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It’ll be difficult to increase Vietnam’s share in US footwear market   2010-09-10 - Thoi bao Kinh te Saigon

According to Peter T. Mangione, Director of the US-based Global Footwear Partnerships LLC, a marketing consultancy firm, the US footwear market is very stable, and it will be very difficult for Vietnamese companies to expand their market share in the US.

 

 
Mr Mangione spoke at the 29th International Footwear Conference (IFC) held in HCM City on September 9.  According to Mr. Mangione, there is only one way for a shoe exporting country to increase its market share in the US – scrambling for market share from other exporters. However, he warned that this is a very difficult task, because the US footwear market has been very stable.

 

He displayed figures on the market share held by big footwear exporting countries in the US.  China holds 87 percent of market share, while Vietnam’s market share hovers around five and six percent because of slight changes in market share held by Indonesia, Brazil, and Thailand.

 

In 2009, Vietnam’s footwear market share in the US increased to six percent.  A noteworthy fact is that export volume increased by 11.8 percent, but export value decreased by 2.5 percent.  Market share declined by five percent in the first three months of 2010, with export volume down by 0.1 percent and export value down by 4.2 percent.  Meanwhile, China’s shoe exports to the US strongly recovered after volume decreased nine percent in 2009.

 

According to Mr Mangione, the US market is very competitive.  In order to squeeze into the market, shoemakers need to not only have good brands, but they also need to build supply chains in order to increase their presence in the US.  Mr. Mangione also showed the list of shoe companies that he thinks need to increase their presence in order to increase sales in the US.  The list includes Nike, Adidas, and Puma.

 

He explained that it is very difficult to compete with US shoe companies, because most have their products outsourced in other countries, while they only focus on marketing, research, and development.

 

The expert also believes that Vietnam cannot compete with China in terms of pricing, especially in the US market.  This is because China has very large production capacity.  A company in China can make thousands shoes in a day.  Mr. Mangione suggests Vietnamese companies increase their presence in the domestic market and strengthen exports to European countries.

 

According to the Vietnam Leather and Footwear Association (Lefaso), Chinese-made footwear now accounts for 40 percent of market share in Vietnam.

 

Many famous shoe companies like Nike and Adidas are trying to relocate production from China to Indonesia, while maintaining a production presence in Vietnam.  Labor costs in China have increased from 40 cents to 60 cents per hour, and production costs in China have been steadily increasing. This is considered an advantage for Vietnam.  However, China remains the largest supplier of shoes for the US.

At IFC, experts said that Asian countries could also be a potential market for shoemakers, especially with demand in the US decreasing.  China in particular is a market with great potential, thanks to high urbanization and sharply increasing purchasing levels.  On average, a Chinese person purchases 2.5 pairs of shoes per year. Shoe purchasing levels are also high in other Asian markets, including Japan (5.5 pairs), South Korea, and Taiwan.



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