Indonesia's Footwear Export Growth Not Too Significant in 2018

author : Administrator

Growth of Indonesian footwear exports is expected to remain below 10 percent year-on-year (y/y) in 2018. Sigit Murwito, Executive Director of the Indonesian Footwear Association (Aprisindo), expects Indonesia's footwear export growth to be in the range of 6-7 percent (y/y) in 2018.

Indonesian footwear products are shipped to 160 countries around the globe. The biggest markets are the European Union (EU) and the United States (USA). Both regions account for almost 60 percent of Indonesia's total footwear exports. Meanwhile, the Middle East is also emerging as a strong consumer of Indonesian shoes, supported by strong purchasing power.

However, Vietnam is increasingly becoming a big force in the global footwear market supported by significant investment realization in Vietnam's footwear industry. Therefore, Vietnam's (global) market share is rising (see table below). While China, Italy and Indonesia have all experienced sliding market shares, Vietnam's role in the global footwear market has grown sharply.

Indonesian footwear products are shipped to 160 countries around the globe. The biggest markets are the European Union (EU) and the United States (USA). Both regions account for almost 60 percent of Indonesia's total footwear exports. Meanwhile, the Middle East is also emerging as a strong consumer of Indonesian shoes, supported by strong purchasing power.

However, Vietnam is increasingly becoming a big force in the global footwear market supported by significant investment realization in Vietnam's footwear industry. Therefore, Vietnam's (global) market share is rising (see table below). While China, Italy and Indonesia have all experienced sliding market shares, Vietnam's role in the global footwear market has grown sharply.

The domestic footwear industry of Indonesia is an important asset to the country’s manufacturing sector. Indonesia produces footwear (shoes) for several big global brands (triggered by Indonesia’s low labor costs), implying that the industry provides many job opportunities for Indonesians and is a vital foreign exchange earner. Investment in Indonesia’s footwear industry particularly originates from China and South Korea.

Besides rapidly rising minimum wages in the 2013-2015 period, another problem of Indonesia's footwear industry is the domestic supply of raw materials, most importantly leather and rubber. Despite being one of the world’s leading natural rubber producers, Indonesia needs to export this commodity first for processing purposes as domestic processing facilities are still insufficient.

Source: Indonesia Investment




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