Orders return
Coming back after the Lunar New Year holiday, many leather and footwear export businesses have continuously received good news as orders return, factories are bustling with production, and workers are working overtime. Mr. Nguyen Chi Trung – Chairman of the Board of Directors of Gia Dinh Group Joint Stock Company, said that the signal is very positive for businesses as they have 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 for 5 days a week, 2 – 2.5 hours per day. Producing footwear products with above-average quality and high difficulty levels is an advantage that helps businesses get more orders at the beginning of the new year.
“We have made changes by focusing on expanding into smaller and new markets. Diversifying products makes the orders diverse, less dependent on traditional customer orders”, Mr. Nguyen Chi Trung said.
Similarly, at Ever Tech Plastic Vietnam Co., Ltd. (Binh Duong Province) – a company specializing in producing and processing 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 has already received orders for the first months of 2024.
According to Ms. Ngoc, the company’s main export markets are the US and EU. In order to maintain the market, the company is diversifying its orders of different sizes. Along with that, the company is making efforts to find orders through environmentally-friendly production methods to meet the increasingly high requirements of the market.
Leather and footwear businesses are returning orders
In fact, many companies in the industry have said that the volume of orders from large markets has not yet recovered significantly, but smaller markets such as the Middle East or other areas in Asia have increased, which partly offsets the lack of orders from traditional markets.
Data from the General Statistics Office shows that as of February 15, 2024, footwear exports reached over 2.46 billion USD, an increase of over 16% compared to the same period. According to Ms. Phan Thi Thanh Xuan – Vice Chairman cum Secretary-General of the Vietnam Leather and Footwear Association, the leather and footwear industry is still focusing on 5 main export markets: the US, accounting for about 35% of the market, followed by the EU with 26%, Japan, and South Korea. China currently accounts for 9% of the market share and its size continues to grow. This is also the market that helps the leather and footwear industry have room for export growth in 2024.
Enhancing trade promotion
Together with the forecasts for the recovery of traditional markets like Europe and the US, businesses also expect niche markets to contribute to a brighter export picture in 2024.
However, many experts believe that there are still difficulties and challenges ahead for the leather and footwear industry. According to Ms. Phan Thi Thanh Xuan, green standards, sustainable development policies such as eco-friendly product policies, extended responsibility with manufacturers, supply chain traceability… can be applied immediately in 2024 by import markets of Vietnamese footwear and will impact the industry’s exports in the coming years. Compliance with these criteria is mandatory. When complying with these regulations, businesses must carry out many activities to upgrade their internal capacities. Upgrading must come from technology, management, coupled with the increasing input costs while the output costs increase very low, which is tremendous pressure for businesses in the industry.
Sharing the same view, Mr. Nguyen Chi Trung – Chairman of the Board of Directors of Gia Dinh Shoe Company, believes that to develop sustainably, retain orders and market, businesses need to restructure production associated with reducing business costs; at the same time, improve design capabilities, build brands, apply new materials, and enhance competitiveness, moving towards the production that suits market demands and trends, meeting strict standards of importers.
To do this, businesses need to link together. Mr. Nguyen Quang Vu – Chairman of the Binh Duong Leather and Footwear Association, said that individual businesses cannot have enough capital to invest on their own, so they have to consider producing in an ecosystem 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 collaborate in a chain, which is the only way to develop. “In the context of “valuable quarterly orders”, trade promotion is one of the best solutions for businesses to find new customers, maximize each opportunity to boost exports, and expand the market”, Mr. Vu emphasized.
To support businesses, in 2024, the Ministry of Industry and Trade will implement large-scale trade promotion activities on a national and international scale, corresponding to the position and image of Vietnam in the international market, especially in the industries and areas with export strengths. Typical examples are the 33rd Vietnam International Trade Fair (Vietnam Expo 2024); International trade fair for supply chains of industrial products in 2024… At the same time, continue to innovate and promote diverse, flexible forms of trade promotion, expand new export markets.
