Leather and footwear industry targets US$27 billion in 2023 exports

Thursday, 26/01/2023 15:10
The leather and footwear industry is striving to achieve US$27 billion in export turnover this year, an increase of roughly 10% compared to the previous year amid shrinking major markets and falling demand.

In 2022, the sector grew by more than 30%, with one of the reasons behind this high growth being the effective utilization of free trade agreements (FTAs) such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA).

Furthermore, the shift of production to be able to use local sources of raw materials to increase the localization rate of raw materials in a bid to meet the requirements relating to the origin of goods under FTAs helped the leather and footwear industry meet the export target.

However, many objective factors are forecast to affect the industry’s export growth in the year ahead.

According to Phan Thi Thanh Xuan, vice president and general secretary of the Vietnam Leather, Footwear and Handbag Association (LEFASO), in major export markets such as the United States, the EU, and Japan, inflation has reduced consumer purchasing power, while businesses face high inventories. It is therefore expected that by the end of the second quarter of the year, the leather and footwear industry will begin to record some positive signs.

With some major export markets in the process of shrinking, businesses need to actively improve the overall competitiveness of their products, as well as move to expand their export markets.

"Solutions that we are aiming for is to find new sources of supply, and new markets, and especially to try to make good use of markets in which Vietnam already has signed FTAs. It is worth noting that Vietnamese footwear products also have a pretty good Vietnamese brand name, and the is quite reputable for the product lines, especially sports shoes with big brands. That's why we also hope that amid declining total demand, orders to Vietnam will still be maintained," said Xuan.

Over the past years, the export of footwear and handbags to markets which have FTAs with Vietnam has recorded a growth rate of between 10% and 20%. This serves as a basis for the entire industry to set an export target of US$27 billion this year.

Traffic accidents fall during Tet holiday

As many as 152 traffic accidents occurred in the country during the Tet (Lunar New Year) holiday, from January 20 to January 26, a year-on-year decrease of 12 cases, according to the Ministry of Transport.

Police check a driver's papers on Highway No 1 in Chau Thanh district, Tien Giang province.(Photo: VNA) 

The traffic accidents killed 89 people, down three from last year’s holiday, and injured 111 others, up by eight.

The majority were road accidents, while there are four railway and one waterway accidents.

Road traffic police nationwide punished 21,967 violators with fines totalling 50.4 billion VND (2.1 million USD).

They temporarily confiscated 639 automobiles and more than 9,910 motorbikes and withdrew approximately 4,950 driving licences of different kinds.

Of all the violators, more than 7,726 people were fined for high blood alcohol content, an increase of more than 6,600 people compared with the last Tet holiday.

On waterways, police punished one person with an administrative fine of 1 million VND (42 USD).

Railway police fined four violators 8 million VND (340 USD).

Retail market predicted to bustle in 2023

Although 2023 is forecast to see many difficulties, experts expect this is a recovery year of the retail sector after COVID-19 pandemic as there are many signs showing the return of investors and higher demands.

 Illustrative image (Photo: VNA)

According to the Ministry of Industry and Trade (MoIT), the scale of the Vietnamese retail market is 142 billion USD, which is expected to reach 350 billion USD in 2025, with contributions of 59% to total GDP.

Last year, the total revenue from retail sales of goods and services rose 21%, exceeding the target of 8%.

A survey by Vietnam Report showed that over 53.8% of total retail firms enjoyed similar and higher business results compared to the pre-pandemic level.

Experts held that growth of retail sales is being supported by rise in income and the strong recovery of the tourism sector as well as relevant sectors such as transport and accommodations, as well as the effectiveness of inflation control measures.

Particularly, from now to the Lunar New Year (Tet) Festival, which falls in late January, consumers are predicted to loosen their wallet dramatically.

At the same time, there are signs of vibrant retail activities as many foreign investors have announced their plans to return after COVID-19.

Central Retail aims to raise coverage from 40 localities in Vietnam currently to 55 (Photo: VNA) 

Recently, Thailand’s Central Retail said that it will pump additional 20 trillion VND (852.87 million USD) into the Vietnamese market in the next five years, pushing its investments in Vietnam in the 2022-2026 period to 65 trillion VND. With this plan, Central Retail will raise their coverage from 40 localities currently to 55.

Meanwhile, Japanese giant retailer Aeon Group plans to build another megamall in Hanoi, raising its total trade centres in Vietnam to 20.

Phung Trung Kien, Founder of Vietnam Holdings Inc., said that retail businesses will see good growth in early 2023, especially those trading consumer goods thanks to the Lunar New Year Festival.

In 2023, four trade centres are scheduled to be launched - Central Premium plaza, Vincom Megamall Grand Park, Sunrise City Central and Emart 2 with total area of over 116,000 sq.m.

Many experts predicted that this year, retailers will expand their selling channels, bringing their products to different trading platforms to optimise online retail channels.

MoIT Deputy Minister Do Thang Hai said that in the time to come, the ministry will coordinate with other ministries and localities to keep a close eye on the developments of the market, ensuring the supply of commodities, especially during Tet. At the same time, it will apply measures to control consumer price index (CPI), he said.

Festival marks 234th anniversary of Ngoc Hoi-Dong Da victory

A festival was held at the Dong Da Culture Park in Hanoi on January 26 (the fifth day of the first lunar month) to mark the 234th anniversary of the Ngoc Hoi-Dong Da victory over Chinese invaders.

An art performance at the festival (Photo: VNA) 

In 1789, under the leadership of Emperor Quang Trung (also known as national hero Nguyen Hue), Tay Son troops defeated 290,000 Qing invaders, liberating the imperial city of Thang Long and regaining national independence and freedom.

Since then, the fifth day of the first lunar month has become the traditional day marking the historic victory. The Ngoc Hoi–Dong Da victory has also gone down in Vietnamese history as an immortal and epic struggle for national construction and defence.

Dong Da Mound reportedly witnessed fierce battles between Emperor Quang Trung’s soldiers and the Chinese invaders 234 years ago.

The festival is designed to uphold the country’s cultural values, while educating young generations about the tradition of patriotism and national pride.

At the event, Chairman of the municipal People’s Committee Tran Sy Thanh and leaders of departments, sectors and localities, and local people offered incense in tribute to Emperor Quang Trung./.

Compiled by BTA