Bags / Shoes & Accessories

According to data provided by the Vietnam Footwear and Bags Association (Lefaso), Vietnam's footwear manufacturing exports in September were only about US$700 million, a year-on-year decrease of more than 44%. Luggage exports also fell by 48%, leading to a year-on-year decline of nearly 24% in the total exports of the entire industry in September.

However, thanks to the strong growth momentum in the first half of the year, exports of footwear and handbags have maintained positive growth for a total of 9 months. In the first nine months, the export of footwear exceeded USD 13.3 billion, an increase of nearly 10% over the same period in 2020, and the export of luggage was nearly USD 2.24 billion, a decrease of 3.7%.

The United States is still the largest export market for Vietnamese footwear, accounting for 41% of Vietnam's total exports, and luggage and bags accounting for 44%. The European Union ranks second with nearly 23% footwear and 22% luggage market share.

According to the Vietnam Footwear and Bag Association, the reason for the decline in exports of footwear and luggage in recent months is due to the epidemic that has not been controlled since the beginning of May and has caused a large number of factories across the country to stop production, especially in the southern provinces.

The southern region of Vietnam, including Ho Chi Minh City, Dong Nai, Binh Duong, Long An, Tien Giang and other provinces and cities, has concentrated 80% of the country’s footwear and luggage manufacturing plants. The output value and export value of these companies also account for the entire industry. 70%. However, due to the outbreak centered on Ho Chi Minh City, the losses were heavy.

In the northern and central regions of Vietnam, the operating rate of footwear and luggage companies is only 50-80%, and they are also in trouble due to labor shortages, interruption of raw material supply channels, and high cost of epidemic detection.

In addition, containers are scarce, logistics and international shipping costs have risen more than 5 times, high fuel costs and imported raw materials and auxiliary materials. These problems have not improved since 2020, which have greatly affected production and brought considerable difficulties to export manufacturing enterprises.

The association also believes that due to various reasons, the government's relief policy has not actually been implemented in enterprises. "The regulations on beneficiary conditions are too strict, and the administrative procedures for applying for approval are cumbersome, and it is actually difficult for companies to obtain practical support."

They also believe that the production situation has improved since the end of September. However, it will take at least a few months under the "new normal" state of coexistence with the epidemic to return to the level of production before the epidemic.

As with labor-intensive industries such as textiles and garments and seafood processing, as the southern provinces of Vietnam continue to implement compulsory isolation measures, a large number of laborers have set off a wave of leaving cities and returning to their homes. Labor shortage is another reality before manufacturing companies resume production. problem.

The Vietnam Shoe and Bag Association recommends that domestic shoe and bag manufacturers need to make full use of the free trade agreements with other countries, especially the various preferential policies of the "Trans-Pacific Partnership" (CPTPP) and the "Vietnam-EU Trade Agreement" (EVFTA) agreement To expand customers and increase export volume in the last three months of 2021.