Opportunities for footwear industry in domestic market

04/02/2020 | Banuli

Despite being overwhelmed, but according to experts, the domestic market is still a fertile land for the footwear enterprises due to the demand for large consumption and the increasing use of quality products.

According to the Department of Light Industry, Ministry of Industry and Trade, demand for footwear products in the country is about 150 million pairs per year, but the domestic production only meets 40% of demand. "Made in Vietnam" footwear marketed mainly in the low and middle segments of the market and is subject to aggressive competition with Chinese brands. High-end products have started to be exploited by enterprises in the past few years, but in small numbers and are underdog compared to major brands in the world.

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Although the market share of footwear in China, goods of unknown origin are occupying dominant positions in the wholesale markets of footwear from the South to North of the country, however, as noted at An Dong wholesale market (TP. HCM), Vietnamese goods are step by step upgrading their competitive position compared to Chinese goods thanks to the improved quality and design. Some small traders here said that although the Chinese goods, Thai goods sold in the market is still many, but the rate of Vietnamese goods is also increasing due to the increasing in demand of consumers with Vietnamese goods. The reason is that the Vietnamese goods are increasingly improved in terms of design and quality, there are many products of high quality Vietnamese goods have attracted the attention of consumers thanks to the beautiful model, good quality. In addition, the fact that manufacturers are increasingly interested in customer care also contributes to improving the position of Vietnamese goods to consumers.

In the face of the Chinese goods, counterfeit goods, imitation goods, it is not easy for Vietnamese goods to keep current position in the domestic market. This is also the reason why most Vietnamese footwear businesses are aiming to make exports instead of serving domestic consumers. However, being aware of the potential of the domestic market, recently some shoes factories have begun to pay more attention to the "home". Although not many, but there are companies investing in workshops, technology and intending to the production of medium and high-end products, and efforts to deploy market research and marketing activities to bring products into modern and traditional distribution channels.

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Most recently, Sahara International Coroperation spent VND 240 billion to invest in a large-scale, state-of-the-art plant at 64/3 Dong Tam, My Hoa 3, Tan Xuan, Hoc Mon, Ho Chi Minh City to do domestic goods. According to Mr. Nguyen Van Hoang, director of Sahara, the potential of the domestic market is still great. Only for women's footwear, the domestic market annually consumes about 54 million pairs of women's shoes while the domestic footwear production is about 10 million pairs a year, accounting for less than one-third. The number of counterfeit goods, poor quality goods make up a large proportion of total while the genuine goods is only about 5 million pairs.

It is not easy to stand on the domestic market because in addition to meeting the increasing demand of consumers for model, quality, warranty, domestic manufacturers must face to fierce competitive pressure from foreign goods, counterfeit goods, imitation goods. Therefore, despite the high potential but not all enterprises dare to invest in domestic market.

To develop the domestic footwear industry, one thing that businesses can do is to be proactive in domestic chain linkages. At present, some footwear factories have formed domestic chains by purchasing raw materials from local suppliers for production. Therefore, in order to develop the domestic market, enterprises need to promote cooperation in order to create competitive strength. In addition, participating in the domestic chain also helps the footwear industry gradually escape the dependence on raw materials from abroad.

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