Good growth potential seen in VN shoe industry
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Locally made footwear is the first choice for most Vietnamese consumers, the Vietnam Leather and Footwear Association (LAFASO) said citing a recent survey on consumer behaviour patterns conducted in Hanoi, HCM City, Hai Phong, Thanh Hoa and Binh Duong.
The survey was an attempt to help enterprises keep abreast of market demand and develop strategies for product design, pricing and distribution.
The survey showed that almost two-thirds or more than 70 per cent of the respondents would opt for locally made shoes and sandals.
The association said the survey also highlighted the growth potential of the domestic footwear market.
It found that about 65.9 per cent of the respondents spent less than 200,000 Vietnamese dong (approximately Bt300) per month on footwear, but 20 per cent said they were ready to send up to 500,000 dong on their shoes, while others were ready to spend even more.
Industry insiders said these figures indicate great growth potential since consumers appear willing to spend significant sums on their footwear, and this expenditure would only rise when incomes go up in the future.
Three well-known Vietnamese shoe brands most favoured by the respondents were Biti’s, Thuong Dinh and Vinagiay, the survey found.
Nguyen Thi Thanh Xuan, deputy general secretary of LEFASO, said the survey results would help domestic producers understand Vietnamese consumers better so they can develop suitable production and marketing strategies.
Local firms can also adjust their product designs to better meet consumer preferences, she said.
The survey showed, for instance, Vietnamese consumers bought their footwear at retail shops (40.8 per cent), footwear centres (28.3 per cent) and the companies’ own stores (18 per cent). They mostly made their choices based on price, quality assurance and convenience, Xuan said.
The survey findings indicate that despite their limitations in production capacity, design and distribution, domestic footwear makers have an opportunity to expand their market share in the coming years, she said.
Nguyen Duy Thanh, deputy general director of Binh Tien Consumer Goods Co Ltd (Biti’s), said footwear played a big part in fashion, so it was very important to continue creating new products and designs, especially considering the fierce competition from Chinese imports.
Each month, Biti’s needs to introduce at least 50 new designs if the company is to survive, Thanh said.
In addition to improving product quality and design, Biti's is also investing in distribution networks and after-sales service, he said.
The company’s factory has an annual production capacity of 20 million pairs, 55 per cent of which are sold locally via 60 distribution centres and 3,500 agents.
As a result, the company has been able to increase its turnover by between 20 and 30 per cent every year, Thanh said.
Xuan said design was the Vietnamese footwear industry’s weakest point.
This could be seen in the fact that 59 per cent of the respondents who prefer to buy imported shoes said their choice was influenced by design, she said.
To further expand their market share, domestic shoemakers should pay more attention to improving product designs and come up with effective sales strategies, Xuan said.
