Vietnam Leather and Footwear Comprehensive Report Q3/2016
The global tanning industry is characterized by small and medium – sized family businesses, mainly concentrating in South Korea, Taiwan, China and Indonesia. However, many enterprises are now facing the lack of materials and have to import large amounts of leather materials.
In the past years, the growth rate of global leather consumption is contributed mainly by cow leather, but the increase was not significant, while consuming sheep and goat leather has continuously dropped. In contrast with the decline in consumption in North America and Europe, the demand for rawhide in developing countries tends to rise sharply. The Far East continues to be the largest net importer of cowhide due to the lifting demand for leather products in this region. Meanwhile, Latin America is the biggest cowhide exporter.
The global footwear production reached 24.3 billion pairs in 2014. Contributing the most in this output is China and India, which are two footwear factories of the world due to cheap production cost and high population growth. Asia contributed 53% in the global footwear consumption in 2014, as this is populous area where many emerging markets concentrate.
Footwear production is a key industry of Vietnam. The domestic tanning sector is still facing issues in terms of materials, environment, technology and human resources. Production is still under export processing form with the material supplied from abroad and designed assigned by foreign customers. Therefore, even though the footwear export value is high, reachingg over US$12bn in 2014 but the added value for each item is low. The localization ratio in the leather and footwear sector is merely 50%, which is not enough for satisfying fully the rules of origin in trade agreements that Vietnam has signed.
Being beneficial from the yuan devaluation of China, the footwear production growth rate of Vietnam reached 12% in 2015, after many famous shoe brands switched their orders from China to Vietnam to avoid invesment risks. The major export partners of Vietnam include the US, EU and Japan.
The majority of typical enterprises in the leather and footwear industry of Vietnam is foreign invested ones. Domestic businesses account for very small shares, mainly producing for local demand and processing for orders from abroad. Thai Binh Shoes is the only Vietnamese brand having the revenue of over VND2,000bn, becoming the partner for many famous footwear brands from the US and Europe.
The “Vietnam Leather and Footwear Industry Report Q2/2016” elaborated by Vietnam Industry Research and Consultant Jsc. (VIRAC) draws an all-around picture about the leather and footwear sector in Vietnam, brings to readers a clear insight about the historical and current developingg trends of the industry by categories: materials, production – consumptiom, export – import, price movement and distribution system. Specifically, the report analyzes the economic situation in general and the leather and footwear industry in particular through the latest data updated to Q2/2016, beside the forecasts about the output, scale and expanding trend of the sector in the future. The report also mentions about related products such as leather shoes, bags, suitcase, hat, gloves, etc. It also give detail information about large businesses in the industry such as Pou Yuen, Chang Sin or Thai Binh Shoes through analyzing their financial statements, technology status and market shares in order to position and identify the level of competitiveness among firms in the market.
In the past years, the growth rate of global leather consumption is contributed mainly by cow leather, but the increase was not significant, while consuming sheep and goat leather has continuously dropped. In contrast with the decline in consumption in North America and Europe, the demand for rawhide in developing countries tends to rise sharply. The Far East continues to be the largest net importer of cowhide due to the lifting demand for leather products in this region. Meanwhile, Latin America is the biggest cowhide exporter.
The global footwear production reached 24.3 billion pairs in 2014. Contributing the most in this output is China and India, which are two footwear factories of the world due to cheap production cost and high population growth. Asia contributed 53% in the global footwear consumption in 2014, as this is populous area where many emerging markets concentrate.
Footwear production is a key industry of Vietnam. The domestic tanning sector is still facing issues in terms of materials, environment, technology and human resources. Production is still under export processing form with the material supplied from abroad and designed assigned by foreign customers. Therefore, even though the footwear export value is high, reachingg over US$12bn in 2014 but the added value for each item is low. The localization ratio in the leather and footwear sector is merely 50%, which is not enough for satisfying fully the rules of origin in trade agreements that Vietnam has signed.
