The coronavirus pandemic has broken supply chains, causing a severe shortage of manufacturing materials as well as shrinking the market for final products, said Lefaso, an association representing Vietnamese shoemakers.
In the first half of the year, Vietnam’s footwear and handbag exports fell by 6.7% from the same period in 2019, data showed.
Lefaso said many major manufacturers such as Gia Dinh and Nguyen Khang are struggling to secure materials for their production as 55% of such materials are reliant on imports.
Such companies are also faced with the problem of selling their products as demand has fallen in the established markets of the US and EU, which are badly hit by the coronavirus.
Economists stated that Vietnam’s footwear industry will continue to experience difficulties in the remainder of the year as its recovery depends heavily on the virus situation in the two above-mentioned markets.
Lefaso predicted that the market will not rebound until October, with the biggest driving force coming from the free trade agreement between Vietnam and the EU, set to take effect in August.