Low-cost labour, a long history of footwear and apparel, and a broad drive among shoemakers and brands to diversify their supply chains has seen shoe manufacturing become a major industry in Vietnam.
Getting shoes made in Vietnam for foreign firms and brands, however, is not always easy. From finding the right supplier to ensuring the right materials are used, and ensuring intellectual property protection, there are a myriad of considerations that need to be made.
Understanding the nuances of manufacturing shoes in Vietnam including the country’s unique business environment and business practices can be key to ensuring a high-quality product is delivered on time.
Business structure in Vietnam
Open a footwear factory in Vietnam
Low-cost labour, tax incentives, and a broad drive among manufacturers to diversify their supply chains have seen factories proliferate all over Vietnam.
Opening a factory in Vietnam for foreign firms or individuals, however, is not always easy. Not only are there several technical requirements that need to be met, but there are also a broad number of considerations that need to be made–choosing the right location, the right business structure, and finding the right workers, for example.
Understanding the nuances of opening a factory in Vietnam and the complexities of business establishment procedures in advance of entering the market can therefore be crucial to the success of a new factory in Vietnam.
For more information see: How to Open a Factory in Vietnam: Ultimate Guide 2024
Use a local footwear contract manufacturer
The most common means of manufacturing shoes in Vietnam is contract manufacturing whereby a local factory that already exists manufactures a brand’s shoes on a contractual basis.
Most big apparel brands like Nike and Adidas use contract manufacturers, whereby almost everything is taken care of by the Vietnam-based factory. Note, however, that the size of these big brands and their buying power gives them a lot of control over their contract manufacturers which they often exercise to ensure quality. Smaller outfits might, however, find that they have a lot less control using contract manufacturers than they would if they built their own local firm.
Working with Vietnam footwear manufacturers
Most Vietnamese footwear manufacturers will have worked with foreign firms before and likely will not expect any special treatment. That said, there are a few little Vietnam-specific, cultural nuances that can help to build and strengthen relationships.
The value of connections in Vietnam
Cold-calling Vietnamese businesses is unlikely to yield results. In fact, it’s quite common for phones to go unanswered and for Vietnamese businesses not to respond to emails. Instead, business in Vietnam is generally done through connections. This can be both good and bad. On the one hand, working local connections can result in better deals. On the other, it can result in good suppliers not being considered because they simply don’t know the right people.
Getting around Vietnam
A solid number of footwear manufacturers in Vietnam are located in industrial clusters. With this in mind, buyers can usually visit a few factories in relatively quick succession.
Note that, the bulk of Vietnam’s footwear manufacturers are located in southern Vietnam. Ho Chi Minh City and neighbouring provinces Dong Nai and Binh Duong are key hubs for clothing manufacturing. All three provinces are well connected with about an hour or two travel time between them.
Footwear raw material availability in Vietnam
Vietnam’s location in the southeast corner of mainland Southeast Asia puts it in a prime location for accessing raw materials. This section covers the availability and accessibility of said raw materials.
Rubber
Southeast Asia accounts for the bulk of the world’s rubber supply. The biggest producer in 2022 was Thailand, followed by Indonesia and then Vietnam, according to Statista data. This makes footwear manufacturing in Vietnam much easier with the core ingredient in most shoes readily available close by. What’s more all three of these countries are members of the Association of Southeast Asian Nations. With a number of free trade agreements covering the bloc and its trading partners, moving rubber between these three countries is easier and cheaper than it might otherwise be.
Leather
Leather, unlike rubber, is not as common in Southeast Asia with countries like Italy, the US, and Brazil accounting for the bulk of the world’s leather exports. That said, Vietnamese footwear manufacturers have managed to secure relatively stable supply lines of leather in the region.
Locally China, South Korea, Taiwan, and Thailand all supply leather to Vietnam and accounted for about US$4.24 billion of Vietnam leather imports out of a total of about US$5.58 billion in 2023.
That said, Vietnam footwear manufacturers also use imported leather from the US, Italy, and to a lesser extent Brazil among a handful of other nations.
Textiles
With major cotton producers in the US in the east and Australia to the south and the bulk of processing said cotton carried out in China to the north and India just a hop, skip, and a jump to the west, Vietnam is at the centre of the world’s textiles supply. This can be hugely beneficial to Vietnam’s footwear manufacturers when looking to access suppliers of yarn and fabrics.