Being beneficial from the yuan devaluation of China, the footwear production growth rate of Vietnam reached 12% in 2015, after many famous shoe brands switched their orders from China to Vietnam to avoid invesment risks. The major export partners of Vietnam include the US, EU and Japan.
The majority of typical enterprises in the leather and footwear industry of Vietnam is foreign invested ones. Domestic businesses account for very small shares, mainly producing for local demand and processing for orders from abroad. Thai Binh Shoes is the only Vietnamese brand having the revenue of over VND2,000bn, becoming the partner for many famous footwear brands from the US and Europe.
The “Vietnam Leather and Footwear Industry Report Q2/2016” elaborated by Vietnam Industry Research and Consultant Jsc. (VIRAC) draws an all-around picture about the leather and footwear sector in Vietnam, brings to readers a clear insight about the historical and current developingg trends of the industry by categories: materials, production – consumptiom, export – import, price movement and distribution system. Specifically, the report analyzes the economic situation in general and the leather and footwear industry in particular through the latest data updated to Q2/2016, beside the forecasts about the output, scale and expanding trend of the sector in the future. The report also mentions about related products such as leather shoes, bags, suitcase, hat, gloves, etc. It also give detail information about large businesses in the industry such as Pou Yuen, Chang Sin or Thai Binh Shoes through analyzing their financial statements, technology status and market shares in order to position and identify the level of competitiveness among firms in the market.
EXECUTIVE SUMMARY
1. BUSINESS ENVIRONMENT
1.1. Macroeconomics Situation
Figure 1. GDP growth and CPI, 2010 – 6 months/2016
Figure 2. Monthly CPI Fluctuations, 2014 – 6/2016
Figure 3. Disposable income and household spending, 2008 – 2017f
Figure 4. Average population and growth, 2004 - 2015
Figure 5. Export - Import turnover of Vietnam, 2010 – 6 months/2016
Figure 6. Distribution structure of the Leather – Footwear Industry in the export turnover, Jun 2016
Figure 7. VND/CNY Exchange rates
Figure 8. FDI attraction by sectors in the first 6 months of 2016
Figure 9. Retail sales in Vietnam (billion USD)
Figure 10. The share of modern retail in total retail revenue, 2014
Figure 11. Consumer Confidence Index (Q1/2014 – Q2/2016)
1.2. Legal Barriers
Table 1. Legal documents related to leather quarantine
1.3. Trade Agreements
Figure 12. Footwear export structure of Vietnam, 2014
Table 2. Current leather – footwear import taxes of some countries
Table 3. Tax reduction schedule for footwear products and footwear materials of Vietnam
Table 4. Some regulations of EVFTA and GSP
Table 5. Some regulations of the EU with imported leather – footwear products
2. GLOBAL LEATHER AND FOOTWEAR INDUSTRY OVERVIEW
2.1. The Leather and Footwear Industry Value Chain
2.2. Production Methods
2.3. The Leather Industry
2.3.1. Raw Materials
Figure 13. Number of cow, buffalo, sheep, goat and other animals providing soft leather, 2010 - 2014
Figure 14. Cowhide, buffalo hides, sheepskin and goat skin, 2010 – 2014
2.3.2. Production
Figure 15. Leather production, 2010 – 2014
2.3.3. Consumption
Figure 16. Consumption of leather, 2010 – 2013
Figure 17. Leather consumption structure by products, 2013
2.3.4. Export – Import
Figure 18. Leather export, 2010 – 2014
Figure 19. Leather export, 2010 - 2013
Table 6. Top export – import countries, 2014
2.3.5. Price Movement
