Vietnam's footwear export orders soared in 2014

In the first four months of this year, Vietnam’s footwear exports grew rapidly, depicting an optimistic outlook for the footwear industry. The footwear industry has set a target of US$12 billion for footwear exports in 2014, which is expected to increase by 20%.

The Office of the National Bureau of Statistics of Vietnam reported that in the first four months of 2014, footwear exports jumped 21.9% year-on-year to US$2.9 billion. The increase in consumption and living standards in various countries has become the main reason for the monthly average increase of over 20% in the first four months of footwear exports. Among them, exports to EU countries have increased significantly.

Vietnam footwear exports have also begun to enjoy the preferential policy of the European GSP that took effect in January 2014. According to the policy, the tariffs on footwear made in Vietnam have fallen from the previous 7.7% to no more than 4%, which has increased the competitiveness of Vietnamese footwear in the EU market. A Vietnamese shoe company representative said that as European economies recover and sales increase, exporters will gain more benefits from these markets. In addition, the tpp agreement will also create more opportunities for Vietnamese footwear exporters in the near future. Vietnam footwear exports benefit from the tpp agreement and will gain more competitive advantages in the United States and Japan.

At present, local shoe exporters benefit from global importers' transfer of purchase locations. Many importers have chosen Vietnam for purchasing since the beginning of the year because of the rising cost of labor in China.

In order to meet the increasing demand for footwear products in domestic and foreign markets, Vietnamese companies are expanding their production scale and improving product quality. Many local exporters reported that their orders have been backlogged to the next six months. In spite of this, the contradiction between Vietnam's footwear industry remains prominent. More than 70% of footwear exports from overseas direct investment companies means that a large share of profits is still obtained by such companies, while 100% of Vietnam's domestic companies still have low added value.

In recent years, some large Vietnamese companies have increased their investment in technology, production modernization, and developed their own brands to export. The proportion of the localization of Vietnam's footwear industry has also increased accordingly, and some market analysts predict that the ratio is expected to exceed 50%.

However, they also warned that many small and medium-sized enterprises still rely heavily on imported raw materials, and more work needs to be done to expand the scope of the production chain.