According to statistics from the General Department of Customs, Vietnam's footwear exports in October 2022 reached a turnover of 1.96 billion USD, up 9.5% compared to September 2022 and up 109.4% over October 2021.
In the first 10 months of 2022, Vietnam's footwear exports reached a turnover of 20.12 billion USD, up 41.4% over the same period in 2021.
Currently, footwear is the group with the 5th largest turnover in Vietnam, after phones, computers, machinery, and textiles. Footwear exports account for 6.4% of Vietnam's total export turnover in the first 10 months of 2022.
The export market of the footwear group is quite diverse, mainly in the Americas, Europe, and Asia.
In October 2022, Vietnam mainly exported footwear to the US market. Exports to this market accounted for 35.6% of Vietnam's total export turnover. Followed in second place is the EU market. Footwear exports to the EU accounted for 27.7%. Vietnam’s footwear exports to these two regions increased sharply in October 2022 compared to October 2021. Specifically, exports to the US market increased by 52.8% and the EU by 175.4%.
Because the export of footwear to several markets increased sharply in September 2022, in the first 10 months of 2022, footwear exports to many markets increased at double-digit rates, such as the US increased by 40.9%, the EU by 54.2%, Japan by 36.4%, the UK by 44.9%, Canada by 67.8%, etc.
Vietnam ranks second in the world in terms of footwear exports after China, exporting 1 billion pairs of footwear each year to countries globally.
By the end of 2021, Vietnam had about 2,200 footwear manufacturing enterprises, mainly located around Ho Chi Minh City. Ho Chi Minh City and earn about 20.78 billion USD from footwear exports in 2021.
China is the largest footwear producer in the world and home to the biggest footwear spenders. While mainland China’s spending on footwear is significantly lower, Hong Kong residents have the highest footwear spending globally, at 372 USD per capita in 2021.
However, in the context of the current geopolitical situation, the rising wages in China, and the disruption caused by Covid, shoe manufacturers tend to move out of the world's most populous country.
Big brands like Nike and Adidas have decided to locate their main production facilities in Vietnam. Nike has more than 100 suppliers in Vietnam, with 96 factories concentrated in the southern region. Adidas has also chosen Vietnam as its primary production region. The 2020 annual report of Adidas highlighted that around 40% of its total footwear production came from Vietnam in 2019.
In addition to lower labor costs compared to China, Vietnam has gained other advantages by signing trade agreements. The FTAs assist in reducing tariffs and trade barriers for major markets. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has helped increase Vietnam's footwear exports to Canada and Mexico.
According to analysis from Research and Markets, Vietnam's footwear production and exports are expected to continue to grow in 2022-2031. The organization predicts a CAGR of 8.1% over the next 9 years.
Research and Markets expect the Vietnamese footwear market to reach 38.7 billion USD - double the 2022 estimate of 19.1 billion USD by 2031. Much of this anticipated growth can come as companies move out of China. Companies like Nike have emphasized their intention to increase production further in Vietnam.
Other factors, including the availability of a young, driven workforce, may also influence companies moving operations from China to Vietnam.
After the EVFTA officially took effect, Vietnam's footwear exports to the EU market gradually recovered. Currently, Vietnamese footwear has an advantage over competing countries such as China, Myanmar, India, and Cambodia.
In addition to the traditional advantages of labor, a stable political environment, participation in bilateral and multilateral FTAs, and good disease control are forecasted to help Vietnamese footwear companies to attract orders from other countries.
(First 9 months of 2022)
Source: The Ministry of Industry and Trade
Compiled by VietnamCredit