Figure 20. Price movement of rawhide in the US, 2011 – 6 months/2016
2.3.6. Some Typical Countries
2.4. The Footwear Industry
2.4.1. Raw Materials
Figure 21. Footwear material import, 2010 – 2014
Figure 22. Top importers of footwear materials
2.4.2. Production
Figure 23. Global footwear production, 2010 – 2015
Table 7. Top 10 footwear producers, 2015
Figure 24. Footwear production structure by region, 2014 – 2015
2.4.3. Consumption
Figure 25. World footwear consumption, 2010 – 2014
Figure 26. Consumption by region, 2015e
Table 8. Top 10 footwear consuming countries, 2014 – 2015
2.4.4. Export – Import
Figure 27. Footwear export, 2010 -2015
Table 9. Top 10 exporters by value, 2015
Figure 28. Import structure by region, 2015
2.4.5. Footwear Price
Figure 29. Global export price of footwear, 2004 – 2015
Figure 30. Footwear CPI in the urban areas, 2011 – 6/2016
2.4.6. Some Typical Countries
2.4.7. Famous Brands
3. VIETNAM LEATHER AND FOOTWEAR INDUSTRY OVERVIEW
3.1. History of Formation and Development
3.2. Industry Scale and Features
Figure 31. Localization ratio by enterprises and sectors (%)
3.3. The Leather Industry
3.3.1. Raw Materials
Figure 32. The number of buffalo, cow, goat and other animals supplying soft leather, 2010 – 2014
Figure 33. Unprocessed hides, 2010 – 2014
3.3.2. Production – Consumption
Figure 34. Leather production value of domestic enterprises, 2010 – 6 months/2016e
3.3.3. Export
Figure 35. Leather export, 2010 – 2015e
Figure 36. Leather export structure by country, 2014
3.3.4. Import
Figure 37. Leather import, 2010 – 2015e
Figure 38. Leather import structure by country, 2014
3.3.5. Inventories
Figure 39. Inventory by leather types, 2010 - 2015e
3.4. The Footwear Industry
3.4.1. Raw Materials
Figure 40. Raw material import, 2010 – 6 months/2016
Table 10. Materials supply capacity, 2015
Figure 41. Raw material import structure, 2015
Figure 42. Raw material export, 2011 – 6 months/2016e
Figure 43. Raw material export, 6 months/2016
3.4.2. Production
Figure 44. Domestic production volume of main products, 2010 – 6 months/2016e
3.4.3. Consumption
Figure 45. Footwear consumption, 2010 - 2015
Figure 46. Consumers structure by spending, 2015
Figure 47. Footwear consumption, 2014
Table 11. Competitive comparison between Vietnamese and Chinese products
Figure 48. Consumption structure by value, 2013
Figure 49. Consumption structure by quantity, 2013
3.4.4. Export
Figure 50. Footwear export, 2010 – 6 months/2016e
Figure 51. Footwear export structure by country, 6 months/2015 – 6 months/2016e
Figure 52. Contribution structure of enterprises in leather - footwear export, 2010 - 2015
Table 12. Top 10 footwear export FDI enterprises, 2015
Table 13. Top major import markets of the EU, 2010 - 2014
Table 14. Top major import markets of the US, 2010 - 2014
Table 15. Export value divided by HS Code, 2010 - 2014
Table 16. Export price by HS Code in some countries, 2014
3.4.5. Import
Figure 53. Footwear import, 2010 – 2015e
Figure 54. Footwear import structure by country, 2014
3.4.6. Footwear Price
Figure 55. Footwear average export price, 2014
Table 17. Price of some major footwear types, 2012
3.4.7. Inventories
Figure 56. Inventories, 2009 – 6 months/2016e
3.4.8. Distribution Channels
3.5. Some Other Leather Products
Figure 57. Suitcase, bag, wallet export, 2010 – 6 months/2016
Figure 58. Export structure by enterprise, 2013 – 2015
3.6. Machinery/Technology
Figure 59. Machinery import, 2010 – 2014
Figure 60. Machinery import structure by country, 2014
Table 18. Tanning technology in Vietnam
Table 19. Tanning technology in Europe
