Despite all the talk about reshoring from Asia and the approach to consumer markets, there is no indication of such a trend in the data, explains Joana Vaz Teixeira, publisher of World Footwear, an initiative of the Portuguese footwear association Apiccaps, in an interview with the @PublicationsEdm publishing group. [Data fails to show significant reshoring is underway – shoeintellignce.com]
Every year, World Footwear releases a yearbook that provides a comprehensive overview of the global footwear industry. In an interview available on World Footwear’s website, Vaz Teixeira points out that “although China has been losing some market share, what we see is that some Asian countries are increasing, such as Vietnam, Cambodia, Philippines and so on. So, we don’t really see the production moving in great volumes to Europe or the U.S. or near the consumption markets.”
“I think brands like to have that statement,” that they are bringing back production locally, “but we really don’t see that in the numbers when we analyze the figures,” she added.
According to the World Footwear 2022 Yearbook, which covers 2021, global footwear production increased by 8.6 percent, exceeding 22 billion pairs. The report showed that the footwear industry continued to be strongly concentrated in Asia where almost nine out of every 10 pairs of shoes were manufactured, resulting in a share of 88 percent of the world total.
China was the world’s largest footwear producer with a 54.1 percent share, but its share of the world production continued to slowly decrease in favor of other Asian countries, especially Vietnam. Over the last decade, China lost more than 6 percentage points of share, according to the report.
According to recent interviews and data viewed by Shoe Intelligence, Turkey seems to have benefitted from a reshoring from the Far East. While Spain, despite strong demand by brands, is hindered by labor and capacity shortage. Data released by the Italian footwear association, Assocalzaturifici, showed that as of mid-2022, 53 percent of Italian footwear manufacturers still had revenues below those booked in the first half of 2019, the year before the outbreak of Covid-19 in Europe, indicating there is still a lot of slack in the industry despite a recovery after the pandemic. Meanwhile, Brazilian shoe makers have publicly stated that they have enjoyed a move out of Asia due to an increase in maritime freight costs, which has prompted Latin American buyers to source closer to their markets.
In the interview, Vaz Teixeira said that based on data for the first half of 2022 “the picture is very positive” for the footwear industry, as most leading importers and exporters of footwear have registered double-digit growth rates in trade. The U.S., which is the world’s largest footwear market in value, increased imports by about 40 percent in the first part of the year. She noted that even China increased exports despite the disruption caused by its zero-Covid policy, “which is impressive as well.”
“What is probably a concern is when we look into the economy and the signs coming from there,” she warned. She noted that U.S. GDP growth is already in negative territory and that Europe seems to be tracking the world’s largest economy and that “raises concerns about the future and about consumption (of footwear),” she stressed.
“And another reason for concern is inflation” driven by higher prices for energy, raw materials and transport, commented Vaz Teixeira. But so far, there have not been significant price increases in Europe as brands have refrained from passing on additional costs to consumers. However, this is unlikely to last. “So, the expectation is that prices in Europe might increase soon. That already happened in the U.S.,” she added.
“Now companies and brands are concerned about the future and because we have this combination of almost contradictory elements, because we had a very good first semester but at the same time we have inflation, we have the prices increase, interest rates are increasing, we have the fear of recession and there is a lot of uncertainty on how all of these elements are going to work together and so, we don’t really know what is going to be impact in terms of consumption,” she highlighted.
