Footwear giants shift outsourcing from China to Vietnam
A shoe of the Adidas sports line is reflected in a mirror. Photo by Reuters
Sneaker giant Adidas last year had 44% of its footwear produced in Vietnam, more than double the 19% made by suppliers in China. This figure also marked a 31% increase from 2012 for Vietnam and a 30% plus decrease for China.
A similar move can also be seen at Adidas’ rival Nike, which had 46% of its footwear made in Vietnam last year, against just 27% in China.
While China remains the top supplier in the fashion industry, Vietnam is now seen by major brands as a solid and critically important supplier in second place, according to survey results released by the United States Fashion Industry Association.
“We are reporting a change in the sourcing trend, from ‘China Plus Many’ to ‘China Plus Vietnam Plus Many,’” the association said.
The typical sourcing portfolio today is 30%-50% from China, 11%‑30% from Vietnam, and the rest from other countries, it added.
According to experts in the industry, China manufacturing has become more focused on high value, and with workers’ wages rising, low-cost manufacturing is no longer its priority, according to The Diplomat magazine.
This explains why Vietnam, Indonesia and Bangladesh are producing more shoes and apparel for export.
However, while this trend can yield short-term benefits to Vietnam, long-term consequences will be severe, Professor Nguyen Van Nam, former director of the Institute of Trade Research under the Ministry of Industry and Trade, told the DatViet (Vietnam’s Land) newspaper.
Since advanced technology is not widely applied in Vietnam, the manufacturing sector exploits labor and pollutes the environment, he said.
“Vietnam needs to push for the newest technologies in manufacturing, otherwise we will be a ‘landfill’ of other countries,” he added.
Nguyen Duc Thuan, president of the Vietnam Leather Footwear and Handbag Association (LEFASO), highlighted another challenging aspect of the shift at a conference earlier this year.
As workers in other countries are assisted by machines in the production process, each of them can make 1.2 pair of shoes in an hour, while their Vietnam peers can only manage 0.7, he said.
“Labor productivity obviously increases when technology and high management skills are used, and this is a challenge that Vietnam needs to meet,” Thuan said.
Vietnam’s footwear export value has been growing in recent years, from US$8.4 billion in 2014 to US$14.65 billion in 2017, a 42% increase.
The country contributed a billion pairs of shoes to the 27 billion pairs produced globally last year.
Related News
Opportunity for exporting to Thailand market
14:48 | 27/04/2024 Import-Export
Notice for businesses exporting watermelons to China
09:40 | 25/04/2024 Customs
Vietnam's exports to Canada lead among CPTPP countries
09:41 | 25/04/2024 Headlines
Latest News
Export turnover reaches over US$200 billion in the first half of April
15:04 | 28/04/2024 Import-Export
Experts call for efforts in protecting IP rights
15:02 | 28/04/2024 Import-Export
Policies needed to encourage e-commerce to embrace circular economy
15:00 | 28/04/2024 Import-Export
To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits
06:15 | 28/04/2024 Import-Export
More News
Efforts to supply US $ one billion of raw materials and cosmetics to replace imported goods
06:14 | 28/04/2024 Import-Export
Ample room for Quang Ninh to attract FDI
19:47 | 27/04/2024 Import-Export
Vietnam’s rice exports may exceed 2024 target
19:46 | 27/04/2024 Import-Export
Enterprises want clearer regulations on seafood production
14:05 | 26/04/2024 Import-Export
Vietnam ranks fifth among aquatic product suppliers for Singapore
13:53 | 26/04/2024 Import-Export
Forum seeks to increase PPP investment effectiveness
13:48 | 25/04/2024 Import-Export
Linking businesses with cooperatives to increase the value chain
09:42 | 25/04/2024 Import-Export
Vietnam has a trade deficit of over US$17 billion with China
15:34 | 24/04/2024 Import-Export
Tra fish export to UAE jumps 67% in Q1
13:46 | 24/04/2024 Import-Export
Your care
Export turnover reaches over US$200 billion in the first half of April
15:04 | 28/04/2024 Import-Export
Experts call for efforts in protecting IP rights
15:02 | 28/04/2024 Import-Export
Policies needed to encourage e-commerce to embrace circular economy
15:00 | 28/04/2024 Import-Export
To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits
06:15 | 28/04/2024 Import-Export
Efforts to supply US $ one billion of raw materials and cosmetics to replace imported goods
06:14 | 28/04/2024 Import-Export