World Footwear


Challenges & opportunities in sourcing countries

May 26, 2017 World
Challenges & opportunities in sourcing countries
With the demographic & economic changes that are occurring, will China remain as the main sourcing country for footwear?
Global population is growing, which in turn means that demand for footwear will continue to increase in the next years. Furthermore, the middle class and disposable income are increasing, especially in developing countries that belong to Asia and Africa.

By 2022 it’s expected that 74% of the population in China will belong to the middle class, a value that may come as a surprise when compared to the 4% by 2000.

Sourcing countries, can also be target markets?

Many of these countries are usually used as a manufacturing base for footwear production and that’s it. Companies don’t think of them as a potential target market to sell the products they actually produce there.

The economic changes undergoing in China proves that all these countries have the potential for being an interesting market for the footwear companies. The advantages are clear. Not only people have increasingly more money to dispose of, but even logistics costs will be lower.

Fresh sourcing opportunities in developing countries

China, which is the main footwear producer and exporter in the world, has been so far the choice for most companies who are looking to source their production. Nonetheless, in the latest years, China has been facing several changes. Wages and working conditions for workers have improved greatly and as result, China begins to be less attractive for companies to source their production when compared to other Asian neighbors.

For instance, in Vietnam (a country with a population of 91,7 million) the minimum wage is around 150 US dollars and overall costs are lower. In fact, Vietnam is already the third-largest exporter of footwear in the world (2015).

Indonesia, Pakistan, Bangladesh, Turkey and Mexico are other interesting places for footwear companies to outsource their production.

Players in this industry should keep in mind that the competitive environment is always changing and they should be prepared to adapt to new challenges and take advantage of opportunities.

Want to know more about the current state of the footwear industry? Then you should consider getting access to the World Footwear Yearbook 2016.