Vietnam Leather and Footwear Standard 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
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 12. Number of cow, buffalo, sheep, goat and other animals providing soft leather, 2010 - 2014
Figure 13. Cowhide, buffalo hides, sheepskin and goat skin, 2010 – 2014
2.3.2. Production
Figure 14. Leather production, 2010 – 2014
2.3.3. Consumption
Figure 15. Consumption of leather, 2010 – 2013
Figure 16. Leather consumption structure by products, 2013
2.4. The Footwear Industry
2.4.1. Raw Materials
Figure 17. Footwear material import, 2010 – 2014
Figure 18. Top importers of footwear materials
2.4.2. Production
Figure 19. Global footwear production, 2010 – 2015
Table 7. Top 10 footwear producers, 2015
Figure 20. Footwear production structure by region, 2014 – 2015
2.4.3. Consumption
Figure 21. World footwear consumption, 2010 – 2014
Figure 22. Consumption by region, 2015e
Table 8. Top 10 footwear consuming countries, 2014 – 2015
3. VIETNAM LEATHER AND FOOTWEAR INDUSTRY OVERVIEW
3.1. History of Formation and Development
3.2. Industry Scale and Features
Figure 23. Localization ratio by enterprises and sectors (%)
3.3. The Leather Industry
3.3.1. Raw Materials
Figure 24. The number of buffalo, cow, goat and other animals supplying soft leather, 2010 – 2014
Figure 25. Unprocessed hides, 2010 – 2014
3.3.2. Production – Consumption
Figure 26. Leather production value of domestic enterprises, 2010 – 6 months/2016e
3.3.3. Export
Figure 27. Leather export, 2010 – 2015e
Figure 28. Leather export structure by country, 2014
3.3.4. Import
Figure 29. Leather import, 2010 – 2015e
Figure 30. Leather import structure by country, 2014
3.4. The Footwear Industry
3.4.1. Raw Materials
Figure 31. Raw material import, 2010 – 6 months/2016
Table 10. Materials supply capacity, 2015
Figure 32. Raw material import structure, 2015
Figure 33. Raw material export, 2011 – 6 months/2016e
Figure 34. Raw material export, 6 months/2016
3.4.2. Production
Figure 35. Domestic production volume of main products, 2010 – 6 months/2016e
3.4.3. Consumption
Figure 36. Footwear consumption, 2010 - 2015
Figure 37. Consumers structure by spending, 2015
Figure 38. Footwear consumption, 2014
Table 11. Competitive comparison between Vietnamese and Chinese products
Figure 39. Consumption structure by value, 2013
Figure 40. Consumption structure by quantity, 2013
3.4.4. Export
Figure 41. Footwear export, 2010 – 6 months/2016e
Figure 42. Footwear export structure by country, 6 months/2015 – 6 months/2016e
Figure 43. 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 44. Footwear import, 2010 – 2015e
Figure 45. Footwear import structure by country, 2014
3.5. Some Other Leather Products
Figure 46. Suitcase, bag, wallet export, 2010 – 6 months/2016
Figure 47. Export structure by enterprise, 2013 – 2015
3.6. Industry Planning
Table 12. Products output
Figure 48. Products output growth rate, 2011 - 2020
Figure 49. Total investment capital, 2011 – 2020
3.7. Driving Forces
Figure 50. Labour cost comparison between some major footwear producer countries
4. ENTERPRISE ANALYSIS
Table 13. 10 enterprises having the highest revenue in the leather and footwear industry
Figure 51. Net Revenue, 2014 - 2015
Figure 52. Gross Profit, 2014 - 2015
Figure 53. Taxes, 2014 - 2015
Figure 54. Pou Yuen’s profits
Figure 55. Sales cost, 2014 - 2015
Figure 56. Business Management Cost, 2014 - 2015
Figure 57. Assets, 2014 - 2015
Figure 58. Liabilities, 2014 - 2015
Table 14. Cash turnover, 2015
Figure 59. Profitability indicators, 2014 – 2015
