Vietnam expected to overtake China in leather, footwear exports to US market

17-Sep-2019 Intellasia | The Saigon Times | 6:02 AM Print This Post

Leather and footwear exports will reach over $22 billion this year, as Vietnam is expected to overtake China as America’s number one supplier in these sectors.

A 2019 breakdown of Vietnam’s worldwide exports shows $18.3 billion from footwear and $3.75 billion from handbags, wallets, suitcases, hats and umbrellas expected for the whole year.

Officials note that the increase in leather exports is largely due to foreign investment from China to Vietnam, as a result of the US-China trade war, along with benefits for Vietnamese exports coming from the free trade agreements it has signed.

However, the sector has faced challenges to meet the target. The lack of input materials for the sector has forced Vietnam to make significant expenditures on material imports, hindering the development of local supporting industries and the fulfillment of commitments on product traceability.

Moreover, labour productivity in the sector is low. A Vietnamese worker can make three to four pairs of shoes per day, while a Chinese worker can produce seven to eight pairs.

The sector’s added value and foreign currency revenue remain low as well. Domestic firms produce only one-fifth of the total footwear product volume, while the remainder is manufactured by foreign-invested firms.

According to the general Department of Vietnam Customs, Vietnam exported $10.36 billion worth of footwear and $2.14 billion of handbags, wallets, suitcases, hats and umbrellas in the January-July period, a respective increase of 12.9 percent and 10.6 percent over the same period last year.

In total, leather goods and footwear generated $12.51 billion in export revenue in the period, up 12.5 percent year-on-year, well above the country’s overall export growth of 7.8 percent.

This growth was impressive, compared with the target, and meaningful to more than 2,000 enterprises operating in the sector with over 1.5 million workers. The results helped Vietnam rank third in terms of production volume and second in exports.

In the seven-month period, 44 import markets of Vietnam’s leather and footwear products reported export turnover of over $10 million each, including 15 markets reporting export revenue of more than $100 million each. Many markets posted significant growth, such as the United States, China, Belgium, Japan, India and Canada.

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Category: Economy, Vietnam

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