Vietnam Footwear Manufacturing: Industry Overview 2024

Vietnam footwear manufacturers count themselves as part of one of the biggest footwear manufacturing industries in the world. Trailing only India and China, this relatively small country exported footwear to the tune of US$19.94 billion in 2023, made for some of the most well-known footwear brands.

From sandals to running shoes and everything in between, Vietnam exports footwear to just about every corner of the planet. This has made the country somewhat expert in this field with a sizable workforce with experience in the sector. This, in turn, is seeing more firms drawn to making shoes in the country further perpetuating somewhat of a snowball effect.

As a result, Vietnam was the world’s second-biggest exporter of shoes in 2023 accounting for about ten percent of the world’s supply.

But foreign footwear brands considering manufacturing in Vietnam should keep in mind that doing business in this emerging economy (or any emerging economy for that matter) is not always easy. There are often challenges or obstacles that need to be overcome and key questions that should be asked to ensure compliance with regulatory requirements both in Vietnam and its export markets.

With this in mind, this article runs through key factors that foreign enterprises looking to manufacture footwear in Vietnam should be aware of.

Vietnam footwear manufacturing in numbers

These numbers showcase the scale and importance of Vietnam’s footwear industry, highlighting its role as a key export sector and a major employer in the country. The sector’s growth, driven by global demand and foreign investment, underscores Vietnam’s competitiveness in the international footwear market.

Vietnam footwear exports

Existing Vietnam footwear manufacturers should be well-versed with the export requirements of the footwear they produce. These firms will likely be able to assist firms new to footwear manufacturing in Vietnam in completing the necessary export requirements. In this light, this section provides a short overview of exporting footwear from Vietnam

Vietnam footwear exports, September 2024

Source: Vietnam Exports Tracker

Vietnam imports of textile, leather and footwear materials, September 2024

Source: Vietnam Imports Tracker

Vietnam footwear production numbers

Vietnam’s footwear manufacturing industry continues to show robust growth, with the latest figures from the Vietnam Industrial Production Index revealing a 1.5 percent increase in production in September compared to August. The month-on-month rise reflects steady demand as the industry builds momentum in the latter part of the year.

Year-on-year data underscores even stronger performance, with September 2024 production up by 17.6 percent compared to the same month in 2023. This significant increase highlights the sector’s ongoing recovery and expansion following recent global challenges. For the year-to-date period (January to September 2024), the footwear manufacturing sector has achieved an 11.6 percent increase in production compared to the same period last year, showing sustained growth across the industry.

Raw materials

Vietnam’s location in the southeast corner of mainland Southeast Asia puts it in a prime location for accessing and importing raw materials to make footwear. 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 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

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 enforcing these agreements exist.

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.

ESG in footwear manufacturing in Vietnam

Environmental, social, governance, or ESG, has become an important component in manufacturing enterprises in many parts of the world. Whereas there is a general consensus that these issues need to be addressed in manufacturing, there are also regulations in key developed markets that force firms to build ESG into their supply chains.

Corporate Sustainability Reporting Directive

From the beginning of 2024, EU regulations dictate that large firms and listed companies must produce ESG reports detailing the risks and challenges to their business of social and environmental issues. This is a part of the Corporate Sustainability Reporting Directive or CSRD, which aims to ensure investors are better informed as to the impacts of their investments.

EU Strategy for Sustainable and Circular Textiles

The EU has also developed the EU Strategy for Sustainable and Circular Textiles. This seeks to ensure that the consumption of textile products, like shoes, have a minimal impact on the environment.

Extended Producer Responsibility requirements are also part of the strategy. This essentially requires firms to build into the retail price of their items any social or environmental costs incurred anywhere in their supply chain. For example, the cost of pollutants produced from chemicals used to treat materials in Vietnam must be paid for by EU consumers.

Uyghur Forced Labor Protection Act

The Uyghur Forced Labor Protection Act prevents goods from China’s Xinjiang province from entering the United States. Of late, it has become common for goods produced in Xinjiang to first transit through Vietnam to the US. 

Of note, between October of last year and May of this year, US Customs stopped 950 shipments entering the US from Vietnam under the UFLPA valued at US$520 million. Of those 528 were released, 207 are still pending an outcome, and 215 were denied entry. Those denied shipments were worth a collective US$20.9 million with 46 shipments of apparel, footwear, and textiles among them valued at US$496,485.

Foreign brands manufacturing shoes in Vietnam

Adidas made in Vietnam

Adidas has been steadily diversifying its supply chain out of China and south to Vietnam for some time. By 2024, Adidas had 61 factories making footwear in Vietnam. These were mostly concentrated in southern Vietnam’s Dong Nai province.

See also: Where are Adidas made in Vietnam 2024?

Nikes made in Vietnam

Nike utilises about 63 factories around Vietnam to make its footwear. These are predominantly located in southern Vietnam, in and around Ho Chi Minh City. Specifically, there are 54 Nike shoe factories in the south with just seven in the north and two in the centre. As a result, a little over two-thirds of Nike factory workers in Vietnam, around 276,163 people, are located in southern Vietnam too.

See also: Where are Nikes made in Vietnam?

Crocs made in Vietnam

Moving away from sports shoes, well-known casual footwear brand Crocs also makes its shoes in Vietnam. In 2022, 53 percent of crocs were made in Vietnam. Notably, all Crocs suppliers are this-party suppliers with no company-owned production facilities. 

Timberland, Vans, The North Face

VF Corporation, which owns a number of big-name brands including Vans, Timberland, The North Face, Dickies, and Jansport, was working with 208 firms in Vietnam in 2023. Of those seven were licensees, 36 were subcontractors, 56 were tier 1 suppliers, and 109 were tier two suppliers.

Puma

In 2023, Puma had 78 suppliers spread out around Vietnam. Ho Chi Minh City was host to the most Puma suppliers with 10 factories whereas Binh Duong was a close second with nine. 

In 2022, Vietnam was Puma’s second biggest source country, producing 30 percent of the firm’s footwear and apparel. Vietnam trailed only China which accounted for 32 percent of Puma’s manufactured goods.

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.

That said, foreign firms looking to manufacture shoes in Vietnam should be mindful that there are a number of ESG regulations in key export markets that can impact their Vietnam operations. For firms new to manufacturing in Vietnam, asking about a contract manufacturer’s ESG compliance plans can be crucial.Furthermore, whereas Vietnam’s myriad of free trade agreements have reduced import tariffs in many markets, there are still a number of countries with which Vietnam does not have free trade agreements. In these instances, shoe imports may fall back on MFN tariffs which can be up to 30 percent. Understanding these agreements and the tariffs associated can be crucial to ensuring foreign brands maximize the value of their Vietnam manufacturing operations.

All of that said, 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.

Last updated: November 1, 2024