3.7. Risks and Challenges
3.8. Industry Planning
Table 20. Products output
Figure 61. Products output growth rate, 2011 - 2020
Figure 62. Total investment capital, 2011 – 2020
3.9. Driving Forces and Forecasts
Figure 63. Labour cost comparison between some major footwear producer countries
Figure 64. Global footwear consumption forecast, 2015e - 2020f
Figure 65. Footwear sector scale forecast, 2010 – 2020f
4. ENTERPRISE ANALYSIS
Table 21. 10 enterprises having the highest revenue in the leather and footwear industry
Figure 66. Net Revenue, 2014 - 2015
Figure 67. Gross Profit, 2014 - 2015
Figure 68. Taxes, 2014 - 2015
Figure 69. Pou Yuen’s profits
Figure 70. Sales cost, 2014 - 2015
Figure 71. Business Management Cost, 2014 - 2015
Figure 72. Assets, 2014 - 2015
Figure 73. Liabilities, 2014 - 2015
Table 22. Cash turnover, 2015
Figure 74. Profitability indicators, 2014 – 2015
Appendix
1. BUSINESS ENVIRONMENT
1.1. Macroeconomics Situation
Figure 1. GDP growth and CPI, 2010 – 6 months/2016
Figure 2. Monthly CPI Fluctuations, 2014 – 6/2016
Figure 3. Disposable income and household spending, 2008 – 2017f
Figure 4. Average population and growth, 2004 - 2015
Figure 5. Export - Import turnover of Vietnam, 2010 – 6 months/2016
Figure 6. Distribution structure of the Leather – Footwear Industry in the export turnover, Jun 2016
Figure 7. VND/CNY Exchange rates
Figure 8. FDI attraction by sectors in the first 6 months of 2016
Figure 9. Retail sales in Vietnam (billion USD)
Figure 10. The share of modern retail in total retail revenue, 2014
Figure 11. Consumer Confidence Index (Q1/2014 – Q2/2016)
1.2. Legal Barriers
Table 1. Legal documents related to leather quarantine
1.3. Trade Agreements
Figure 12. Footwear export structure of Vietnam, 2014
Table 2. Current leather – footwear import taxes of some countries
Table 3. Tax reduction schedule for footwear products and footwear materials of Vietnam
Table 4. Some regulations of EVFTA and GSP
Table 5. Some regulations of the EU with imported leather – footwear products
2. GLOBAL LEATHER AND FOOTWEAR INDUSTRY OVERVIEW
2.1. The Leather and Footwear Industry Value Chain
2.2. Production Methods
2.3. The Leather Industry
2.3.1. Raw Materials
Figure 13. Number of cow, buffalo, sheep, goat and other animals providing soft leather, 2010 - 2014
Figure 14. Cowhide, buffalo hides, sheepskin and goat skin, 2010 – 2014
2.3.2. Production
Figure 15. Leather production, 2010 – 2014
2.3.3. Consumption
Figure 16. Consumption of leather, 2010 – 2013
Figure 17. Leather consumption structure by products, 2013
2.3.4. Export – Import
Figure 18. Leather export, 2010 – 2014
Figure 19. Leather export, 2010 - 2013
Table 6. Top export – import countries, 2014
2.3.5. Price Movement
Figure 20. Price movement of rawhide in the US, 2011 – 6 months/2016
2.3.6. Some Typical Countries
2.4. The Footwear Industry
2.4.1. Raw Materials
Figure 21. Footwear material import, 2010 – 2014
Figure 22. Top importers of footwear materials
2.4.2. Production
Figure 23. Global footwear production, 2010 – 2015
Table 7. Top 10 footwear producers, 2015
Figure 24. Footwear production structure by region, 2014 – 2015
2.4.3. Consumption
Figure 25. World footwear consumption, 2010 – 2014
Figure 26. Consumption by region, 2015e
Table 8. Top 10 footwear consuming countries, 2014 – 2015
2.4.4. Export – Import
Figure 27. Footwear export, 2010 -2015
Table 9. Top 10 exporters by value, 2015
Figure 28. Import structure by region, 2015
2.4.5. Footwear Price
Figure 29. Global export price of footwear, 2004 – 2015
Figure 30. Footwear CPI in the urban areas, 2011 – 6/2016
