Vietnam is Grabbing Footwear Export Share from China

According to the latest report released by the Ministry of Industry and Trade on Tuesday, Vietnam exported nearly $11.8 billion worth of footwear between January and September of this year, a 10.5 percent increase over last year’s total.

Vietnam ranks second after China among the U.S.’s biggest sources of footwear, exporting 404 million pairs of shoes to America in 2017.

This means Vietnam is grabbing export share from China when US – China trade was intensifies and so far there is no indication that the situation is getting better.

The upward trend is likely to continue, too, as rising wages in China increase the cost of goods produced there and the country directs more of its manufacturing resources toward pricier goods like electronics.

Vice President of Ho Chi Minh footwear association, Nguyen Van Khanh, said that Vietnam footwear industry currently has about 700 manufacturers with more than 1.5 million laborers; in which more than 200 FDI contributed to more than 70% of total export share.

Total Vietnam’s footwear export value in 2018 is predicted to reach USD 20 billion. The export value has leaped up to almost 3 times compared to 2011.

Adidas, for instance, said in May that Vietnam had overtaken China as its top supplier for footwear, with Vietnamese factories producing 44 percent of its shoes by volume in 2017, up from 31 percent in 2012, and Chinese manufacturers supplying 19 percent, down from more than 30 percent in 2012.

This balance could help shield the company from potential tariffs or supply chain disruptions if President Donald Trump’s trade war with China continues to escalate, a fact that competitors seem to be taking notice of. Puma, for one, said this spring that its sourcing team was hard at work creating a contingency plan in case trade with China, which produces about a third of its products, is disrupted.

DIEP NGUYEN