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Sourcing Footwear: China’s Loss is Vietnam’s Gain

Footwear’s rising duties and increasing production costs have directly impacted consumers at the register, but it hasn’t stopped Americans from snapping up 2.3 billion pairs of shoes–or 7.32 pairs for each person in the U.S.–that were imported into the country in 2013, according to the Footwear Distributors and Retailers of America’s (FDRA) annual Global Footwear Sourcing Assessment released last week.

With 99 percent of footwear sold in the U.S. originating overseas, the report confirmed that footwear is a truly global enterprise, however, the map is changing. In 2013, China exported approximately 1.89 billion pairs of shoes, or over 81 percent of all U.S. footwear imports. However, its share is on the decline as the country sheds it footwear production for more high-tech industries.

Vietnam, which in the past has been considered a questionable sourcing country due to its lack of capacity, has proved itself as a viable alternative to China. The FDRA reported that Vietnam gained the most share of China’s production in 2013 and continues to produce more and more footwear for U.S. consumers. In total, Vietnam footwear exports grew 20 percent over 2013 and now account for 10 percent of all U.S. footwear. That number is expected to grow once the ongoing Trans-Pacific Partnership (TPP) free trade agreement negotiations are completed.

Other emerging markets include Cambodia and Ethiopia, which increased their imports 60 percent and 140 percent respectively. While the lack of infrastructure and low capacity in the two countries raise concern for major U.S. companies, they have become niche for brands looking for specific products like leather.

Looking ahead to 2018, the FDRA still sees China producing the majority of all footwear sold in the U.S.–at least 70 percent–but it expects more countries who have been producing exclusively in China for decades to expand into other areas of Southeast Asia And Africa. Even the Americas are a possibility as the appeal of 3D technology and customization grows.

Ultimately, the report concludes that the American footwear industry, “with all of its brands, retailers, merchants, importers, distributors, and marketers, will do what it does best–address sourcing challenges and drive global change through the ongoing development of its supply chain, the exportation of best corporate social responsibly practices, and the constant design of innovative and fashionable footwear for consumers all over the world, thus mapping its own course one factory, one country, one consumer at a time.”