Leather and footwear exports grow steadily despite mounting pressure

Large market share abroad

Most notably, the nation’s footwear products and bags accounted for a large market share in its major export markets, such as the United States (41.7% and 45.4%, respectively), the European Union (28.6% and 27.1%), China (11% and 3%), and Japan (6.3% and 11.3%).

Phan Thi Thanh Xuan, general secretary of the LEFASO, revealed that among major importers of Vietnamese leather and footwear products, China represents a potential market with a high growth rate.

This is also an important market that can help the leather and footwear industry to fulfil its annual export target, Xuan stressed.

Moreover, the industry has taken full advantage of incentives from new-generation free trade agreements (FTAs), such as the EU-Vietnam Free Trade Agreements (EVFTA) and the Comprehensive and Progress Agreement for Trans-Pacific Partnership (CPTPP) to boost exports, she added.

Challenges ahead

However, the industry is predicted to face numerous challenges ahead due to new stringent regulations set by foreign importers, Xuan said.

For example, the EU has set forth a series of regulations on ecological products, extended producer responsibility, supply chain traceability, and carbon emission reduction for imported products.

"If we want to successfully engage in the global supply chain, there is no other way we must abide by these requirements,” Xuan emphasised.

Gerwin Leppink, an expert at the Wrap Organization, also said to further penetrate the US and EU markets, Vietnamese businesses are required to comply with all of the Customs and Border Protection’s regulations.

According to Xuan, to meet these stringent requirements, firms must work to renovate technology and enhance management skills.

She also underlined the need to promptly grasp information and devise specific plans on green transition and digital transformation in a bid to reduce costs.

Currently, the EU’s Carbon Border Adjustment Mechanism (CBAM) looks set to represent a challenge for Vietnamese leather and footwear products in the coming time as the sector is widely considered to cause a lot of carbon emissions during the production process.

There is a high possibility that CBAM will be applied to the leather and footwear industry by 2030, meaning that Vietnamese leather and footwear businesses are required to draw up concrete plans in terms of technology and management to meet these strict regulations, Xuan noted.

Source:VOV