Leather and footwear becomes VN’s spearhead industry

Leather and footwear becomes Viet Nam’s spearhead industry

Despite numerous fluctuations in the global economy, 2019 was considered a successful year for Viet Nam’s leather and footwear industry, as its export turnover reached US$22 billion, exceeding the set target and up 12.2% compared to the previous year, including US$18.3 billion for footwear (up 12.8%) and US$3.7 billion for bags (up 9.1%).

Regarding the export markets, Viet Nam’s footwear products have now been present in more than 100 countries around the world, with 70 markets posting a revenue of over US$1 billion. Five markets, including the United States, the European Union, China, Japan and the Republic of Korea, accounted for 82.3% of the total export value. Some markets registered high growth in turnover, such as the US (increasing by over 10%), and China, the Republic of Korea and Japan (increasing by over 20%). These are also the major export markets for Viet Nam’s bag products, as they made up 85.9% of the total suitcase-bag export turnover.

Facilitating Vietnamese firms’ deeper participation in the global supply chain

At a conference reviewing the sector’s performance in 2019, Chairman of the Viet Nam Leather, Footwear and Handbag Association (LEFASO) Nguyen Duc Thuan assessed that the exports of Viet Nam’s leather and footwear industry grew stably and maintained its competitive advantage in traditional markets.

In particular, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) taking effect in early 2019 has been enabling the sector to expand its export market in the Americas. Accordingly, the CPTPP gives Viet Nam’s footwear industry the opportunity to access some potential markets, such as Mexico and Canada.

The Ministry of Industry and Trade (MOIT) also affirmed that the leather and footwear industry has made good use of the advantages from the CPTPP, especially in the Canadian market, reflected through the increase in the number of preferential C/Os registered in this market right after the agreement came into force.

Experts said that the new markets in the CPTPP bloc not only help Viet Nam’s leather and footwear industry increase its export turnover but also offers an opportunity for Vietnamese businesses to participate in developing new product lines ofhigher value added.

According to the MOIT, in 2019 the Government continued to maintain the macro economy with reasonable interest rates, while accelerating administrative reforms. In particular, the MOIT is developing a strategy to develop the footwear industry until 2030, with a vision to 2035, towards turning the sector into a spearhead industry of the country. In addition, the CPTPP taking effect has created opportunities for businesses, including leather and footwear firms, to boost exports.

In 2020, the leather and footwear industry sets a target to achieve an export turnover of US$24 billion, the industrial production index growth of 11% and a localization rate of 60%, in addition to maintaining a growth rate of 10% compared to the previous year./.

By Vien Nhu