the footwear market in the eu

Transcription

CBI MARKET SURVEY: THE FOOTWEAR MARKET IN THE EU
CBI MARKET SURVEY
THE FOOTWEAR MARKET
IN THE EU
Publication date: April 2008
CONTENTS
REPORT SUMMARY
2
INTRODUCTION
4
1
CONSUMPTION
5
2
PRODUCTION
13
3
TRADE CHANNELS FOR MARKET ENTRY
17
4
TRADE: IMPORTS AND EXPORTS
25
5
PRICE DEVELOPMENTS
33
6
MARKET ACCESS REQUIREMENTS
36
7
OPPORTUNITY OR THREAT?
39
APPENDICES
A
PRODUCT CHARACTERISTICS
40
B
INTRODUCTION TO THE EU MARKET
48
C
LIST OF DEVELOPING COUNTRIES
49
This survey was compiled for CBI by Searce
Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer
Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer
Page 1 of 1
Report summary
This survey profiles the EU market for all kinds of footwear with the exception of safety footwear
and ski boots, which are covered in other CBI sector surveys.
Consumption
• Total EU27 footwear consumption was estimated at € 50,430 million in 2006. The average
EU consumption per capita was € 102, or 4.3 pairs. People in the Netherlands, Portugal,
Austria, Denmark, the United Kingdom and France were spending most on footwear, while
Bulgarians, Romanians and Hungarians spent the least.
• 2006 has seen the continuing growth of discount footwear retailers, but the growing
importance of fashion in footwear has resulted in the wider availability of footwear in other
types of outlets, particularly clothing retailers.
• EU consumption grew between 2002 and 2006 by an annual average of 1.9%, from € 46,860
to € 50,430 million. This disguised below average increases in many of the EU15 countries but
significant increases in the new EU member states. In volume terms the overall increase was
2.2% per annum on average.
• In many of the EU15 countries, the footwear market is polarising into lower quality/price
and higher quality/price sectors, whereas in the new EU member states a mid-range
quality/price sector is currently prevalent.
• Future EU footwear market drivers will be:
Æ The growing importance of fashion and celebrity/media influences on footwear designs.
Æ Demand for formal footwear in the new EU member states with a rising middle class and
more women at work.
Æ Demand for healthy and comfortable footwear, especially for the growing number of older
people, as in most countries the population is ageing.
Æ The continued shift from formal to casual footwear, especially in the EU15 countries.
Production
• In 2006, the turnover of the 18,000 footwear manufacturers was valued at € 16,014 million,
of which an estimated 65% was outdoor leather footwear. Italy, Spain and Portugal accounted
for 67% of EU production. From the new EU member states, Romania accounted for almost
10% of the value of production and 12% of production volume. Poland and Slovakia were also
sizeable footwear producers.
• By volume, EU footwear production decreased between 2002 and 2006 from 994 to 727
million pairs with decreases in most countries, except for Romania and Bulgaria. Even the
Eastern EU countries are now being seriously challenged by Asian producers.
• In 2006 the EU accounted for 5% of global footwear production (by volume) and that figure is
forecast to continue to fall, despite “anti-dumping” protectionist measures by the EU against
the largest Asian producers, China and Vietnam.
Trade channels
• Most footwear is supplied in most EU countries through the traditional route, which is from
manufacturer to importer/wholesaler to retailer. This channel is most relevant for exporters
from developing countries.
• Southern EU countries and the new EU member states continue to have many small footwear
shops. In the middle and northern EU countries many small retailers join a buying group,
which negotiates directly with (overseas) manufacturers.
• In France, Germany and the United Kingdom, there are also large retailers operating
international chain or franchised stores, which are expanding in the new EU member states.
• In 2006, there were an estimated 55,000 footwear retail outlets in the EU. Footwear
retailing has become more diversified. Consumers can nowadays buy footwear in many
different ways, for example at a retail outlet (footwear shop, chain store, sports shop,
clothing shop, discounter, hypermarket etc.), at a market stall, a factory outlet or by the
Internet. This complexity in footwear retailing has also affected the distribution structure.
Page 2 of 2
Imports
• The EU is the leading importer of footwear in the world. In 2006 imports were valued at
€ 26,244 million, or 2,942 million pairs. In terms of volume this 25% more than US imports
which were 2,370 million pairs.
