VIETNAM LEATHER AND FOOTWEAR INDUSTRY REPORT
Q2/2018
Contents
Executive summary 5
1. Business environment 7
1.1 Macroeconomic situation 7
1.2 Legal framework 14
2. Overview of Global Leather and Footwear Industry 18
2.1 Value chain of Leather and Footwear Industry 18
2.2 Production Methods 21
2.3 Leather industry 23
2.3.1 Production 24
2.3.2 Consumption 25
2.4 Footwear industry 26
2.4.1 Production 27
2.4.2 Consumption 28
2
3 Overview of Vietnam Leather- Footwear industry 29
3.1 History of Establishment and Development 29
3.2 Industry Scale and Features 32
3.3 Leather industry 35
3.3.1 Production – Consumption 36
3.3.2 Export 37
3.3.3 Import 38
3.4 Footwear industry 39
3.4.1 Production 40
3.4.2 Consumption 42
3.4.3 Export 48
3.4.4 Import 53
3.4.5 Footwear prices 54
Contents
3
3.5 Some other leather products 55
3.6 Industry Planning 57
3.7 Driving Forces 61
4. Enterprise Analysis 64
4
MOIT Ministry of Industry and Trade
MARD Ministry of Agriculture and Rural Development
CBICentre for the Promotion of Import from developing
countries
CICB Centre for the Brazilian Tanning Industry
FAOFood and Agriculture Organization of the United
Nations
FED Federal Reserve System
IMF International Monetary Fund
Abbreviation
Lefaso Vietnam Leather, Footwear and Handbag Association
GDVC General Department of Vietnam Customs
GSO General Statistics Office of Vietnam
UN Comtrade United Nations Commodity Trade Statistics Database
USITC United States International Trade Commission
VIRAC Vietnam Industry Research and Consultant
World Footwear
5
The global tanning industry is characterized by
small and medium sized family businesses.
The Far East continues to be the largest net
importer of cow leather.
Executive summary
Latin America is expected to continue to be
the most important net exporter of bovine
leathers.European intra-regional trade is the largest
component of the international footwear
trade, accounting for almost one third of
world exports.
The most prominent issues of the Vietnamese
tanning industry are raw materials,
environmental issues, production technology
and human resources.
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Leather and footwear manufacturing is a key
industry of Vietnam,
Import value of footwear in the years 2010 -
2015 of Vietnam was recorded at a low level of
just under USD 100 million.
Inventory tended to decrease in 2016 and
2017.
Executive summary
.
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1. Business environment
1.1 Macroeconomic situation
1.2 Legal framework
Content
8
1. Business environment
1.1 Macroeconomic situation
• GDP in Q1/2018 was estimated to increase by 7.38% over the same period
last year, which is the highest increase of the first quarter during 10 years.
• In the first three months of 2018, the consumer price index has
fluctuated when CPI in March 2018 decreased by 0.27% against last
month, of which 8/11 groups of goods and services have a decrease in
consumer price index.
Source: VIRAC, GSO
GDP growth, 2010 – 3M/2018
Source: VIRAC, GSO
Monthly CPI fluctuations 2014 - 3/2018
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Increasing disposable income is a positive factor in boosting the
domestic footwear and handbags industry.
1. Business environment
1.1 Macroeconomic situation
Average population and population growth, 2006 -2017
Million people
Total disposable income and household expenditure, 2010 – 2017f
Source: VIRAC, Economist Intelligence Unit
USD billion
Source: VIRAC, GSO
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1. Business environment
1.1 Macroeconomic situation
Source: VIRAC, GDVC
Source: VIRAC, GDVC
USD millionImport export, Q1/2015 – Q1/2018
Export structure by commodity category, 3M/2018
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1. Business environment
1.1 Macroeconomic situation
In the first 3 months of 2018, the USD/VND exchange rate tended to
increase slightly, fluctuating around 22,440.
