The Vietnam Leather, Footwear, and Handbag Association (LEFASO) has set an ambitious target for the sector’s export revenue, projecting it to reach between $26 billion and $27 billion in 2024. This optimistic forecast comes from the sector’s strong performance in the first half of the year.
In the initial six months of 2024, the sector’s exports surged past $6.5 billion, marking a 5.7% increase compared to the same period last year. This growth is a testament to Vietnam’s strategic focus on its major markets, which include the United States, the European Union, Japan, the Republic of Korea, and China, according to LEFASO’s Vice President and General Secretary, Phan Thị Thanh Xuân.
Xuân emphasized that while maintaining a foothold in traditional markets is crucial, Vietnam’s leather and footwear industry is also actively seeking to penetrate new markets, particularly those with which Vietnam has free trade agreements (FTAs). This strategic expansion is poised to bolster the sector’s global reach and competitiveness.
Experts highlight that Vietnam’s extensive network of FTAs, covering 60% of global trade volume, provides a significant competitive advantage. The country’s large-scale leather and footwear industry boasts over 1,000 factories and employs approximately 1.5 million workers, contributing around 8% to the national GDP. This robust infrastructure makes the sector highly appealing to foreign investors, attracted by the abundant and cost-effective labor force.
However, Xuân cautioned that the sector faces increasing challenges due to stringent standards for green and sustainable development, as well as traceability requirements in major markets. These evolving standards necessitate substantial investments in technology and financial resources to ensure compliance and maintain market access.
To navigate these challenges and capitalize on growth opportunities, Xuân advised firms within the leather and footwear sector to maximize the benefits offered by FTAs. Specifically, the EU-Vietnam FTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) present significant opportunities for boosting exports.
In conclusion, as Vietnam’s leather, footwear, and handbag sector aims for $27 billion in export revenue by 2024, its focus on major markets, strategic expansion into new regions, and utilization of FTAs will be crucial. The sector’s robust infrastructure and competitive advantages position it well, but adapting to stricter sustainability standards will be essential for future success. By leveraging FTAs and investing in technological advancements, Vietnam’s leather and footwear industry is set for significant growth in the global market.
