Footwear producers aim for 50 percent of market share

Vietnamese footwear producers have set up an ambitious plan of gaining 50 percent of the domestic market share in 2010, far exceeding the current level of 30 percent.

According to the Leather and Shoes Research Institute, Vietnamese people use 130 million pairs of shoes per annum, or 1.5 pairs per person per annum. Currently, 70 percent of products to meet the demand are being fed by imports.

Vietnamese producers believe that the domestic market can be raised to 50 percent, but admit this is a difficult task.

Diep Thanh Kiet, deputy chairman of the Leather and Footwear Association (Lefaso) told Thoi bao Kinh te Saigon that a series of actions need to be taken immediately.

Vietnam now has 500 enterprises operating in the footwear industry, but 70 percent of enterprises simply do the outsourcing for world famous footwear companies such as Nike, Adidas or Converse. Therefore, Kiet said, Vietnamese producers need to build up brand names of their own to conquer the domestic market. Meanwhile, it would be not an easy task, because Vietnamese producers have been relying 100 percent on foreign partners in terms of technology and product design.

Kiet said that Lefaso will assist members by encouraging the enterprises to cooperate and hire experts for branding. It is clear that enterprises will be able to save money if they cooperate instead of working separately.

Kiet also emphasized the need to set up a distribution network, where enterprises gather to sell products at certain sale points, like Viet Shoes Plaza or Tax trading centre. “With Vietnamese products being gathered at the same place, consumers will know where they have to go when they need to purchase Vietnam-made shoes,” Kiet said.

Kiet went on to say that it is necessary to establish a centre in charge of inspecting Vietnam made footwear products and granting certificates on meeting quality standards. This will help footwear producers to advertise products and make Vietnamese consumers have confidence in domestically made products.

Lefaso also plans to set up a consultancy centre which will give advice to domestic consumers on how to choose suitable footwear products

The lack of famous brand names, the poor distribution network and the less diversified designs have been cited as the main reasons that make Vietnam made products inferior to imports on the home market.

Vietnam targets exporting 5.3 billion pairs of footwear this year, an increase of 30 percent over the previous year. In 2009, the footwear export turnover was 4.015 billion dollar, down by 15.8 percent in comparison with 2008. Currently, Europe remains the biggest footwear importer of Vietnam, which consumes nearly 50 percent of Vietnam’s footwear export turnover. The US ranks the second and consumes 25 percent of exports, followed by Japan which consumes three percent.

According to the Leather and Shoes Research Institute, Vietnam is losing its competitive edge in terms of prices to the rivals including China, India, Indonesia and Thailand, because Vietnamese producers have to import 70 percent of materials, while the labor cost is no longer cheap. It is expected that in 2010, Vietnamese footwear producers will need 682,000 workers.

VietNamNet/TBKTSG

Tags: Vietnam footwear export, Vietnam Footwear Industry