A report by Vietnam Leather and Footwear Association shows that Vietnamese leather and footwear industry operates in a volatile context with purchasing power in major markets not yet fully recovering, input costs continuing to rise and increasingly stringent environmental and traceability standards. However, thanks to advantages in production capacity, processing experience and ability to utilize free trade agreements, the industry has maintained positive growth momentum.
December 2025 saw clear signs of improvement when export value of leather, footwear and handbags reached US$2.66 billion, an increase of 7% compared to November 2025, equivalent to an increase of approximately US$180 million. Alongside this, import of machinery and equipment reached US$12.19 million, a significant increase of 38% compared to the previous month. Thanks to high export growth, the industry's trade balance in December 2025 reached a surplus of US$2.48 billion.
Overall for 2025, export structure continues to show the leading role of foreign direct investment (FDI) sector. Export of leather goods, footwear and handbags from the FDI sector reached US$22.82 billion, accounting for approximately 80% of total export value of the entire industry, an increase of 17% compared to 2024. Meanwhile, domestic enterprises achieved US$5.84 billion, a growth rate of up to 29%, reflecting commendable efforts in expanding market share and taking advantage of market opportunities.
Despite its modest scale compared to FDI sector, high growth rate of domestic enterprises shows that there is still significant room for development, especially with better support in supporting industries, credit and market access.
Regarding markets, Vietnam's footwear exports in 2025 will continue to focus on traditional markets, including the United States, EU, China, Japan and South Korea. The United States remains the largest market with a turnover of US$11.01 billion. EU ranks second with nearly US$6.88 billion, continuing to be a market with high requirements for environmental standards and social responsibility. China reached US$1.78 billion, Japan US$1.61 billion while South Korea ranked fifth with US$776 million.
Specifically in EU market, export in 2025 are projected to grow compared to 2024, with the Netherlands leading with $2.11 billion, followed by Belgium ($1.36 billion), Germany ($939 million), France ($767 million), Italy ($678 million) and Spain ($587 million). This structure demonstrates role of major logistics and distribution centers in Europe in Vietnam's footwear supply chain.
Notably, exports to Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) bloc continue to maintain growth momentum. Japan leads with $1.61 billion, followed by Canada ($816 million), Mexico ($737 million) and Australia ($537 million). Leveraging tariff preferences from the CPTPP is contributing to market diversification and reducing dependence on a few large markets.
Alongside exports, domestic market for footwear industry is projected to reach approximately US$1.05 billion in 2025 and is forecast to increase to US$1.544 billion by 2033, with an average annual growth rate of 4.86%. Domestic consumption is estimated at around 155 million pairs of shoes and sandals annually.
However, domestically produced goods currently only accounts for nearly 40% of the market share, while import, mainly from China, accounts for nearly 30%, with the remainder coming from other countries. This indicates significant potential for expanding the domestic market share, but also reflects increasingly fierce competition.
Regarding distribution systems, traditional sales channels remain prevalent in rural areas, while branded businesses are expanding into modern retail channels and e-commerce.
Nevertheless, leather and footwear industry still faces many challenges, notably price competition from cheap imported goods and strong international brands; prevailing export processing mindset; limited distribution network; and prevalence of counterfeit and imitation goods, affecting consumer confidence and business reputation.
Removing "bottleneck" to achieve new goals
Given above situation, Vietnam Leather and Footwear Association believes that for businesses to overcome difficulties and achieve export targets in 2026 and subsequent years, comprehensive solutions are needed from both the State and the business community.
Regarding policy, it is necessary to quickly finalize development orientation of the industry towards sustainability, stability and consistency; reform administrative procedures associated with the specifics of production along value chain; and have policies to support development of supporting industries, increase localization rate and improve ability to meet rules of origin. At the same time, it is necessary to strengthen role of market coordination, early warning of trade risks, and support businesses in meeting increasingly stringent environmental and traceability standards.
"The Association hopes that ministries and agencies, including Ministry of Industry and Trade, will actively support footwear industry in completing fashion raw materials and accessories trading center. This is a foundation for sustainable development of the industry," suggested Ms. Phan Thi Thanh Xuan, General Secretary and Vice President of Vietnam Leather and Footwear Association.
On business side, the Association emphasized need to promote green production, diversify export markets and gradually invest in building Vietnamese footwear brands. The shift from purely processing to a model with higher added value is not only a market requirement but also an inevitable path for the sustainable development of the footwear industry.
It can be seen that by 2025, Vietnamese footwear industry will maintain its growth momentum and position in the global supply chain, but structural challenges are becoming increasingly evident. Achieving export targets in 2026 and subsequent years will largely depend on the ability to overcome bottlenecks related to costs, standards, localization, and development models – a "problem" requiring close collaboration between the State, industry associations and businesses.

Source: Vitic/ congthuong.vn