The second-largest footwear exporter in the world has been bleeding Western market share over the past 12 months.
Accounting for 10 percent of global footwear exports, Vietnam’s shoe production sector saw its overall export volumes drop by more than 15 percent in 2023 to about $20.2 billion, according to data from the General Department of Vietnam Customs. Exports to the U.S. between January and November fell nearly 28 percent to $6.5 billion, while exports to Europe contracted by over 9 percent to $4.5 billion.
While U.S. and EU sales have stalled, exports to China grew by more than 11 percent to $1.71 billion, and other Asian markets increased their imports from Vietnam by almost 27 percent to $497 million.
Vietnam ships shoes to about 150 international markets. The U.S., the EU, the UK, China and Japan represent the country’s biggest buyers. According to local news group Vietnam Net Global, the Vietnamese footwear sector has recently been advised to strengthen its domestic value chain for leather and footwear in order to maintain its positioning as a shoe sourcing superpower. Some manufacturers reported seeing orders decrease by 25 to 50 percent last year, forcing them to slow production and lay off workers, the outlet said.
Despite the draw down on exports, the U.S. remained the country’s largest footwear buyer in 2023, spending over $7.1 billion on shoes from Vietnam. China took the No. 2 spot, importing $1.8 billion-worth of footwear, and Belgium came in third, spending over $1.2 billion.
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“The value of Vietnamese footwear exports to the U.S., Europe, India, and Australia were down significantly in 2023, while up to China and the ASEAN region,” Footwear Distributors and Retailers of America (FDRA) chief economist Gary Raines confirmed.
According to Raines, the pull-back in spending by American retailers and brands isn’t a reflection of Vietnam’s footwear production capabilities. “In fact, both the value and volume of U.S. footwear imports were lower in 2023 from all 14 largest origins, suggesting a demand-side culprit,” he explained. “Importers just pulled back on buying.” China, too, saw overall exports shrink by 4.6 percent to $3.4 trillion in 2023, representing the first decline in dollar terms in seven years.
Vietnam’s export volume and value shares of total U.S. footwear imports grew sharply each of the last several years before peaking in 2020. “These shares have drifted a bit below these levels since,” he acknowledged—but Vietnam has been, and will likely remain, “a consistent source of footwear for the Western market.”
“I don’t think the direct factor weighing on Vietnamese exports is U.S. and EU inflation per se, but a combination of belt-tightening in response to inflation and a glut of footwear inventories in the U.S. and EU that prompted importers to curtail orders,” Raines added. “We’re seeing inflation moderate and these inventories wane, suggesting U.S. footwear imports may rebound in 2024.”