Vietnamese footwear struggles to export into American, Chinese, Japanese markets

	Import turnover of raw material textiles, garments and footwear reaches US$12 billion, China accounts for 49%
	Footwear businesses adapt to COVID-19 pandemic
	Footwear exports in seven months fails to break US$10 billion mark

From now to the end of the year, it is forecast that the output of the footwear industry will continue to struggle. Photo: Nguyen Hue.

According to the Ministry of Industry and Trade, the leather and related products industry in August increased 2.9% over the previous month, but fell 3.6% compared to the same period in 2019. In the first eight months of 2020, the rate of decrease is 4.3% over the same period in 2019.

Similar to textiles, the footwear manufacturing and exporting industries have been negatively affected by the Covid-19 pandemic. Footwear export turnover in the first eight months of 2020 was estimated at 10.9 billion USD, down 8.6% over the same period in 2019.

In terms of market, for the first seven months of the year, the US was the leader in footwear consumption with a turnover of 3.43 billion USD, accounting for more than36% of Vietnam's total export turnover of this commodity group and decreased 9% over the same period in 2019.

China was second with 12%, reaching 1.14 billion USD, down more than 19% over the same period last year. Following markets include Belgium, Japan, and Germany export turnover also decreased by 17%, 2% and some 10% over the same period last year.

"Most footwear exports to foreign markets have declined. Denmark is the strongest drop market with nearly 64%, reaching 6.2 million USD, "a representative of the Ministry of Industry and Trade said.

From now to the end of the year, it is forecast that the output of the leather and footwear industry will continue to face difficulties, because it depends on the ability to control the pandemic in the US and Europe. The biggest motivation for the industry's growth is the EU-Vietnam Free Trade Agreement (EVFTA), which took effect on August 1.

The number Certificate of Origin (C / O) in EUR.1 form has issued since the EVFTA came into effect showing the interest of enterprises as well as the importance of EU market with Vietnam’s exports and imports.

Specifically, within amonth from August 1 to the end of August, authorised organizations issued more than7,200 sets of C/O samples EUR.1 with a turnover of 277 million USD to 28 EU countries. The items granted EUR.1 C/O form are mainly footwear, seafood, plastic and plastic products, coffee, textiles, bags, suitcases, vegetables, rattan products and bamboo.

The Ministry of Industry and Trade saidto take advantage of the EVFTA for increasingexports, many enterprises in the leather and footwear industry have made plans like restructuring the apparatus, the availability of factory and raw materials to meet the commitments of the agreement, and increase investment in machinery to improve product quality at the same time.

Phan Thi Thanh Xuan, General Secretary of the Vietnam Leather, Footwear and Handbag Association, said the EU is a traditional market of Vietnam's leather and footwear industry, accounting for nearly 30% of export turnover, about 6 billion USD each year.

"We expect that the EVFTA will promote more footwear exports to this market, helping to offset the loss of exports in the first months of the year," Xuan said.

However, Xuan also expressed her anxiety when the EU is known as a highly demanding market with hard conditions intechnical requirements and high quality goods as well as requirements to ensure labour and environment.

These are factors that enterprises, especially small and medium enterprises, have to improve a lot to enter this market.

In the leather and footwear field, business information about EVFTA is very limited. The reason is the model of manufacturing, processing and exporting. Vietnam depends on international customers. Markets are mostly controlled by customers, and businesses only produce and do business.

In addition, enterprises aren’t dynamic in accessing the market. Besides, human resources, infrastructure systems and businesses have not met demand due to small and fragmented development.

Footwear exports to the US set for tough year Footwear exports to the US have been forecast to struggle in the remaining months of this year ...

"We really want businesses to have a positive change to reach the ‘game’. Along with that, institutions and policies also need to be improved. This requires synchronisation from enterprises to the State to execute and take advantage of market opportunities in the coming time,, said Xuan.