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China, Vietnam Ceding Ground to Second-Tier Footwear Exporters

U.S. footwear imports increased 27.4 percent in the first six months of the year compared to the first half of 2022 to 1.35 billion pairs, according to new data from the Commerce Department’s Office of Textiles & Apparel (OTEXA).

Top supplier China saw its shipments processed at U.S. ports increase 28.8 percent in the same period to 783.74 million pairs. This was comparatively flat from the prior month but down from a 34.5 percent increase in the first quarter, signaling diversified production among brands and retailers amid continued tariffs on Chinese good and heightened geopolitical tensions.

According to a recent Gartner survey, 95 percent of respondents said they are evaluating or executing changes to their China sourcing and manufacturing strategy, and 55 percent of those already acted on their plans.

“If it’s coming from China, you’re going to have a problem, at least for the next year,” California Fashion Association president Ilse Metchek told attendees at a Sourcing at Magic panel. “Politics be damned, there’s nothing you can do about it. So as for alternatives, now is the time to explore them.”

Footwear imports from No. 2 production spot Vietnam, were up 11.9 percent in the first half from same period in 2021 to 311.73 million pairs, bettering a a decline of 4.5 percent in the first quarter, according to OTEXA.

A new World Bank report said Vietnam’s economic recovery accelerated over the last six months on the back of resilient manufacturing and a robust rebound in services. Gross domestic product growth is forecast to surge to 7.5 percent in 2022 from an estimated 2.6 percent in 2021.

“However, this positive outlook is subject to heightened risks that threaten recovery prospects,” the World Bank said. “Risks include growth slowdown or stagflation in main export markets, further commodity price shocks, continued disruption of global supply chains or the emergence of new Covid-19 variants.  Domestic challenges include continued labor shortages, the risk of higher inflation, and heightened financial sector risks.”

Combined imports from China and Vietnam in the six-month period grabbed a 74 percent U.S. market share, down from an 83.2 percent in the first quarter, as second-tier suppliers gained ground.

Imports from Indonesia rose 47.4 percent in first half comparisons to 99.98 million pairs, while shipments from Cambodia were up 54.1 percent to 43.31 million pairs and import from India increased 53.6 percent to 21.39 million pairs.