Source: VIRAC
Source: VIRAC, FIA
FDI attraction by sector, 3M/2018
USD/VND exchange rate, 2016 - 3/2018
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1. Business environment
1.1 Macroeconomic situation – Effects of related industries
Source: VIRAC, GSO
The market share of modern retail in total retail revenue 2014
Source: VIRAC, GSO
VND trillion
Retail sales of goods in Vietnam, 2010 – 3M/2018
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1. Business environment
1.1 Macroeconomic situation
Source: VIRAC
Consumer confidence index - CCI
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14
1. Business environment
1.1 Macroeconomic situation
1.2 Legal framework
Content
15
Regulations on export-import:
Document Date Ministry/Department Content
Legal documents related to leather quarantine
Source: VIRAC summarized
1. Business Environment
1.2 Legal Framework
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1. Business environment
1.2 Legal framework
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Regulations on production:
1. Business environment
1.2 Legal framework
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2. Overview of global leather and footwear Industry
2.1 Value chain of Leather and Footwear Industry
2.2 Production Methods
2.3 Leather industry
2.4 Footwear industry
Content
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2. Overview of global leather and footwear Industry
2.1 Value chain of Leather and Footwear Industry
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Designing
Manufacturing
Retailing
2. Overview of global leather and footwear Industry
2.1 Value chain of Leather and Footwear Industry
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Content
2. Overview of global leather and footwear Industry
2.1 Value chain of Leather and Footwear Industry
2.2 Production Methods
2.3 Leather industry
2.4 Footwear industry
22
OEM/FOB
ODM
OBM
2. Overview of global leather and footwear Industry
2.2 Production Methods
Source: VIRAC
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Content
2. Overview of global leather and footwear Industry
2.1 Value chain of Leather and Footwear Industry
2.2 Production Methods
2.3 Leather industry
2.4 Footwear industry
24
2. Overview of global leather and footwear Industry
2.3 Leather industry – 2.3.1 Production
India and Brazil have abundant sources of raw materials and have
developing tanning industry.
Thousand tons
Leather production, 2010 - 2015
Source: VIRAC, FAO
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2. Overview of global leather and footwear Industry
2.3 Leather industry – 2.3.2 Leather consumption
Source: VIRAC, FAO
Million square feetLeather consumption, 2010 – 2014
Leather consumption structure by products, 2013
Source: VIRAC
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Content
2. Overview of global leather and footwear Industry
2.1 Value chain of Leather and Footwear Industry
2.2 Production Methods
2.3 Leather industry
2.4 Footwear industry
27
2. Overview of global leather and footwear Industry
2.4 Footwear industry – 2.4.1 Footwear production
According to World Footwear data, total global footwear production
maintained at 23 billion pairs in the last two years after an average growth of
5% from 2010 to 2014.
Source: VIRAC, World Footwear
No Country Share Volume
Top 10 footwear producers 2016
Source: VIRAC, World Footwear
Billion pairs
Source: VIRAC, World Footwear
Global footwear output, 2011 - 2016
Footwear production structure by region, 2016
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2. Overview of global leather and footwear Industry
2.4 Footwear industry – 2.4.2 Footwear consumption
Top 10 footwear consuming countries, 2014 - 2016 (Million
pairs)
Source: VIRAC, Worl Footwear
Source: VIRAC, World Footwear
Billion pairs
Source: VIRAC, World Footwear
No Country 2014 2015 2016
Global footwear consumption, 2010 - 2016
Market share of consumption by region, 2016
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2. Overview of global leather and footwear Industry
2.4 Footwear industry – 2.4.2 Footwear consumption
Sport shoes consumption value, 2015 – 2017e (USD million)
Source: VIRAC, Euromonitor
Source: VIRAC, Euromonitor
USD million
Source: VIRAC, Euromonitor
Loại giầy 2015 2016 2017e
Footwear consumption by type, 2015 – 2017e
Footwear consumption value, 2012 - 2017e
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
3.2 Industry Scale and Features
3.3 Leather industry
3.4 Footwear industry
3.5 Some other leather products
3.6 Industry planning
3.7 Driving forces for development
Content
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
3.2 Industry Scale and Features
3.3 Leather industry
3.4 Footwear industry
3.5 Some other leather products
3.6 Industry planning
3.7 Driving forces for development
Content
34
Category Value
General information about the leather and footwear industry of Vietnam
