Phan Thi Thanh Xuan offered Vietnam’s overseas trade offices to provide market information to domestic enterprises and help them find partners supplying raw materials and accessories in the European Union (EU). This will help companies take advantage of the tax incentives of the EU-Vietnam Free Trade Agreement (EVFTA).
The Vietnam Leather, Footwear and Handbags Association said the country’s leather and footwear companies may face several challenges, including lack of market information, in the remaining months of this year. The business and brand order situation will slow through the first quarter of 2023 as the existing stock of fashion items is large.
Germany’s supply chain law, which will come into effect on Jan. 1, 2023, will strongly affect Vietnam’s production chain of leather and footwear industry when exporting to the EU market, said she pointed out.
Domestic leather and shoe companies have yet to receive information regarding specific law enforcement timelines and procedural requirements, she said, as quoted by Vietnamese media.
Vietnam’s footwear exports in July this year amounted to $2.27 billion, bringing the total turnover for the first seven months of this year to $16.08 billion, according to the General Department of Customs. . The value of exports in the first seven months increased by 33%.
The growth rate of domestic leather and footwear production in July reached 3.2% for the month and 25.5% for the year. In the first seven months of the year, the industry’s output growth amounted to 15.1 percent, LEFASO said.
The value of footwear exports in the first half of the year rose 13.3 percent to $11.79 billion, the association added.
Among the export markets for Vietnamese leather and footwear products, North America has always recorded the highest growth with 24.5%, followed by Europe with 15.7% and South America with 10.8%.
The value of exports fell by 6% in Asia and by 1.9% in Oceania.
The United States was still Vietnam’s largest shoe export market, reaching $6 billion, followed by Belgium with $866.6 million and China with $863.2 million.
Fibre2Fashion (DS) News Desk