Sustainable strides: Customers outside a shopping mall in Ho Chi Minh City. The leather and footwear enterprises have expanded into new export markets, such as the Middle East, South America and Africa with large consumption potential. — Bloomberg
HANOI: The leather and footwear industry has set a target of achieving export value of US$29bil this year, an increase of 10% year-on-year (y-o-y), according to the Vietnam Leather, Footwear and Handbag Association (Lefaso).
At a conference reviewing the leather and footwear industry in 2024 held here last Friday, Phan Thi Thanh Xuan, the association’s vice-chairwoman and general secretary, said that achieving this goal will depend on consumer demand and implementing green standards and sustainable development requirements set by foreign markets.
Meanwhile the industry will still focus on exporting to available and easy-access markets such as Africa and Asia to increase revenue. Then, it will, step by step, apply high-demanding green standards to conquer demanding markets such as Japan, Europe and the United States.
Leather and footwear enterprises have approached large eCommerce sites, such as Alibaba and Amazon, to open more consumption channels.
At present, a number of large enterprises have signed export contracts to produce until mid-2025.
Also speaking at the conference, Lefaso chairman Nguyen Duc Thuan said the leather, footwear and handbag industry in 2024 achieved a total export value at around US$27bil, an increase of 11.5% y-o-y, despite facing pressure with falling prices, higher quality demands, increasing input costs and labour shortages.
They included US$23.2bil from footwear exports, up 13.2% and US$3.8bil from suitcases, bags and briefcases, up 9.7%.
Thuan emphasised that Vietnam’s footwear industry has many competitive advantages, including a large labour force, competitive costs, a high supply of raw materials and attractive investment policies.
It can also leverage international economic integration via many free trade agreements (FTAs) which have attracted many foreign invested enterprises.
In terms of global standing, Vietnam is the world’s third largest footwear producer, behind China and India, and the second biggest exporter. But it is still mainly processing export products, so the foreign invested enterprises have held about 75% of the industry’s export value.
In 2024, the industry took advantages from FTAs, especially European Union–Vietnam FTA and Comprehensive and Progressive Agreement for Trans-Pacific Partnership, to promote exports.
In addition to traditional markets, with trade promotion activities, the leather and footwear enterprises have expanded into new export markets, such as the Middle East, South America, and Africa with large consumption potential.
Of which, sports shoes – a strong product from Vietnam – have shown significant growth into the Middle East over a short period of time. The industry has set a goal of achieving US$38 to US$40bil in the total export value by 2030.
By 2035, the industry will develop effectively and sustainably according to the circular economic model, and perfect the domestic production value chain to effectively participate in the global value chains.
Simultaneously, it will develop a number of regional and world brands. Presently Vietnam’s leather and footwear exports are facing many major challenges, including the greening trend in the world.
Therefore, meeting the green production standards of the export markets is a difficult task for domestic footwear enterprises.
For example, the European Union (EU) market has imposed requirements on green transformation, especially a series of laws related to this issue.
The biggest challenge for the footwear industry now is sustainability in production and requirements for social responsibility, according to Xuan.
From the second quarter of 2024, the EU market began to introduce new requirements such as ecological design and traceability and transparency of the supply chain.
So, if they are also importing raw materials, domestic enterprises have to be transparent about the entire production process.
Meanwhile, the footwear industry depends heavily on raw material imports, according to Thuan. To achieve the goals, the state must develop and complete relevant mechanisms and policies.
In addition, it must perfect energy policies and mechanisms to help the businesses access green energy according to requirements and commitments.
It also is necessary to have action programmes, including issuance of policies on encouraging businesses to implement green production, at the same time building a unified system of green standards.
Experts say that developing supporting industries and producing raw materials for the domestic leather and footwear industry is extremely important.
The association has proposed the state support for formation of industrial zones for production of materials for the leather and footwear industry, focusing on the production of leather, technical fabrics, accessories and soles.
That will be convenient for environmental protection and create a better centralised production system. — Viet Nam News/ANN