• Germany, France, Italy and the UK were the largest importing countries and represented 60%
of all EU imports (by value).
• Between 2002 and 2006, all EU countries increased their imports of footwear. Overall, total
EU footwear imports rose in this period by an annual average 3.9% in value and by 11% in
volume as a result of more imports of cheap footwear.
• Footwear with leather uppers, formed nearly 60% of the value of EU imports (34% by
volume), which grew from € 12,955 to € 15,646 million between 2002 and 2006. Within this
product group, outdoor footwear represented 94%. The next largest product group was
footwear with plastic or rubber uppers, which accounted for 16% of the total EU imports
(36% by volume), followed by footwear with textile uppers. Footwear parts (included within
other footwear) accounted for 9% of imports in 2006, down from 12% in 2002.
• In 2006, EU footwear imports from developing countries were 2,082 million pairs, worth
€ 11,025 million. Between 2002 and 2006, the share from developing countries in total EU
footwear imports rose from 54% to 71% in volume terms.
• The volume supplies from developing countries were led by China, Vietnam, India, Indonesia,
Brazil, Thailand, Morocco and Tunisia.
• The top four importers (UK, Germany, Italy, France) accounted for 63% (52% by volume)
of all EU imports from developing countries, down from 64% (57% by volume) in 2002.
• Imports from developing countries by the new EU member states were valued at € 669
million (319 million pairs) in 2006, with large increases by Bulgaria and Romania.
• In 2006, around half of EU imports came from other EU countries by value, but just 25%
by volume. The leading suppliers to the EU were Italy, Germany and Romania, as well as
suppliers with high re-exports such as Belgium and the Netherlands.
Exports
• EU exports increased between 2002 and 2006 by an annual average of 0.4% in value from
€ 21,242 to € 20,489 million and 3.1% in volume from 1,007 to 1,137 million pairs mainly
due to falling exports outside of the EU, excluding to developing countries.
• However, exports of footwear to developing countries are increasing faster than intra-EU
exports, although intra-EU exports continue to dominate. In 2006, intra-EU exports accounted
for 73% of all exports by value (80% by volume). Exports to extra-EU countries (excluding
developing countries) have fallen by the highest rate, particularly to the USA.
• Italy remains the largest exporter, accounting for 33% of all EU exports.
• Leather footwear was clearly the largest product group, representing € 13,932 million, or
68% of all exports by value in 2006.
Opportunities for exporters from developing countries
+ Opportunities exist in the premium part of the market, particularly in the supply of good
quality leather footwear at competitive prices. Here it is important to demonstrate design
capabilities and a sensitivity to the fashion demands of the EU market place.
+ The demand for fashion footwear continues to grow, but design capabilities and a sensitivity
to the changing fashion needs of the market is required to be able to show a point of
difference.
+ The enlarged EU market will provide more opportunities. Eastern EU markets are less driven
by fashion. When producing traditional styles, you may find opportunities here.
+ As the EU footwear industry looks for ways to cut its costs, there will be opportunities
created by forming working partnerships. The best form of partnership is likely to be with
an EU company with a similar outlook to yourself, and one that operates in a niche market
e.g. children’ footwear, sandals, health footwear, outsized shoes and orthopaedic footwear.
Page 3 of 3
Introduction
This CBI market survey profiles the footwear market in the EU. The emphasis of this survey lies
on those products, which are of importance to developing country suppliers. The role of and
opportunities for developing countries are highlighted.
This market survey discusses the following product groups:
From a demand perspective (used for consumption)
• Women’s footwear
• Men’s footwear
• Children’s footwear
From a supply perspective (used for production and trade statistics)
• Leather footwear
• Plastic or rubber footwear
• Textile footwear
• Other footwear (e.g. waterproof footwear and parts of footwear)
For detailed information on the selected product groups please consult Appendix A. More
information about the EU can be found in Appendix B.
CBI market surveys covering the market in specific EU countries, specific product(group)s or
documents on market access requirements can be downloaded from the CBI website. For
information on how to make optimal use of the CBI market surveys and other CBI market
information, please consult ‘From survey to success - export guidelines’. All information can be
downloaded from http://www.cbi.eu/marketinfo Go to ‘Search CBI database’ and select your
market sector and the EU.
