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Local footwear producers slip in domestic market
Vietnam’s leather and shoe industry had good exports in recent years, but since last year that market has slowed down, with businesses losing their market position.
They turned their attention to the domestic market, which has been dominated by foreign products, particularly those from China and Thailand.
Domestic footwear production is a poor model, foreign production is low cost
Vietnamese footwear producers have not been able to carve out a strong presence in the domestic market as foreign offerings are better designed and cost less.
Many kinds of footwear made by Vietnamese manufacturers can be found in HCM City’s markets but they struggle against Chinese and Thai competition.
A footwear wholesaler in An Dong market says many people like products from foreign countries due to their good design. Domestic production is good quality but its designs are simple and many styles are similar, while most customers, especially young people, like fashionable models, they do not care about price or quality.
Huynh Quang Thai, a footwear trader, says he delivers goods directly to small booths at the markets in District 5 for an average of VND85,000 ($5) for famous brands made in Vietnam and sold to customers at around VND140,000 ($8.2). However, shoe sellers pay just VND65,000 ($3.8) for products with diverse designs from China.
Footwear made in Thailand also has a major presence in the Vietnamese market, offering, like the Chinese, a wide variety of designs at lower cost.
Local companies failing to compete
Vu Van Minh, general director of Vietnam Shoes Company, says footwear consumption in the domestic market has reduced by 30-40 per cent compared with the same period last year.
According to the Viet Nam Leather and Footwear Association, domestic tanneries are capable of meeting just 20 percent of national demand. Vietnam has to import the rest.
Mr.Minh also says local businesses have lost significant market share to foreign competitors because they lack distribution networks, and have not yet built up their brand on the local market.
The price of footwear this summer is around VND100,000- 200,000, an increase of 10 percent compared with last year. Traders say increasing prices does not affect demand as footwear is an essential purchase. A Person, on average, owns three to five pairs.
As a result, many domestic manufacturers are in deep trouble and facing the threat of closure. Some have even changed to distributing foreign products.
VietNamNet/SGGP
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