Brazilian Firms Target China Growth

SÃO PAULO, Brazil — Footwear manufacturers at the Couromoda show, held here Jan. 18-21, said they are eyeing a new export market for 2010: China.

Brazilian producers said the burgeoning Chinese middle class is hungry for new fashion brands starting at $100 or more, a niche market that Chinese producers are not filling.

Abicalçados, the Brazilian footwear producers’ association, plans to send a research team to Hong Kong, Beijing and Shanghai in the coming months to learn more about the market.

“At the same time that China is our enemy [regarding alleged dumping in Brazil], it’s going to be our main client soon,” said Abicalçados spokeswoman Elizabeth Renz.

The main issue Brazilian producers face in breaking into the Chinese market is branding themselves properly, said Stella Si, import partner with American-owned Fortune Footwear and Be Fashion Co. of China.

“The quality, comfort innovations and leather treatments [in Brazil] are incredible, but no one in China knows about this, about how trendy and fashionable these shoes are,” Si said.

 “The Chinese know about Italian shoes, but the quality is comparable here. The Brazilian industry is very underpublicized in China.”

Overall, the U.S. is expected to remain Brazil’s No. 1 export destination in 2010, having imported 28 million pairs in 2009, constituting 22 percent of all Brazilian exports. Argentina is a distant second with 10 percent of Brazil’s exports, while the U.K. comes in third with 5.7 percent.

At home, Brazilian producers are lobbying for the government to extend anti-dumping tariffs on Chinese imports in a bid to keep the industry competitive.

Brazil lost 42,000 jobs in 2008, but gained 30,000 of those jobs back after the government imposed a tariff of $12.47 on every pair of shoes from China beginning in September 2009. The duties expire in March unless the government decides to keep them in place.

“Government support of this [anti-dumping tax] is fundamental to our future,” said Milton Cardoso, president of Brazil’s largest footwear company, Vulcabras/Azaleia, and president of Abicalçados.

Even as overall Brazilian exports fell 22 percent, the domestic market grew 6 percent in 2009.

That was due to an increase in the minimum wage, which helped give millions of Brazilians the disposable income needed to drive the nation’s retail growth. At the same time, unemployment dropped to new lows and historically sky-high interest rates and annual fees on credit cards came down.

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