Page 4 of 4
1
Consumption
1.1
Market size
The global consumption of footwear has continued to grow rapidly, as increasing levels of
affluence are shared by a greater number of people around the world. The popularity of footwear
continues to grow. According to an international fashion survey by research consultancy GfK in
2007, shoes were seen as the most important fashion accessory. 35% of respondents placed the
highest value on trendy shoes. This figure rose to 40% for women. More details on this survey
appear later in this chapter.
While the footwear markets in Asia and Latin America are growing very rapidly, especially in
China, India and Brazil, the EU is still the largest single market for footwear in the world,
representing almost one third of global market value. There has been an annual average
increase of 1.9% since 2002 and the total market is now valued at € 50,430 million. Volume
growth has been higher over the period, indicating falling prices. The USA is the second largest
market, valued at approximately € 44,000 million. However more pairs are purchased in the USA
than in the EU (2,400 million pairs in 2006). Per capita consumption of 8 pairs in the USA is
higher than anywhere else in the world.
Table 1.1
EU consumption of footwear 2002 – 2006, € million / millions of pairs
2002
value
volume
2004
value
volume
2006
value
volume
Total EU
46,860
1,970
48,794
2,048
50,430
Germany
8,567
322
8,702
322
8,455
France
8,040
333
8,077
350
8,354
United Kingdom
7,592
318
7,993
329
8,176
Italy
5,960
249
6,203
248
6,321
Spain
3,709
192
3,900
199
4,224
Netherlands
2,290
64
2,160
65
2,413
Poland
1,324
97
1,485
111
1,688
Portugal
1,355
35
1,376
43
1,510
Belgium
1,312
38
1,233
39
1,316
Greece
1,100
35
1,193
37
1,264
Austria
1,065
39
1,069
40
1,157
Sweden
928
32
947
34
1,108
Denmark
673
28
700
30
732
Romania
333
36
463
39
610
Finland
466
20
476
20
523
Czech Republic
428
30
458
32
496
Ireland
437
23
442
24
477
Hungary
275
28
295
29
319
Slovakia
246
13
270
14
316
Slovenia
175
6
187
7
212
Lithuania
154
7
171
8
195
Bulgaria
132
12
146
13
181
Latvia
87
5
103
6
128
Luxembourg
101
2
104
2
108
Estonia
46
3
54
3
68
Cyprus
44
3
49
3
53
Malta
21
1
23
1
26
Source: Euromonitor, Verdict, CTC, HBD, Trade Estimates (2007/2008)
2,155
323
381
338
250
212
70
123
49
40
40
41
41
31
42
21
33
26
30
15
8
9
14
6
2
4
3
11
Average
annual %
change
in value
1.9
-0.3
1.0
1.9
1.5
3.3
1.3
6.3
2.7
0.1
3.5
2.1
4.5
2.1
16.3
2.9
3.8
2.2
3.8
6.5
4.9
6.1
8.2
10.1
1.7
10.2
4.8
5.5
The importance of the EU footwear market in the global footwear trade is not in dispute. The
accession of Romania and Bulgaria in 2007 added a further 30 million consumers to the EU,
creating a market of 497 million consumers. Levels of affluence enjoyed by western EU countries
is increasingly being spread to new member states, and more fashionable, quality footwear is
Page 5 of 5
being purchased in those countries. Most EU consumers now purchase footwear for reasons
beyond basic necessity.
The EU footwear market has grown consistently over the review period, but especially since
2004. However, there have been significant differences between the rates of growth of different
member states. For example, the highest growth rates have been enjoyed by the two newest
member states, Romania and Bulgaria, and two of the three Baltic States, Latvia and Estonia.
Conversely, below average, or in the case of Germany, negative growth has been experienced
over the period by some of the original EU member states. Nevertheless, since 2005, most
countries have seen footwear market values increase. The market remains weak in the UK and
Italy, but due to generally falling prices, market volumes have continued to grow.
Generally speaking, footwear growth rates in all the new member states have been higher than
growth rates elsewhere. There is no other significant regional trend within the EU. For example,
some Scandinavian countries are growing at rates well above the EU average (Sweden and
Finland), while others aren’t (Denmark).
Changing patterns of distribution have helped the market grow more in volume than in value.