Source: VIRAC, GSO, GDVC
3. Overview of Vietnam's Leather and Footwear Industry
3.2 Industry Scale and Feature
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3. Overview of Vietnam's Leather and Footwear Industry
3.2 Industry Scale and Feature
Localization ratio by enterprises and sectors (%)
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
3.2 Industry Scale and Features
3.3 Leather industry
3.4 Footwear industry
3.5 Some other leather products
3.6 Industry planning
3.7 Driving forces for development
Content
37
Total output of some tanned leather products, 2012 – 3M/2018e
3. Overview of Vietnam Leather- Footwear industry
3.3 Leather industry – 3.3.1 Leather Production – Consumption
Source: VIRAC, GSO
Million m²
* Excluding synthetic leather
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Source: VIRAC, Lefaso
Source: VIRAC, UN Comtrade, Lefaso
3. Overview of Vietnam Leather- Footwear industry
3.3 Leather industry – 3.3.2 Leather import
USD million
Tanned leather imports, 2010 - 2017e
Tanned leather import structure by country, 2017e
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Source: VIRAC, UN Comtrade, Euromonitor
3. Overview of Vietnam Leather- Footwear industry
3.3 Leather industry – 3.3.3 Leather export
Leather exports, 2012 – 2017e Leather export structure by country, 2016e
Source: VIRAC, UNComtrade
USD million
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
3.2 Industry Scale and Features
3.3 Leather industry
3.4 Footwear industry
3.5 Some other leather products
3.6 Industry planning
3.7 Driving forces for development
Content
41
Number of enterprises by region, 2015
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.1 Footwear production
Source: VIRAC
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3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.1 Footwear production
Total output of main products, 2012 – 3M/2018e
Source: VIRAC, GSO
Million pairs
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Source: VIRAC, Euromonitor
Source: VIRAC, World Footwear
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.2 Footwear consumption
Million pairs
VND trillion
Domestic footwear consumption, 2010 - 2016e
Retail sales of footwear, 2012 - 2017e
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Sport shoes sales increased sharply in 2017,
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.2 Footwear consumption
VND billion
Source: VIRAC, Euromonitor
Source: VIRAC, Euromonitor
Sport shoes retail sales, 2012 - 2017e
Sales of some major sport shoes types, 2017e
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Source: VIRAC, Lefaso
Consumer structure by shoe spending per month, 2013
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.2 Footwear consumption
Source: VIRAC
Consumption struction by value, 2017e
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Vietnam China
Competitive comparison between Vietnamese and Chinese products
Source: VIRAC
Source: VIRAC, VITIC
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.2 Footwear consumption
Footwear consumption structure, 2014
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Footwear consumption segments in Vietnam
Source: VIRAC
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.2 Footwear consumption
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Consumption trends:
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.2 Footwear consumption
Brand 2014 2015 2016 2017
Source: VIRAC, Euromonitor
Market share of shoes brands in Vietnam, 2014 - 2017
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Footwear exports, 2012 – 3M/2018e
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.3 Footwear export
USD million
Source: VIRAC, GDVC
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3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.3 Footwear export
USD million
Source: VIRAC, GDVC
Footwear exports by country, 3M/2017 - 3M/2018e
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No. FDI Vietnam
Source: VIRAC, GDVC
Typical footwear exporting enterprises, 2017Contribution structure of enterprises in
leather - footwear export, 2012 – 3M/2018e
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.3 Footwear export
Source: VIRAC, Lefaso
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2012 2013 2014 2015 2016 2017
Top major importing markets of the US, 2012 - 2017
Source: VIRAC, UN Comtrade, Trademap
Unit: USD million
2012 2013 2014 2015 2016 2017
Top major importing markets of EU-28, 2012 - 2017
Source: VIRAC, Eurostat
Unit: EUR million
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.3 Footwear export
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Source: VIRAC, Lefaso
Export value by HS codeUnit: USD million
Source: VIRAC, Lefaso
Export price by HS code in some countriesUnit: USD
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.3 Footwear export
