The Vietnam Leather, Footwear, and Handbag Association (Lefaso) reports that Vietnam’s leather and footwear sector is thriving by leveraging Free Trade Agreements (FTAs). These agreements have unlocked new opportunities, enabling the country to enhance its export capabilities and strengthen its position in global markets.
Ms. Phan Thi Thanh Xuan, Vice President and General Secretary of Lefaso, highlighted Vietnam’s global standing in the industry. The country ranks 3rd worldwide in production after China and India and secures the second spot in footwear exports.
Vietnam’s leather and footwear industry is projected to earn $26-27 billion in export revenues this year, marking a $3-billion increase YoY.
The leather and footwear industry remains focused on key export markets, which account for 97.3% of total turnover. Here’s how the markets break down:
- North America leads the way, contributing 41.4% of footwear exports and 47% of handbag exports.
- The European Union (EU) follows, with 29.5% in footwear and 25.4% in handbags.
- Asia accounts for 22.2% of footwear and 24.5% of handbag exports.
In total, exports to the 16 largest markets—including the US, China, Japan, and Germany—make up 88.4% of the industry’s turnover.
While the industry is expanding, challenges loom. Major importers like the EU are introducing stricter standards. These include:
- Sustainability requirements in production, emphasizing eco-friendly designs.
- Supply chain transparency, with clear documentation of the production process, especially when raw materials are imported.
Starting in the second quarter of 2024, the EU has implemented policies requiring ecological design and traceability. These changes could significantly affect Vietnam’s leather and footwear businesses.
Despite the hurdles, the industry’s exports are showing signs of recovery. Large businesses have already secured contracts extending into mid-2025.
Experts believe that the sector will rebound strongly from late 2023, aided by strategic shifts in production and market focus.
To sustain this momentum, Vietnam must invest in its supporting industries. This involves enhancing the domestic production of raw materials such as leather, technical fabrics, molds, and soles. These efforts can facilitate environmental protection and more efficient production.
The Vietnam Leather, Footwear, and Handbag Association has suggested developing industrial zones dedicated to producing specialized components for the sector. Centralized production can reduce costs and align with global sustainability goals.
