| Leather and footwear exports to markets with FTAs grow strongly. Market is quiet, leather and footwear businesses find ways to overcome difficulties. |
Return Order
After the Lunar New Year holiday, many footwear export enterprises continuously received good news when orders returned, factories were bustling with production, and workers were allowed to work overtime. Mr. Nguyen Chi Trung - Chairman of the Board of Directors of Gia Dinh Group Joint Stock Company said that the very good signal for the enterprise was that it received a relatively large number of orders from customers. Currently, Gia Dinh has received orders until the end of June 2024. At the factories, workers are working overtime 5 days/week, 2 - 2.5 hours per day. Producing footwear products of average quality or higher and with high difficulty is an advantage that helps enterprises have more orders at the beginning of the new year.
"We have made changes by focusing on expanding small markets and new markets. Diversifying products makes orders more abundant and less dependent on orders from traditional customers," said Mr. Nguyen Chi Trung.
Similarly, at Ever Tech Plastic Vietnam Co., Ltd. (Binh Duong province) - a company specializing in the production and processing of shoe soles and molds, the working atmosphere is also more bustling. Ms. Nguyen Thi Ngoc - Deputy General Director of Ever Tech Plastic Vietnam Co., Ltd. said that the factory currently has orders for the first months of 2024.
According to Ms. Ngoc, the company's main export markets are the US and EU. To maintain the market, the company is shifting to making many different large and small orders. Along with that, the unit is trying to find orders through green production methods to adapt to the increasingly high demands of the market.
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| Leather and footwear businesses have orders again |
In fact, many businesses in the industry also said that the number of orders from large markets has not recovered significantly, but smaller markets such as the Middle East, or some other regions in Asia... have increased, so it can partly compensate for the lack of orders from traditional markets.
Figures from the General Statistics Office show that as of February 15, 2024, footwear exports reached more than 2.46 billion USD, an increase of more than 16% over the same period. According to Ms. Phan Thi Thanh Xuan - Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association, for export markets, the footwear industry still focuses on 5 main markets: the US accounts for the largest proportion of about 35%, followed by the EU at 26%, Japan and Korea. China alone currently accounts for 9% of the proportion and the turnover is increasing day by day. This is also the market that helps the footwear industry have room for export growth in 2024.
Strengthen trade promotion
Along with forecasts of recovery in traditional European and American markets, businesses also expect niche markets to contribute to making the export picture brighter in 2024.
However, many experts believe that the difficulties and challenges of the footwear industry are still ahead. According to Ms. Phan Thi Thanh Xuan, green standards and sustainable development such as policies on ecological products, extended responsibility to manufacturers, supply chain traceability, etc. can be applied by Vietnam's major footwear import markets as early as 2024 and will impact the industry's exports in the next few years. Compliance with these criteria is mandatory. When complying with these regulations, businesses must carry out many activities to upgrade their internal capacity. The upgrade must come from technology and management, along with increasing input costs while output costs increase very little, which is extremely great pressure on businesses in the industry.
Sharing the same view, Mr. Nguyen Chi Trung - Chairman of the Board of Directors of Gia Dinh Shoe Company said that in order to develop sustainably, maintain orders and markets, enterprises need to restructure production in conjunction with reducing business costs; at the same time, improve design capacity, build brands, apply new materials and improve competitiveness, moving towards focusing on production in accordance with market needs and trends, meeting the strict standards of importers.
To do this, businesses need to join together. Mr. Nguyen Quang Vu - Chairman of Binh Duong Leather and Handbag Association, said that individual businesses cannot have enough capital to invest on their own, so they must consider producing according to an ecosystem to be able to meet the requirements of the world market. According to Mr. Vu, at this time, for the leather and footwear industry, the business community must join forces in a chain, which is the only way to develop. "In the context of "orders being as precious as gold", trade promotion is one of the best solutions for businesses to find new customers, exploit every opportunity to boost exports and expand the market" , Mr. Vu emphasized.
To support businesses, on the part of the Ministry of Industry and Trade in 2024, the Ministry will carry out large-scale trade promotion activities, national and international, commensurate with the position and image of Vietnam in the international market; especially in export industries and fields with strengths, in key export markets. Typically, the 33rd Vietnam International Trade Fair (Vietnam Expo 2024); International Fair of Industrial Products Supply Chains in 2024... At the same time, continue to innovate and promote the diverse and flexible implementation of trade promotion forms, expanding new export markets.
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