Increasing numbers of discount retailers have made footwear more affordable for more
consumers, and the long term trend towards casual footwear and away from more formal
footwear has also helped to expand the total market. The EU footwear market is expected to
continue to increase slowly in the next few years. Differences in growth rates will continue to be
experienced between countries. See the individual country reports for more detail on differences
between per capita consumption.
The anti-dumping duties imposed on some very low cost producers has already been felt in the
EU. Average footwear prices are broadly starting to slowly increase after years of decline. This
will have the effect of slowing growth of market volumes. Despite the forecasted market growth,
the EU is likely to account for a declining proportion of the global market, as demand for higher
quality, more fashionable footwear will grow at a much faster rate in the emerging and
developing economies in Asia and elsewhere.
1.2
Market segmentation
Along with differences in consumption between countries, there also exists significant differences
in consumption between the main market segments. The most common method of segmenting
the market in all EU countries is by gender. Generally speaking, the women’s footwear segment
is the largest, and the children’s footwear segment is the smallest. This form of segmentation is
quite clear cut, but further analysis is required to understand the variety of footwear types
purchased by each consumer.
Hence, segmentation by type of footwear is also commonly used to segment the market. While
this method of segmentation provides further insight beyond segmentation by gender into how
or why a product might be purchased, this also does not provide a perfect picture. There is now
greater overlap between different types of footwear and more multi-functional footwear is being
purchased. For example, the market for sports footwear contains a very high proportion of
footwear for purely casual use. Fashion footwear in some segments is also purchased for
everyday use, rather than for more formal occasions.
Other methods of market segmentation, provide further differences. For example, segmentation
by socio-economic group will highlight the size of different economic segments. It will also
highlight the fact that different EU countries have different sized segments. For example, due to
different levels of affluence between member states, you will find different numbers of affluent
consumers. The conclusion here would be that a country with higher numbers of affluent
consumers will have larger markets for quality and fashionable footwear.
Page 6 of 6
Segmentation by age will for example reveal that older consumers purchase more comfortable
footwear and tend to purchase less pairs of footwear than younger consumers. On the other
hand, this form of segmentation will also reveal that younger consumers tend to purchase more
fashionable and more branded footwear.
Data is less easy to find, but psychographic methods of segmentation can also show how the
market can also be segmented according to shopping behaviour by different groups. This would
provide information on those consumers that purchased footwear on impulse, rather than as a
planned purchase. It may provide information on the proportion of consumers who only purchase
footwear when it is available on special offer. It may also provide information on those
consumers who are more influenced by fashion styles and brands, what some may call superficial
values, as opposed to the intrinsic qualities of the footwear itself.
Tables 1.2 and 1.3 illustrate how some of these methods of segmentation provide more useful
information on specific leading EU markets. In Table 1.2, important differences between market
value and market volume are revealed, both between countries and between genders. For
example, where the value is higher than the volume for women, but volume is higher than value
for men, this indicates that the price of men’s shoes is lower than the price of women’s shoes.
Note, how these percentages translate into actual values can be found in the individual country
reports.
Table 1.2
Segmentation by gender in the major EU markets in 2006,
% value and % volume
Women
Germany
France
United Kingdom
Italy
Spain
Netherlands
Belgium
Value
53.0%
51.6%
43.9%
62.1%
56.6%
58.0%
64.1%
Volume
30.7%
45.1%
44.4%
60.0%
51.0%
66.0%
66.0%
Men
Value
32.0%
31.7%
35.0%
26.9%
26.2%
26.4%
20.4%
Volume
49.5%
34.4%
30.5%
21.0%
23.4%
15.0%
9.0%
Children
Value
15.0%
16.7%
21.1%
11.0%
17.2%
15.6%
15.5%
Volume
19.8%
20.5%
25.1%
19.0%
25.6%
19.0%
25.0%
Source: Euromonitor, Mintel, Trade Estimates (2007)
Looking more closely at children’s footwear, the share of children’s footwear averages around
16% in the major markets with lower shares in Italy and higher shares in the UK. In this
segment there are differences in who buys footwear and the criteria used when buying footwear:
• Children aged between 0 and 3 years old
Parents buy the shoes and regard shape, suppleness and soles as important. They are willing
to pay for good quality to prevent problems with their child’s feet.
