Vietnam’s footwear industry is under pressure as it continues to face three major problems. The sector is struggling with weak quality standards, a fragile raw material supply chain and a rising flood of counterfeit goods.
At a recent workshop in Ho Chi Minh City on developing the domestic textile and footwear market, Phan Thanh Xuan, Vice President, Vietnam Leather Footwear and Handbag Association (Lefaso), shared worrying insights about the state of the industry.
She pointed out that Vietnam has an annual domestic demand of 200 million pairs of shoes, yet local companies meet only 40% of this need.
The remaining 60% comes from imports, with half of those being cheap Chinese footwear. Vietnamese producers hold some ground in the mid-range category, but the low-end market has almost completely fallen to Chinese imports.
Xuan explained that the domestic market faces a series of paradoxes. Most footwear in Vietnam does not meet clear technical standards. This lack of regulation creates unfair competition where price often outweighs quality.
Another challenge is the weak domestic supply chain. Vietnamese companies find it hard to source raw materials locally, while China’s supply system is strong and well developed.
“The paradox is that we lack the raw materials to make a complete pair of shoes. Sometimes importing finished products from outside is cheaper than producing them domestically. That is what makes us extremely worried”
Phan Thanh Xuan, Vice President, Vietnam Leather Footwear and Handbag Association (Lefaso)
Free trade policies are also making things harder. Vietnam’s free trade deals, especially the ASEAN-China FTA, have removed import taxes on finished footwear. But companies in Vietnam still pay 5 to 10% tax on raw materials brought in from China.
According to Xuan, this imbalance discourages local raw material production and creates unfair competition.
Counterfeit and smuggled goods are the third big issue. Fake products are sold at nearly half the price of genuine ones, drawing many consumers away from authentic Vietnamese products. Online platforms in particular have become a hub for these counterfeit sales.
Nguyen Tri Kien, Director, Minh Tien Handbag Sewing Company, added that many businesses had long focused on exports while ignoring the local market. Today, even those wishing to return face an uphill battle.
“Many traditional handbag-making villages have disappeared because they cannot compete with cheap counterfeit and smuggled products. State management agencies need to address this problem”
Nguyen Tri Kien, Director, Minh Tien Handbag Sewing Company
Vietnam’s footwear industry clearly stands at a crossroads. Unless supply chains strengthen, policies are adjusted and counterfeit goods are controlled, domestic producers will continue losing ground in their own market.
Source – The Investor
