Where to Import Shoes? China again?

Date: December 11, 2014

Where to Import Shoes? China again?

The ideal Footwear Supplier: Footwear Sourcing on the Global Stage

The footwear industry in the US is big money, with consumers spending over US$29 billion last year in shoe stores alone.  However, with a lack of competitively priced footwear products being made in the US in sufficient quantities, it is no wonder that 99% of shoe stock is imported and companies are constantly on the lookout for a trusted footwear supplier.  So what are the main options when importing shoes from other countries?

The most obvious choice would be China, and indeed China is the biggest footwear supplier to the US by a long way. According to a report published by the Footwear Distributors and Retailers of America (FDRA), China was responsible for 81% of footwear imported into the US in 2013.  The low costs in labor, materials, and taxation in China have contributed to creating a footwear-manufacturing superpower that few other countries can compete with. The FDRA noted that the unit cost for shoes from China averages only $9 a pair. 

Another important factor which helps China maintain its status as the biggest footwear supplier is its consistent quality in shoe manufacturing. China, as the shoe sourcing origin and manufacturing giant, has accumulated solid experience and mastered the necessary production skills over the past few decades. High skill levels and expertise help China shoe factories to outwit other competitors in Southeast Asia or South America.

However, changes in the landscape have emerged in recent years.

According to the FDRA report, Vietnam is the second-largest shoe-sourcing destination. Some 600 million pairs of shoes were exported in 2012. With a workforce of around 720,000 but an hourly wage just half of that in China, it is easy to see why Vietnam is becoming the new favorite among buyers looking for a more affordable alternative. Although the country may still be far behind China in terms of output volume, the current negotiations for a Trans-Pacific Partnership and its commitment to abolishing or reducing trade tariffs will likely result in a significant expansion in the country's footwear sourcing and its export market.

Indonesia is one of the largest economies in Southeast Asia, and is of growing importance for footwear sourcing. Giant sportswear brands have opted to move production there in recent years, turning the country into the second-largest exporter of athletic shoes in the world (after Vietnam). FDRA recorded a huge jump of 33% in shoe exports from Indonesia in the first half of 2013.

Brazil is yet another viable option.  It is the world's tenth-largest economy and the most prominent producer of footwear outside Asia, with a 4.4% global market share. It has a reputation for producing high-quality shoes, given the country’s sound industrial base and relatively robust regulatory framework. The roughly 8,000 shoe manufacturers in Brazil have made it one of the top exporters within the high-end international shoe market for items such as Havaianas. 

Similarly, Mexico is another emerging shoe-manufacturing country and is well known for producing women's leather shoes and boots. Mexico has an abundance of local shoemakers, all making their own diverse range of products. This plethora of innovative footwear may be due to the large population and the country’s reluctance to import shoes from Chinese suppliers.  Their promising high-quality footwear products, along with Mexico’s geographical advantage and its current edge within the tariff-related wars, has made it a tempting option when importing shoes from abroad. Just under 19 million pairs of shoes were sent to the US in 2012.

The last but not least, India is also a favorite sourcing location for the US. Its low labor costs (average hourly wage around US$0.85), a weak currency, and a huge workforce drawn from its population of 1.2 billion people are only a few among other benefits of trading with this country. Footwear production is centered on good-quality leather and hand-sewn shoes, especially for high-end brands such as Cole Haan. Although its contribution is significantly smaller than that of China or Vietnam, it has seen steady growth over the years: it doubled its footwear exports between 2002 and 2012, from 6.6 million to 13.5 million pairs.

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