Footwear export shows strong rebound in first half

Vietnam’s leather, footwear, and handbag export value is expected to reach $22 billion in 2021

According to the Vietnam Leather, Footwear and Handbag Association (Lefaso), footwear exports in the year to date have shown strong recovery momentum.

Along with this, handbags, suitcases, and umbrellas, despite reporting a lower increase of only 7.9 per cent, helped bring in nearly $1.7 billion in export value.

Footwear and bags contributed more than $12 billion to $157.63 billion in Vietnam’s total export value in the first half, up 28.4 per cent over the same period last year.

Lefaso said that although the epidemic is still a global complication, holding up Vietnam’s key export markets like the US and the EU, the purchasing power has recovered strongly, boosting order intake for Vietnam.

The global leather and footwear market is forecast to reboot strongly in the second half, helping to brighten the country’s export prospects.

An important driving force as pointed by the Ministry of Industry and Trade is that in the first half of 2021 local leather and footwear businesses have actively availed of the advantages brought by new-generation free trade agreements (FTAs), especially the EVFTA to push up export.

By the end of the second quarter of 2021, the order intake to traditional export markets like the US and the EU had surged by more than 10 per cent. According to reports by businesses, until present, major enterprises have had export orders for the whole year.

“Stable production in many areas with manufacturing plants are luring orders into the country's leather and footwear industry. In addition, competitive labour cost, skilled workforce and political stability are the factors that prompt importers to place orders with local firms,” Lefaso said in a recent statement with local media.

Meanwhile, China's labour cost has undergone a sharp jump in the year to date. In Myanmar, the country’s political instability has adversely affected production and order placement.

Cambodia has also been hit hard by the COVID-19 pandemic and social distancing policies have been forcing importers to recalculate orders. In this context, Vietnam’s leather, footwear, and handbag export value is expected to reach $22 billion, equivalent to 2019 levels.

According to recent figures by the General Statistics Office, Vietnam’s total import and export value came to $316.73 billion in the first six months of this year, up 32.2 per cent on-year, of which export brought in $157.63 billion, up 28.4 per cent and import reached $159.1 billion, an excess of 36.1 per cent.

Despite the negative impacts of COVID-19 pandemic causing many factories in large industrial zones in Bac Ninh, Bac Giang, or Danang to face production interruptions, Vietnam’s export value in June still registered double-digit growth compared to the same period in 2020. Accordingly, the total export-import value reached an estimated $54 billion, up 25 per cent on-year.

As for major export markets in the first half of this year, the US is Vietnam's largest export market with $44.9 billion in total export value, showing a 42.6 per cent jump over the same period last year. Next is China with $24.4 billion, up 24 per cent; the EU came third with $19.3 billion, up 17.4 per cent. Vietnam’s export value to ASEAN reached $13.8 billion, up 26 per cent and to South Korea amounted to $10.5 billion, up 14.7 per cent, and to Japan $9.9 billion, up 6.9 per cent.