Viet Nam’s garment-textile and footwear sectors have endured the brunt of COVID-19 and firms may take a long time to recover, experts said.

Businesses in the leather and footwear industry await the ratification of the EVFTA to cash in on the enormous tax incentives coming with the landmark deal.

Up to 93 percent of the businesses from the Republic of Korea (RoK) are satisfied with their investments in Vietnam, according to a recent survey conducted by the Korea Trade and Investment Promotion Agency (KOTRA).

Vietnam enjoyed a trade surplus of close to US$11 billion during the first 11 months of the year, with roughly US$1.45 billion being recorded during November, according to the latest statistics released by the General Department of Vietnam Customs.

Japan, Malaysia, Singapore, Australia, New Zealand and Chile are countries that Viet Nam has bilateral or multilateral FTAs with.

Nearly 100 percent of materials needed to make textile and garment products must be imported, limiting Vietnam’s to take full advantage of preferential tariffs in FTAs.

 Exports of footwear, suitcases and bags of all kinds are estimated at 19.5 billion USD in 2018, according to the Vietnam Leather, Footwear and Handbag Association (LEFASO).

VietNamNet Bridge - Adidas’ tendency of relocating production bases to places near major markets is expected to have adverse effects on Vietnam’s footwear industry.

VietNamNet Bridge - Though only around 10 Vietnamese footwear brands exist in the home market and each holds a modest 2 percent of market share, the products have begun conquering the local consumer market.

VietNamNet Bridge - After five years of implementing a master plan on the footwear industry by 2020, Vietnam still mostly does outsourcing for foreign partners. 

 A footwear and leather export promotion conference, themed “Increasing business and export capacity for Vietnamese footwear and leather enterprises,” will be organised on March 15 in HCM City.

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.

Robots, despite being cheaper and more productive, will not immediately shift manufacturing away from countries abundant with inexpensive and low-skilled labour, such as Vietnam.

VietNamNet Bridge - Vietnam is a big footwear exporter, but many Vietnamese do not wear domestically made shoes.

VietNamNet Bridge - Foreign invested enterprises (FIEs) account for less than 25 percent of total number of footwear enterprises, but make up 77 percent of total export value. 

 VietNamNet Bridge – Viet Nam is now the third largest exporter of footwear in the world, and it can increase its exports further by using opportunities provided by free trade agreements.

Within three years, foreign direct investment capital has soared from $0.5 billion to $2 billions, with a number of foreign companies relocating their factories to Vietnam.

 VietNamNet Bridge – Sales to the US market is the aim of the Trans Pacific Partnership (TPP) agreement as Vietnam has already signed bilateral or multilateral free trade pacts with most of the other parties involved in the negotiations.

 VietNamNet Bridge – Deputy Prime Minister Vu Van Ninh recently returned from a visit to the US, where he headed up a Vietnamese delegation lobbying for an early signing of the Trans-Pacific Partnership Agreement.