The winner is… Vietnam. Most people, perhaps everyone actually, say that the Far East country is the real winner in the trade war between the USA and China: in fact, US manufacturers have relocated, and are still relocating to Vietnam, despite some difficulties, part of their production, formerly carried out in Beijing.
Exports are booming
According to Lefaso, Vietnam’s association of leather, shoes and bags manufacturers, in the first six months of 2019 exports have been increasing by 14.2% on annual basis, therefore reaching 8.8 billion dollars. Xinhua press agency made public such data. From January to June, the most important importers of Vietnamese footwear were the United States, the European Union, China, Japan and South Korea. Exports of bags, wallets, suitcases, hats and umbrellas went up by 12%.
Prospective expectations are rather optimistic. Lefaso expect, considering that international orders and deliveries are progressively increasing, exports to rise by 10 to 11% by the end of 2019. One more reason to be optimistic about the future business trend is the commercial agreement signed by Vietnam and EU last month, on June 30. The association aims at reaching 54 billion dollars, in terms of exports of leather goods and footwear, within 2030.
Yet, local industry will have to face and overcome a few challenges. Nguyen Duc Thuân, president of Lefaso, put them forth while speaking to lecourrier.vn: low profits, which hinder Vietnamese companies’ vitality, increasing costs, in order to adjust businesses to social responsibility standards, environment safeguard and compliance with bureaucratic procedures. Furthermore, Vietnamese leather product is affected by some factors: on the one hand, foreign investors control and own the majority share of footwear export market; on the other hand, there is a lack of capital assets, technology, high quality staff and governance skills.