Once upon a time, China dominated the footwear export market with no major competitors in sight. On recent years, however, Vietnam has become a major player in the footwear market. Although the small Southeast Asian country’s percentage of global footwear exports is about 12%, significantly less than China’s 40%, the disparity is much smaller than it was a decade ago. And the Vietnamese export market is growing rapidly, while China’s continues to dwindle.
The sudden uprising of Vietnam’s footwear exporting industry is due in part to the decreasing popularity of its competition, but it is also driven by several huge shoe producers in Vietnam. Interestingly, none of the five biggest players are Vietnamese-owned; they are either Taiwanese or Korean. Who are “the big five” and why are they such massive forces in the world of footwear?
5. Hwaseung Vina Co., Ltd.
Turnover: $224.4 million
The Korean Hwaseung has large stakes in the automotive parts and industrial chemical industries in addition to footwear. Still, the sheer mass of the company and its global presence -- it has offices in nine countries across four continents -- gives it a huge amount of global influence and turnover. The numbers are especially impressive given the small amount of employees Hwaseung comprises compared to its competition. It also produces one of Adidas’s most popular brands, Neo Label.
4. Pou Sung Vietnam Co., Ltd.
Turnover: $274.7 million
Pou Sung is Vietnamese through and through, hosting the majority of its workers at a massive industrial complex in Dong Nai Province. Like all of the companies in “the big five,” Pousung only takes on huge orders, not wanting to expend resources on slightly more localized care.
3. Chang Shin Vietnam Company Ltd.
Turnover: $321.2 million
Another Korean company, Chang Shin has had a larger presence in Vietnam than in any of its other East Asian locations ever since it opened a Saigonese factory in 1994. It specializes in performance running shoes, and it places emphasis on innovating the running shoe industry.Nike uses Chang Shin to produce some of their higher-end options.
2. Tae Kwang Vina Industrial Join
Turnover: $458.9 million
Tae Kwang also makes some of Nike’s footwear. In fact, it manufactured 60 million pairs for Nike in 2016, accounting for 12% of shoes the company sold worldwide. Like all of the entries on this list that have direct ties to huge names in footwear like Nike or Adidas, Tae Kwang’s strong connections give it easy access to cutting edge technology that make the footwear development process just as much machine-driven science as human craftsmanship.
1. Pouyuen Vietnam Company Limited
Turnover: $1.075 billion
Pouyen is one of the largest footwear manufacturers in the world. Like many of “the big five,” Pouyuen is also Korean-owned, also specializes in performance and outdoor footwear, and also produces shoes for both Nike and Adidas.
The similarities between most of the companies mentioned above illustrate several important trends in the Vietnamese footwear market. Running shoes designed with enough technology to elevate them above the competition are becoming a mainstay of industrial Vietnam.
Huge footwear brands have made Vietnam their production locale of choice for the 21st century. While that means a more advanced footwear infrastructure, it also makes it difficult to impossible for other brands to break into the traditional Vietnamese footwear creation scene. Many of the country’s factories will not accept anything less than gigantic orders, orders that small- to mid-sized brands cannot supply. But although “the big 5” set the tone for Vietnam’s footwear scene, there are other options for smaller brands looking to establish an industrial presence in Vietnam. They will be discussed in our upcoming post, “Introducing Ecolux.”