2.4.6. Some Typical Countries
2.4.7. Famous Brands
3. VIETNAM LEATHER AND FOOTWEAR INDUSTRY OVERVIEW
3.1. History of Formation and Development
3.2. Industry Scale and Features
Figure 31. Localization ratio by enterprises and sectors (%)
3.3. The Leather Industry
3.3.1. Raw Materials
Figure 32. The number of buffalo, cow, goat and other animals supplying soft leather, 2010 – 2014
Figure 33. Unprocessed hides, 2010 – 2014
3.3.2. Production – Consumption
Figure 34. Leather production value of domestic enterprises, 2010 – 6 months/2016e
3.3.3. Export
Figure 35. Leather export, 2010 – 2015e
Figure 36. Leather export structure by country, 2014
3.3.4. Import
Figure 37. Leather import, 2010 – 2015e
Figure 38. Leather import structure by country, 2014
3.3.5. Inventories
Figure 39. Inventory by leather types, 2010 - 2015e
3.4. The Footwear Industry
3.4.1. Raw Materials
Figure 40. Raw material import, 2010 – 6 months/2016
Table 10. Materials supply capacity, 2015
Figure 41. Raw material import structure, 2015
Figure 42. Raw material export, 2011 – 6 months/2016e
Figure 43. Raw material export, 6 months/2016
3.4.2. Production
Figure 44. Domestic production volume of main products, 2010 – 6 months/2016e
3.4.3. Consumption
Figure 45. Footwear consumption, 2010 - 2015
Figure 46. Consumers structure by spending, 2015
Figure 47. Footwear consumption, 2014
Table 11. Competitive comparison between Vietnamese and Chinese products
Figure 48. Consumption structure by value, 2013
Figure 49. Consumption structure by quantity, 2013
3.4.4. Export
Figure 50. Footwear export, 2010 – 6 months/2016e
Figure 51. Footwear export structure by country, 6 months/2015 – 6 months/2016e
Figure 52. Contribution structure of enterprises in leather - footwear export, 2010 - 2015
Table 12. Top 10 footwear export FDI enterprises, 2015
Table 13. Top major import markets of the EU, 2010 - 2014
Table 14. Top major import markets of the US, 2010 - 2014
Table 15. Export value divided by HS Code, 2010 - 2014
Table 16. Export price by HS Code in some countries, 2014
3.4.5. Import
Figure 53. Footwear import, 2010 – 2015e
Figure 54. Footwear import structure by country, 2014
3.4.6. Footwear Price
Figure 55. Footwear average export price, 2014
Table 17. Price of some major footwear types, 2012
3.4.7. Inventories
Figure 56. Inventories, 2009 – 6 months/2016e
3.4.8. Distribution Channels
3.5. Some Other Leather Products
Figure 57. Suitcase, bag, wallet export, 2010 – 6 months/2016
Figure 58. Export structure by enterprise, 2013 – 2015
3.6. Machinery/Technology
Figure 59. Machinery import, 2010 – 2014
Figure 60. Machinery import structure by country, 2014
Table 18. Tanning technology in Vietnam
Table 19. Tanning technology in Europe
3.7. Risks and Challenges
3.8. Industry Planning
Table 20. Products output
Figure 61. Products output growth rate, 2011 - 2020
Figure 62. Total investment capital, 2011 – 2020
3.9. Driving Forces and Forecasts
Figure 63. Labour cost comparison between some major footwear producer countries
Figure 64. Global footwear consumption forecast, 2015e - 2020f
Figure 65. Footwear sector scale forecast, 2010 – 2020f
4. ENTERPRISE ANALYSIS
Table 21. 10 enterprises having the highest revenue in the leather and footwear industry
Figure 66. Net Revenue, 2014 - 2015
Figure 67. Gross Profit, 2014 - 2015
Figure 68. Taxes, 2014 - 2015
Figure 69. Pou Yuen’s profits
Figure 70. Sales cost, 2014 - 2015
Figure 71. Business Management Cost, 2014 - 2015
Figure 72. Assets, 2014 - 2015
Figure 73. Liabilities, 2014 - 2015
Table 22. Cash turnover, 2015
Figure 74. Profitability indicators, 2014 – 2015
Appendix