Send Us Your Request

INVESTMENT REPORT VIETNAM SHOES AND LEATHER INDUSTRY Q2/2022
Currently, Vietnam is ranked second in the world in terms of leather and footwear exports, just behind China.

Specifically, each year Vietnam exports more than 1 billion pairs of shoes of all kinds to hundreds of countries around the world. In which, footwear exports to Europe accounted for the largest proportion of total export turnover.

By the end of 2021, there were about 2,200 footwear manufacturing enterprises, which are mainly located around Ho Chi Minh City.

Production and exports increase

Vietnam Leather, Footwear and Handbag Association (LEFASO) said that in July 2022, leather and footwear production only increased slightly by 3.2% compared to the previous month but increased by 25.5% over the same period in 2021. Generally in the first 7 months. the industry's production increased by 15.1% over the same period last year. The employment index in July 2022 also increased by 1.1% over the same period last month and increased sharply by 21.6% over the same period last year.

Exports in the first half of the year increased by 14.2% over the same period, reaching USD 13.81 billion, of which footwear exports reached USD 11.79 billion, up 13.3%; suitcase - bag - briefcase exports reached USD 2.02 billion, up 20%. Among the export markets of Vietnam's leather and footwear, North America experienced the strongest growth with 24.5%, Europe 15.7% and South America 10.8%. Export turnover decreased in the Asian market block with negative 6%.

According to statistics of the General Department of Customs, in August alone, the export turnover of footwear of all kinds reached USD 2.293 billion, up 0.9% over the previous month. In the first 8 months, the export of all kinds of footwear reached USD 16.368 billion, up 29.7% over the same period last year.

Thus, on average, footwear exports reached over USD 2 billion per month. With this base, the leather and footwear industry can fully achieve the export target of USD 22-23 billion in 2022.

The US is still the largest footwear import market of Vietnam, reaching USD 6,029.7 million, Belgium is the second largest market with USD 866.6 million, while China drops to the third position with USD 863.2 million.

According to LEFASO, Vietnam's footwear exports to markets with free trade agreements continued to see a positive recovery. In which, exports to the EU-Vietnam Free Trade Agreement member markets increased by 18.2%, and the UK market through the Vietnam - UK Free Trade Agreement increased by 10.9%.

In contrast, the market bloc of the Free Trade Agreement between Vietnam and the Eurasian Economic Union is still affected by the conflict between Russia and Ukraine, so the export growth decreased greatly to negative 57.7.

95% of the world’s leather material comes from the food industry and is directly affected by meat and dairy consumption. Over the years, China has become the largest leather producer in the world, followed by India, Brazil and the US. The world tanning industry is characterized by small or medium family businesses. Countries with the fastest growing tannery industries, such as Korea, Taiwan, China and Indonesia, have difficulty in supplying raw materials and have to import large quantities of raw leather. about 120,000 – 150,000 tons of raw leather.

The compound annual growth rate in the period of 2013 – 2019e reached 19.2%, in 2019 the production of leather (excluding synthetic leather) reached 144.9 million m², an increase of 23.5% compared to the same period in 2018. Leather production Domestic production is still low, meeting only 40% of the leather demand for export production, forcing businesses to import leather from abroad.