Leather industry faces challenges to maintain growth

The Vietnamese leather and footwear industry exported goods worth close to $24 billion last year, marking an increase of nearly 35 per cent compared to 2021. However, since the fourth quarter of last year, facing the impact of inflation, Vietnam’s main export markets such as the US, EU, and Japan have reduced consumption.

"The export target in 2023 is more challenging as we are faced with reduced global consumption and enterprises face difficulties in accessing loans and rising production costs," said Thuan.

Last month, footwear exports saw a significant drop, reaching $1.6 billion, down 17.7 per cent over the same period last year. Exports of bags, suitcases, and umbrellas have also seen a downturn, touching $320 million, down 18.3 per cent on-year. This is due in part to the timing of the Lunar New Year, but also the signifiant drop in the number and value of orders. The index of industrial production for January decreased by 14.6 per cent on-month and by 8 per cent compared to January 2022.

Taiwanese shoemaker PouYuen Vietnam is a major contributor to foreign direct investment (FDI) in the footwear industry in Vietnam, with annual revenue of about $1 billion. The company announced it was cutting 3,000 jobs this month and won't be extending labour contracts for a further 3,000 workers later this year, blaming it on a shortfall of orders.

PouYuen is not the only manufacturer impacted by reduced orders, many smaller enterprises have also had to reduce their workforce. Another Taiwanese shoemaker, Ty Hung company in Ho Chi Minh City, cut just under 1,200 workers due to a loss of business last November.

The World Bank and the International Monetary Fund lowered their estimations for global growth last month, with the possibility that the world economy might enter recession. This will further reduce the demand for goods and affect the available investment capital for many countries, including Vietnam.

Additionally, China's return to production is expected to cause a sharp increase in supply before any expected recovery for demand, putting yet more pressure on manufacturers.

Vietnam’s retail sales forecast to reach 350 billion USD by 2025 The scale of the domestic retail market is expected to increase from 142 billion USD at present to 350 billion USD by 2025, contributing 59 per cent of the national GDP, according to the Ministry of Industry and Trade (MoIT).

$27.76 billion of public investment capital allocated in first month of year Accelerating the disbursement of public investment capital is one of the key political tasks in 2023.

Vietnam registers $3.6 billion trade surplus in first month of 2023 Despite a decline in product exports and imports, the goods balance of trade was projected to be $3.6 billion in January 2023.

Digital economy to reach $50 billion by 2050 The scale of Vietnam's digital economy could hit $50 billion by 2050, of which, e-commerce will be the most important contributor.

Textiles and footwear industries face challenges Vietnamese textile and footwear businesses that participate in the supply chain are facing a slew of new possibilities and difficulties, according to industry insiders.