Vietnamese footwear manufacturers ignore local market

VietNamNet Bridge – The majority of Vietnamese footwear companies make products for export and do not focus on the domestic market, where consumers often prefer foreign-made products.

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Doan Ngoc Hieu, managing director of Leedo, confirmed that foreign countries were the target markets for most companies. Very few companies try to exploit the domestic market because they think big Vietnamese footwear manufacturers such as Asia and Biti’s hold much of the market share.

However, there is still large room for Vietnamese manufacturers in the home market, as there is high demand for footwear makers.

Hieu noted that the majority of Vietnamese footwear companies are household-run ones which follow old management ways. However, the companies need new management technologies to do business more effectively.

The majority of Vietnamese footwear companies make products for export and do not focus on the domestic market, where consumers often prefer foreign-made products.

Doan Ngoc Hai, the father of Hieu, established Le Doan Company in 1990, the predecessor of Leedo. By the end of 2015, Leedo had 300 workers and two workshops, one in Long An province and the other in Binh Chanh district of HCMC.

Leedo provides 40 percent of PU soles in HCM City, churning out 4 million soles and 1 million pairs of footwear products a year.

Hieu noted that with the old management method, companies didn’t pay much importance to marketing or sales. They just focused on wholesaling, supplying products to wholesalers at markets.

However, he believes that companies need to change, because it is now the digital era, when Facebook and internet are popular.

Hieu and his father argue about whether to bring Leedo’s products to international trade fairs to promote the brand. He also thinks that it is necessary to spend money on ISO and other certificates.

“One cannot go far in the world market if he does not have certificates,” he commented, adding that footwear companies need to reform management to catch up with the times.

According to the Taiwan Footwear Manufacturers Association, Vietnam’s footwear exports will increase by 20 percent this year thanks to free trade agreements, including TPP.

Its shoe and handbag exports increased by 16 percent in 2015 with turnover of $15 billion in 2015, including $12 billion from footwear and $3 billion from handbags.

Vietnam is the world’s third-largest shoe manufacturer, after China and India, and is the third largest exporter, after China and Italy.

Vietnam expects a 20 percent growth rate in footwear exports in 2016 due to a number of new free trade agreements including the Transpacific Partnership (TPP).