Intellectual property protection in Vietnam for shoe brands
Intellectual property protection can be an issue in Vietnam. Knock-off shoes can be found at local markets and small clothing stores all over the country. These are usually sold at a fraction of the cost (and are a fraction of the quality too).
Notably, Vietnam is a signatory to most of the world’s biggest intellectual property agreements, including the Berne Convention on copyright, the Patent Cooperation Treaty, the Madrid Protocol, and the Paris Convention. However, numerous problems exist in enforcing these agreements.
There have also been extensive efforts to crack down on the sale of fakes, however, it very much seems like when one counterfeit goods outfit is dismantled another quickly pops up to take its place. As a result, Vietnam basically has a permanent position on the US Trade Representative’s Special 301 Report watchlist which monitors intellectual property protections around the world.
All of that said, a lot of this is part and parcel with doing business in an emerging economy. With this in mind, the risk is not really much worse than in other parts of the world competing for shoe manufacturing business.
It’s also worth mentioning that local firms dealing with foreign brands tend to be mindful of how the misuse of intellectual property can damage their reputation and tend to steer clear.
Foreign footwear brands manufacturing in Vietnam
Vietnam has become a major hub for footwear manufacturing, attracting numerous international brands due to its competitive costs, skilled workforce, and favourable government policies.
Many renowned foreign footwear brands have established manufacturing operations in Vietnam to capitalise on these advantages.
Some of the most prominent foreign footwear brands manufacturing in Vietnam include:
- Nike: A global leader in athletic footwear, Nike has a significant presence in Vietnam, producing a wide range of sneakers and athletic shoes. As of February 2024, Nike had around 159 factories all over Vietnam producing shoes, apparel, and equipment for a number of its brands.
- Adidas: Another major player in the sports footwear industry, Adidas manufactures various athletic and casual shoes in Vietnam.
- Vans: Known for its iconic skateboarding shoes and apparel, Vans has a substantial manufacturing base in Vietnam.
- Skechers: A popular brand for casual and performance footwear, Skechers produces many of its shoes in Vietnam.
- Under Armour: This performance apparel and footwear brand manufactures some of its shoes in Vietnam.
- Timberland: Renowned for its durable boots, Timberland also produces a range of footwear in Vietnam.
- Clarks: A British-based shoe brand, Clarks manufactures some of its shoes in Vietnam.
- Dr Martens: Known for its iconic boots, Dr Martens has production facilities in Vietnam.
These are just a few examples of the many foreign footwear brands that have found success in Vietnam. The country’s competitive advantages have made it an attractive destination for companies seeking to manufacture high-quality footwear at competitive prices.
Key footwear manufacturing locations in Vietnam
Vietnam’s footwear industry is concentrated in several key regions, each with its own unique strengths and characteristics.
Southern Vietnam is the largest centre for footwear manufacturing, with Ho Chi Minh City and surrounding areas, Dong Nai Province, and Binh Duong Province being prominent hubs. This region offers a well-developed infrastructure, a skilled workforce, and a favourable business environment.
Central Vietnam, including Da Nang and Quang Nam Province, has a growing footwear industry with a focus on mid-range to high-end products.
Northern Vietnam, while not as heavily concentrated in footwear manufacturing, has a growing number of factories and suppliers, particularly in Hanoi.
These locations all have access to key infrastructure required in order to both import raw materials for shoe making and to export finished footwear products.
How to find a footwear manufacturer in Vietnam
Business matchmaking services are platforms that connect businesses with potential partners, customers, or investors. These services often specialise in specific industries or regions, allowing businesses to find the most relevant connections. Matchmaking services can be particularly valuable for small and medium-sized enterprises (SMEs) that may lack the resources or networks to find suitable partners on their own.
By leveraging matchmaking services, businesses can expand their networks, discover new opportunities, and potentially form strategic alliances. These services can also help businesses to enter new markets, find suppliers or distributors, and secure funding. Matchmaking events, such as trade shows and conferences, are often organised by matchmaking services to facilitate face-to-face interactions between businesses.
What’s next?
Vietnam footwear manufacturers are a dime a dozen and with excellent access to key raw materials and relatively low-cost labour, making shoes in Vietnam can be relatively easy and cost-effective.
There are a number of big brands manufacturing footwear in Vietnam already and they have been for years. In this context, Vietnam is well prepared for new brands to enter the market, and with the right support, foreign brands can realise real value in footwear manufacturing in Vietnam.
With this in mind, to keep abreast of what’s happening in Vietnam’s footwear manufacturing industry, foreign footwear brands should make sure to subscribe to the-shiv.