Data from General Statistics Office shows that in January 2024, footwear exports reached 1.85 billion USD, up 35% over the same period last year.
In 2023, although growth rate decreased by about 10% compared to 2022, Vietnam's footwear export output is second only to China, estimated to account for 10% of the world's market share and be present in 150 markets.
According to Ms. Phan Thi Thanh Xuan - Vice President and General Secretary of Vietnam Leather, Footwear and Handbag Association, for export markets, leather and footwear industry still focused on 5 main markets: America accounts for the largest proportion of about 35%, followed by EU 26%, Japan and Korea. China alone currently accounts for 9% of proportion and the turnover is increasing. This is also the market that helps the leather and footwear industry have room for export growth in 2024.
In 2024, according to analysis of many experts, major economies are also potential export markets for Vietnam's leather and footwear industry to prosper. Besides, Vietnam has a number of significant competitive advantages compared to other countries that produce and export footwear and handbags.
Specifically, 15 free trade agreements (FTAs) have been signed with short tax reduction roadmaps to continue to support domestic footwear businesses to develop their markets; Good quality labor force with more than 30 years of footwear manufacturing skills and reputation of Made in Vietnam footwear brand has been affirmed.
The above factors help Vietnam's leather and footwear industry has a basis to improve turnover and regain export growth momentum. Accordingly, in 2024, besides markets with FTAs, Vietnam's leather and footwear industry will continue to expand and diversify markets, focusing on maintaining traditional markets such as the US and EU because of purchasing power and capacity of big market.
Regarding product segment, Vietnam is assessed to be able to produce footwear products of average quality or higher and products of high difficulty. In coming time, the industry will not aim to produce low-value products due to low profits and waste of resources but will continue to focus on mid- and high-end product segments.
With a number of green and sustainable development standards such as ecological product policies, extended responsibility with manufacturers, supply chain traceability...it can be accepted by Vietnam's major footwear import markets. If Vietnam applies it in 2024 and in the next few years, it will affect the industry's exports. Ms. Xuan said that compliance is mandatory. When complying with these regulations, businesses must carry out many activities to upgrade internal capacity. Upgrading must come from technology and management. At the same time, input costs are increasing while output costs are increasing very little, which is extremely great pressure on businesses.
"However, in a world of equal competition, if we want to successfully participate in the supply chain, compliance is required", the leader of the Vietnam Leather, Footwear and Handbag Association emphasized.
Particularly with Carbon Pricing Mechanism (CBAM) that is causing concern today, Ms. Xuan explained that footwear is an industry that is considered to cause large emissions during the production process, so it is also among the subjects affected CBAM. EU is currently Vietnam's major export market with about 6 billion euros per year, so preparing to change and respond to this regulation is necessary.
The change is not simply a part of production process but almost requires changing entire production system of entire factory. To do this, businesses must first thoroughly understand the information and processes to meet and comply with CBAM. At the same time, it is necessary to prepare large human, technological and financial resources to meet CBAM.
With identified advantages and disadvantages, Ms. Xuan recommends that businesses cannot go out alone when going to the big sea but need to participate in better network activities to capture information and have plans to prepare deeper, better and at the same time learn and gain experience to successfully meet regulations and participate in supply chain.
Next, businesses need to apply digital transformation in management so that the flow of data in the factory continuously helps leaders update information and make timely decisions. In particular, businesses need to focus on building a compliance department. This department updates information about customer requirements to accurately transfer them to the production system.
"Those are activities that businesses must be prepared for. With role of connecting leather and footwear business community, Vietnam Leather, Footwear and Handbag Association will be an intermediary to help businesses access sources of financial capacity to have cash flow to stabilize production and business; support businesses to innovate and apply science and technology; approach programs supported by international organizations to improve management capacity, management, technology, meeting increasingly high standards of export markets", Ms. Xuan said.

Source: Vitic/ congthuong.vn