Leather and footwear companies mainly produce goods for export, without paying much attention to building their own distinctive brands. Rather, they continue to work as sub-contractors for global brands such as Nike or Adidas because it would be too difficult to compete with those well-known brands on the global market. Nguyen Thi Tong, deputy chairwoman of the Viet Nam Leather and Footwear Association, discusses this issue.
|Nguyen Thi Tong, deputy chairwoman of the Viet Nam Leather and Footwear Association.
How have the difficulties in the world economy and the public debt problems in Europe affected exports of Vietnamese leather and footwear?
These problems significantly reduced consumption across the globe. The domestic leather and footwear industry exports 90 per cent of what it produces, so the industry suffered greatly from the worldwide economic recession and the public debt crisis in Europe.
Only the enterprises supported by foreign investment, which occupy a large segment of the national total export value of leather and footwear, could keep their exports stable because they enjoyed relationships with major brands in the world leather and footwear industry.
In the first half of 2012, the domestic leather and footwear industry gained a year-on-year increase of 25 per cent in export value to US$3.4 billion. The industry expected to reach the yearly target of $7-7.3 billion in export value for this whole year.
Revenue from value-added products in the industry for the first half increased 40-45 per cent against 38-40 per cent in the last year. That means the industry's strategy of producing more value-added products may be a step in the right direction.
Many enterprises have not really paid attention to building their own brand. Rather, they continue to work as sub-contractors for major global brands. What do you think about this issue?
Many experts say that it is unnecessary for companies to build their own brands if they want to compete in the global economy.
Rather, it is more important for them to reinforce the prestigious reputation of Vietnamese manufacturers for producing quality products.
European consumers know and trust made-in-Viet Nam footwear products. Most major brands in the global leather and footwear industry, such as Nike and Adidas, consistently choose Vietnamese manufacturers to make their products.
Domestic brands of leather and footwear, such as Thuong Dinh and Biti's, also enjoy prestige in the global market. Biti's exports its footwear to China and Thuong Dinh ships its products to France.
However, in general, it is difficult for domestic footwear companies to quickly establish themselves on the global market.
The State has policies to solve difficulties in production and business in the leather and footwear industry. How do the policies help the industry's enterprises?
The Government has policies to support the leather and footwear enterprises and help them overcome production and business difficulties.
But the biggest problem the companies face is that they need capital for production, while they are simultaneously in a situation of low turnover due to low export orders during the economic crisis.
The association expects the Government to reduce pressure on the industry to increase prices. — VNS