HUNTINGTON BEACH, Calif. — Footwear is one of the most price-sensitive consumer products, so increasing production costs in China have motivated U.S. importers to source more shoes in lower-cost countries such as Vietnam and Indonesia.
The average price of shoes imported into the U.S. in 2011 increased 12.2 percent over 2010 to $9.84 a pair, and that caused sales volume to decline 3.4 percent. The trend has continued into 2012.
“The correlation between the price of shoes and consumer purchasing is undeniable,” Matt Priest, president of the Footwear Distributors and Retailers of America, told the group’s annual distribution and customs conference Monday.
More than 99 percent of all footwear purchased in the U.S. is imported. Americans last year imported 2.3 billion pairs of shoes, or more than 7 pairs for every man, woman and child in the country, Priest said.
Although China continues to dominate the U.S. market, accounting for more than 85 percent of the volume, that is China’s lowest market share since 2005. Production costs in China continue to edge up due to increased costs for labor and materials, and, until recently appreciation of China’s currency against the dollar.
As a result, footwear importers are shifting some of their sourcing to western China, where production costs are lower, and to low-wage countries. Vietnam’s market share, for example, ticked up to 7.6 percent in 2011 from 6.7 percent the year before.
Priest noted that the U.S. is negotiating a free trade agreement with Vietnam. If an FTA is established, the volume of shoes imported from Vietnam will increase as duties are reduced, he said.
In fact, FDRA joined the Retailer Industries Leaders Association earlier this year in urging a reduction of import tariffs on footwear in line with negotiations for a Trans-Pacific Partnership.
It is not easy to shift production to other countries, however, because other low-cost regions do not have the critical mass of suppliers that has been established in China over the years. Also, logistics and ocean transportation services in those countries are normally not up to the standards importers are used to in South China.
Footwear is a major contributor to consumer demand in the U.S. The 2.3 billion pairs of shoes that were imported last year had a total value of $22.7 billion.
Footwear is also important for shipping lines in the eastbound trans-Pacific, ranking eighth among all containerized imports, said Brian Conrad, executive administrator of the Transpacific Stabilization Agreement.