The Vietnam Leather, Footwear and Handbag Association (LEFASO) recently said the country’s leather and footwear enterprises may face several challenges, including lack of market information, in the remaining months this year. The order situation of businesses and brands will slow down until the first quarter of 2023 while the existing inventory for fashion items is large, it said.
While importing high-value raw materials is necessary for Vietnamese manufacturers, the domestic leather and footwear industry has not taken advantage of importing new and sustainable technology, equipment and materials from the countries with which Vietnam has signed trade agreements.
LEFASO vice chairwoman and general secretary Phan Thi Thanh Xuan has proposed Vietnam’s trade offices abroad to provide market information for domestic businesses and assist them in finding partners supplying raw materials and accessories in the European Union (EU). That will help the companies take tax incentives from the EU-Vietnam Free Trade Agreement (EVFTA).
The German Supply Chain Act, which will come into effect from January 1, 2023, will strongly affect Vietnam’s production chain of the leather and footwear industry when exporting to the EU market, she emphasised.
Domestic leather and footwear enterprises are yet to receive information regarding specific schedules on implementing the law and requirements on procedures, she was quoted as saying by a Vietnamese media outlet.
Among the export markets of Vietnam’s leather and footwear products, North America still had the strongest growth with 24.5 per cent, followed by Europe with 15.7 per cent and South America with 10.8 per cent.
The export value fell by 6 per cent in Asia and 1.9 per cent in the Oceania.
The United States was still the largest footwear export market of Vietnam, reaching $6 billion, followed by Belgium with $866.6 million and China with $863.2 million.