Vietnam is stepping up its footwear exports as it makes a play to capture some of the business once dominated by China.
Vietnam exported nearly $11.8 billion worth of footwear between January and September of this year, a 10.5 percent increase over last year’s total, said its Ministry of Industry and Trade on Tuesday. It ranks second after China among the U.S.’s biggest sources of footwear, exporting 404 million pairs of shoes to America in 2017.
The upward trend is likely to continue, too, as rising wages in China increase the cost of goods produced there and the country directs more of its manufacturing resources toward pricier goods like electronics.
Adidas, for instance, said in May that Vietnam had overtaken China as its top supplier for footwear, with Vietnamese factories producing 44 percent of its shoes by volume in 2017, up from 31 percent in 2012, and Chinese manufacturers supplying 19 percent, down from more than 30 percent in 2012.
This balance could help shield the company from potential tariffs or supply chain disruptions if President Donald Trump’s trade war with China continues to escalate, a fact that competitors seem to be taking notice of. Puma, for one, said this spring that its sourcing team was hard at work creating a contingency plan in case trade with China, which produces about a third of its products, is disrupted.
The growth in goods coming from Vietnam would no doubt be even greater had Trump not decided to pull out of the 11-country Trans-Pacific Partnership shortly after taking office. The agreement, led largely by Japan and Canada, was designed to lower trade barriers throughout the Asia-Pacific region and stymie China’s growing power, and was projected to save the shoe industry $6 billion in taxes over a 10-year period.
Why Vietnam Continues to Become a Bigger Sourcing Destination