Vietnam export focus ‘disabling’ footwear, garment firms

While Vietnamese footwear and garment industries have been successful in entering many markets worldwide, their makers are finding it tough approaching customers at home, experts said.

Dinh Thi My Loan, deputy chairman of Vietnam Retailers Association, said local producers meet only 30 percent of local demand despite trying their utmost to improve their image and competitiveness.

Loan said local businesses have yet to develop a fashion industry that would enable them to introduce footwear and apparel at home and increase their share of the domestic market.

Local firms were also hobbled by an underdeveloped distribution system at fashion stores and supermarkets where Vietnamese customers mostly did their shopping, she said.

Vietnamese customers buy about 130 million pairs of footwear per year or 1.5 pairs per capita. Up to 70 percent of this is supplied by imports, which are categorized in various qualities ranging from low, like Chinese goods, to luxury, such as Italian ones.

A pair of shoes made by Vietnamese producers is priced at about VND150,000 (US$8), but a Chinese-made pair is available for just around 19 yuan (VND55,000 or $2.5) at Ha Khau, a Vietnamese town bordering China. Footwear from Italy are sold at several hundreds of dollars.

The footwear revenue in the home market is estimated at $1- 1.5 billion a year.

Vu Van Minh, general director of Giay Viet Corporation, said the home market offers great potential for local footwear producers with its great numbers of young consumers. More than 30 percent of 86 million Vietnamese are aged under 30.

“However, the biggest barrier for local producers is that the designs are not good enough to convince local consumers,” said Minh. “Vietnamese designers are creative but their owners fail to understand what designs their customers like as they ignore market research.”

Local producers were focused on export contracts where they paid no attention to design, so they had nothing to offer the home market, he added. In most footwear and garment export contracts, local firms are typically provided with the design and materials that factories have to execute, so there is no impetus for the growth of local design industry in these sectors.

Pham Gia Hung, director of the Vietnam Textiles and Apparel Association, said both footwear and apparel businesses should join hands to develop the fashion industry toward boosting their local presence.

Hung said the move would help them combine research, design and promotion not only at home but also for export markets.

Vietnam is the world’s second largest footwear exporter after China, shipping more than $4 billion worth in 2009. The country shipped $9 billion in textile and apparels last year and is ranked among the world’s top ten exporters in the sector.

Tags: Vietnam Footwear, Vietnam Footwear Exports, Vietnam Garment