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
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 12. Number of cow, buffalo, sheep, goat and other animals providing soft leather, 2010 - 2014
Figure 13. Cowhide, buffalo hides, sheepskin and goat skin, 2010 – 2014
2.3.2. Production
Figure 14. Leather production, 2010 – 2014
2.3.3. Consumption
Figure 15. Consumption of leather, 2010 – 2013
Figure 16. Leather consumption structure by products, 2013
2.4. The Footwear Industry
2.4.1. Raw Materials
Figure 17. Footwear material import, 2010 – 2014
Figure 18. Top importers of footwear materials
2.4.2. Production
Figure 19. Global footwear production, 2010 – 2015
Table 7. Top 10 footwear producers, 2015
Figure 20. Footwear production structure by region, 2014 – 2015
2.4.3. Consumption
Figure 21. World footwear consumption, 2010 – 2014
Figure 22. Consumption by region, 2015e
Table 8. Top 10 footwear consuming countries, 2014 – 2015
3. VIETNAM LEATHER AND FOOTWEAR INDUSTRY OVERVIEW
3.1. History of Formation and Development
3.2. Industry Scale and Features
Figure 23. Localization ratio by enterprises and sectors (%)
3.3. The Leather Industry
3.3.1. Raw Materials
Figure 24. The number of buffalo, cow, goat and other animals supplying soft leather, 2010 – 2014
Figure 25. Unprocessed hides, 2010 – 2014
3.3.2. Production – Consumption
Figure 26. Leather production value of domestic enterprises, 2010 – 6 months/2016e
3.3.3. Export
Figure 27. Leather export, 2010 – 2015e
Figure 28. Leather export structure by country, 2014
3.3.4. Import
Figure 29. Leather import, 2010 – 2015e
Figure 30. Leather import structure by country, 2014
3.4. The Footwear Industry
3.4.1. Raw Materials
Figure 31. Raw material import, 2010 – 6 months/2016
Table 10. Materials supply capacity, 2015
Figure 32. Raw material import structure, 2015
Figure 33. Raw material export, 2011 – 6 months/2016e
Figure 34. Raw material export, 6 months/2016
3.4.2. Production
Figure 35. Domestic production volume of main products, 2010 – 6 months/2016e
3.4.3. Consumption
Figure 36. Footwear consumption, 2010 - 2015
Figure 37. Consumers structure by spending, 2015
Figure 38. Footwear consumption, 2014
Table 11. Competitive comparison between Vietnamese and Chinese products
Figure 39. Consumption structure by value, 2013
Figure 40. Consumption structure by quantity, 2013
3.4.4. Export
Figure 41. Footwear export, 2010 – 6 months/2016e
Figure 42. Footwear export structure by country, 6 months/2015 – 6 months/2016e
Figure 43. 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 44. Footwear import, 2010 – 2015e
Figure 45. Footwear import structure by country, 2014
3.5. Some Other Leather Products
Figure 46. Suitcase, bag, wallet export, 2010 – 6 months/2016
Figure 47. Export structure by enterprise, 2013 – 2015
3.6. Industry Planning
Table 12. Products output
Figure 48. Products output growth rate, 2011 - 2020
Figure 49. Total investment capital, 2011 – 2020
3.7. Driving Forces
Figure 50. Labour cost comparison between some major footwear producer countries
4. ENTERPRISE ANALYSIS
Table 13. 10 enterprises having the highest revenue in the leather and footwear industry
Figure 51. Net Revenue, 2014 - 2015
Figure 52. Gross Profit, 2014 - 2015
Figure 53. Taxes, 2014 - 2015
Figure 54. Pou Yuen’s profits
Figure 55. Sales cost, 2014 - 2015
Figure 56. Business Management Cost, 2014 - 2015
Figure 57. Assets, 2014 - 2015
Figure 58. Liabilities, 2014 - 2015
Table 14. Cash turnover, 2015
Figure 59. Profitability indicators, 2014 – 2015
