Insight:
- The footwear market in Vietnam is booming! Seeing how the products and customer groups are becoming so diverse is exciting.
- All this growth is being fueled by the rising middle class and the increasing number of people living in cities.
- It is not all smooth sailing. The industry faces many challenges, like intense competition, rising production costs, and ever-changing customer demands. It’s a tough market to navigate.
The footwear market in Vietnam is taking off, and all sorts of factors are driving it. One big thing is how people are changing the way they buy things.
We are seeing a whole range of footwear options, from local brands to international names, and serving everyone from budget-conscious shoppers to those who want to be the best. It’s a dynamic and exciting market to watch.
A huge customer base opens up a world of opportunities
Vietnam is notable for having a wide customer reach with individuals from different class levels and ages. It’s a large market opportunity. Experts believe that by 2030 Vietnam will be the 11th biggest market in the world with an 80 million headcount of consumers, making it a 34% development since 2024!
This even claimed that Vietnam would move two more spots into the 10th position! Furthermore, the population earning more than $20 per day is projected to increase greatly between 2021 and 2030.
As we go back to the nation’s demography, over half of Vietnam’s population is predicted to live in urban cities with the population reaching 65.71 million in the year 2050. This development is dominated in metropolitan areas such as Ho Chi Minh City, Hanoi, and their surrounding region.
This is all made possible due to the steady growth of the economy. This urbanization has a lot of advantages both for the individual and the economy, such as improvement in the standard of living and increased consumption.
Vietnam’s becoming a hot spot for a growing middle class! It’s one of the countries with the fastest growth in this area. They are predicting that 23.2 million more people will join the middle class in 2030, bringing the total to 56 million!
That puts Vietnam in the top seven out of nine countries seeing this kind of rapid growth over the next decade.
McKinsey, a well-known global consulting company, has revealed changes in the Vietnamese consumer class since 2020. In 2022, 58 million people were considered low-income consumers, those whose daily expenditure is less than $11. However, this number is projected to plummet by over half, reaching approximately 27 million people by 2030.
At the same time, the group of basic consumers is about to see some impressive growth, increasing from 36 million people in 2020 to 57 million by 2030 – this is a growth of nearly 50 percent! And it is not only the basic group, other groups, even those which are already developed, high income, higher than $20 a day, are expected to increase.
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Market growth and trends
The Vietnamese footwear market is taking off! There are some contributing factors, including low labor costs, availability of experts, and some excellent trade agreements. By the close of 2021, some 2,200 footwear businesses operated within Vietnam.
In 2024, they envisage an inflow of $2.35 billion from the market, with an increase of 2.5% for 2025, to reach $2.49 billion. They are forecasting that by 2028, it will be even more than that, reaching $2.92 billion! That comes to a compound annual growth rate of 5.58% between 2024 and 2028.
The largest segment by revenue share comprises textiles and other types of footwear reported revenue of $0.76 billion, followed by leather shoes and sneakers. By 2028, the experts predict the market will manage to sell 157.7 million pairs of shoes in total.
Consumers want different styles of shoes for different activities, and they want them to last. Online shopping is becoming popular. Social media has provided great encouragement to buy. Many online stores are available as options.
Out of all the various customer segments, the middle class is the fastest growing and is proving to be the key consumer group in pursuit of quality and timeliness. Young adults comprise a large chunk of the market and are always on the move in search of the latest and most fashionable. The children’s shoes and the work boots market are still very shallow in potential. They have to grow further.
To satisfy all these transforming demands, the shoe-making business needs to step up its game. Sophisticated technologies could be applied, eco-friendly materials considered, and creativity incorporated. They should provide customers with maximum availability of their shoes both offline and online. One point that is worth stressing about is sustainability.
More and more brands use recycled materials or eco-friendly options to help the environment. They are implementing sustainable production practices, such as reducing emissions and water consumption. Beyond the factory, there is also a growing focus on having transparent supply chains, making sure workers are treated well, and trying to minimize any negative impact on society.
The market challenges
While things are looking good, the footwear market in Vietnam still has its share of challenges and hurdles to overcome.
- There is a lot of competition out there! Big international brands are strong and put pressure on local brands. Cheap imports are also making things tough for Vietnamese products.
- Later, there are still the costs of making things. Leather, fabric, and shoe soles prices are always fluctuating. This makes it difficult to plan and extract profit continuously. Labor in Vietnam is becoming more expensive. To some extent, it is unreasonable to compete with countries that have lesser labor costs. To make matters worse, transportation and storage systems are not always up to the mark, which further increases expenses.
- It is also a challenge to understand the preferences of the people and the level of thinking of the majority of the target market. Buyers are fickle and do not know what they want, and businesses have to be very adaptable in imparting designs and instilling production methodologies. Additionally, it is difficult for people to make the purchases for which they aspire, creating problems for businesses to charge reasonably good prices to sell the products.
- There are some real challenges on the technical and technological side, too. Shoe factories in Vietnam haven’t embraced the latest technology, which means they are not as productive or making shoes that are as good as they could be. Plus, there are not enough people with design and product development skills, so it’s hard for them to come up with new shoes that can compete. Their quality control systems are not always up to par, which can hurt their reputation and make it hard to compete.
- It is tough to get shoes from other countries. Lots of places have import quotas, which makes it harder for Vietnamese companies to export their products. Those international quality and safety standards are getting stricter all the time, so Vietnamese companies need to work hard to meet them.
- Last but not least, there are environmental concerns. The shoe industry creates a lot of waste, and that’s polluting the environment. Plus, shoe factories need to make sure their workers have a safe and fair workplace.
To tackle these challenges, the Vietnamese footwear industry needs to up its game. They need to focus on improving production, using the latest technology, and making sure their shoes are top-notch.
Building strong brands and getting the word out about their products is also super important to gain recognition and stand out in the global market. This is vital for companies to be socially responsible, protect the environment, and make sure their workers have good conditions.
Conclusion
The Vietnamese footwear market is really on the rise. It’s being driven by a growing population, people changing how they buy things, and a booming middle class. But, there are some challenges they need to face, like lots of competition, rising costs, and customers who are changing what they want.
There are things like technology, the environment, and getting into international markets that they need to figure out. But, with the right strategies, the Vietnamese footwear industry has a lot of potential to become a major force, helping the economy grow and improving people’s lives.