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Source: VIRAC, UN Comtrade
Source: VIRAC, UN Comtrade
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.4 Footwear import
Footwear imports, 2010 – 2016e
USD million
Footwear import structure by country, 2016e
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Source: VIRAC, World Footwear
Price of some major footwear types in Vietnam, 2012
Source: VIRAC, World Footwear
3. Overview of Vietnam Leather- Footwear industry
3.4 Footwear industry – 3.4.5 Footwear prices
Average footwear export price, 2014
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
3.2 Industry Scale and Features
3.3 Leather industry
3.4 Footwear industry
3.5 Some other leather products
3.6 Industry planning
3.7 Driving forces for development
Content
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Products are related products: handbag, suitcase, bag
Source: VIRAC, GDVC
Source: VIRAC, GDVC
3. Overview of Vietnam's Leather and Footwear Industry
3.5 Some other leather products
USD Million
Export of bags, suitcases, wallets, etc, 2012 – 3M/2018e
Export structure by enterprise, 2013 – 3M/2018e
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
3.2 Industry Scale and Features
3.3 Leather industry
3.4 Footwear industry
3.5 Some other leather products
3.6 Industry planning
3.7 Driving forces for development
Content
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Development purposes
General purposes of the industry
Source: VIRAC summarized
3. Overview of Vietnam Leather- Footwear industry
3.6 Industry Planning
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Production volume
Source: VIRAC summarized
Strategic products planning
3. Overview of Vietnam Leather- Footwear industry
3.6 Industry Planning
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Investment planning
Material and auxiliary industries development solutions Market solutions
Some solutions implementing the plan
Total investment capital in planning period (VND billion)
3. Overview of Vietnam's Leather and Footwear Industry
3.6 Industry Planning
Source: VIRAC summarized
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3. Overview of Vietnam Leather- Footwear industry
3.1 History of Establishment and Development
3.2 Industry Scale and Features
3.3 Leather industry
3.4 Footwear industry
3.5 Some other leather products
3.6 Industry planning
3.7 Driving forces for development
Content
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Domestic market Export markets
3. Overview of Vietnam Leather- Footwear industry
3.7 Driving forces for development
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Labour cost comparison between some major footwear producer countries (USD/hour)
3. Overview of Vietnam Leather- Footwear industry
3.7 Driving forces for development
Source: VIRAC, Chinaleather
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4. Enterprise Analysis
Content
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Company Information
Pou Yuen Vietnam Co., Ltd
(HCMC)
TaeKwang Vina Industrial
JSC (Dong Nai)
Chang Shin Vietnam Co.,
Ltd (Dong Nai)
Hwa Seung Vina Co., Ltd
(Dong Nai)
10 enterprises having the highest revenue in the leather and footwear industry
4. Enterprise Analysis
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Company Information
Pou Sung Vietnam Co., Ltd
(Dong Nai)
Pou Chen Vietnam Co., Ltd
(Dong Nai)
Thai Binh Footwear
Investment and Production
JSC (Binh Duong)
4. Enterprise Analysis
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Company Information
Dona Standard Vietnam
Footwear Co., Ltd (Dong
Nai)
Ty Xuan Co., Ltd
Samho Footwear Co., Ltd
4. Enterprise Analysis
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4. Enterprise Analysis
VND Trillion
VND trillion
Source: VIRAC
Source: VIRAC
Net revenue, 2015 - 2016
Gross Profit, 2015 - 2016
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4. Enterprise Analysis
VND Trillion
Source: VIRAC
Source: VIRAC
Corporate Income Taxes, 2015 - 2016
Pou Yuen’s profits
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4. Enterprise Analysis
VND billion
Source: VIRAC
Source: VIRAC
VND billion
Selling expenses, 2015 - 2016
General & Administrative expenses, 2015 - 2016
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4. Enterprise Analysis
VND Billion
VND Billion
Source: VIRAC
Source: VIRAC
Self-financing rate, 2015 - 2016
Liabilities,, 2015 - 2016
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4. Enterprise Analysis
Turnovers Inventories days Total assets turnover Average collection period
Other indexes, 2016
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4. Enterprise Analysis
Source: VIRAC
Profit margin, 2015 - 2016
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4. Enterprise Analysis
Source: VIRAC
Solvency, 2015 - 2016
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REPORT DISCLAIMER
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