These children are similar to the above group, but family income and child’s preference starts to
play a role.
Although parents still buy the shoes they are increasingly influenced by what the child wants.
These children are heavily influenced by the media (e.g. music video clips) and the Internet (e.g.
social networking sites). Peer group pressure becomes important, and differences in tastes
between boys and girls becomes important in footwear choice.
• Teens aged between 15 and 19 years old
They are influenced by TV and style magazines and are aware of the latest fashion trends
and brands. Depending on the EU country, teens have quite a lot of money to spend, as
pocket money is high. They are attracted to adult footwear and international fashion styles,
especially US styles in casual footwear such as ‘sneakers’ and in sports footwear, fuelled by
the heavy advertising expenditure from Nike, Adidas and Puma.
Further differences can be discussed in relation to the changing trends within these segments. In
some countries, children’s footwear is taking a growing share of the total market, while the
Page 7 of 7
reverse is the case in other markets. Generally, the share taken by women’s footwear is
increasing at the expense of men’s footwear. Men’s footwear tends to be more expensive than
women’s footwear, but this is compensated by the fact that women by more pairs than men.
Table 1.3
Segmentation by footwear types in the major EU markets
in 2006, % value
Sports
Casual
footwear
footwear
60.0%
20.0%
Germany
50.5%
21.5%
France
42.7%
23.0%
United Kingdom
46.2%
18.5%
Italy
56.0%
21.0%
Spain
47.0%
21.0%
Netherlands
na
20.0%
Belgium
Source: Euromonitor, NPD, Trade Estimates (2007)
Formal
footwear
16.5%
26.3%
27.3%
29.0%
19.0%
28.0%
na
Evening
footwear
3.5%
1.7%
7.0%
7.3%
4.0%
4.0%
na
Table 1.3 illustrates differences between countries in the use of casual and formal footwear.
Other research organisations somtimes place a higher percentage of sales in sports footwear. As
noted earlier, there is sometimes confusion between classifications of sporting and casual
footwear.
1.3
Trends
Demand for footwear will always exist, due to the need to wear it. However, the extent to which
each type of footwear is worn, where, when, by whom and how often is subject to changing and
evolving tastes and trends. Some of these trends are created by footwear producers and
designers by developing a new type or style, which captures consumers’ imagination, or which
meets a need that was not previously fulfilled. However many footwear trends are influenced by
factors unrelated to this.
Trends can be broadly divided into those which are long term, ie they relate to changing
lifestyles and behaviour, and those which are short term, ie they relate to a seasonal change or a
specific event.
Trends also vary between EU countries, but the extent to which variations between countries can
be identified is reducing as greater convergence between countries takes place. Short term
trends are more likely to exist, but longer term trends are more likely to affect most countries.
Some differences between countries however are unlikely to be eliminated. For example, the
proportion of people wearing boots to cope with cold weather in Finland is unlikely to be
replicated in the Mediterranean islands of Cyprus or Malta.
Long term lifestyle trends
The single most important trend that has been and continues to increasingly affect the demand
for footwear is fashion and the media. Although it may appear that this is a short term trend,
fashion and the media is now so pervasive in many people’s lifestyles that a long term change in
behaviour and attitude to footwear has taken place. This trend has affected our motivation for
buying footwear, our frequency of purchase, the way in which footwear is merchandised and how
it is sold. The importance of this trend cannot be overstated. It also serves as a touchstone to a
wider audience. Whereas younger people, primarily women were influenced by footwear fashion,
this trend has become so established that men are showing increasing interest in fashion, and
older people are also starting to exhibit greater interest in fashion as a reason to buy footwear.
The following table illustrates the importance of footwear now as a fashion item, relative to other
items of clothing and accessories. It shows that shoes are now the most important fashion item
overall. It also highlights some significant differences between countries.
Page 8 of 8
Table 1.4
Expressed in
%
Belgium
Denmark
Germany
France
Greece
UK
Italy
Netherlands
Austria
Sweden
Spain
Western
Europe
Bulgaria
Poland
Romania
Czech
Republic
Hungary
Central
Europe
What items have to be the latest fashion?
Shoes
Jeans
Shirt/
blouse
Suit
Pants
(excl.
jeans)
Coat
Dress
Sweat
shirt/
Sweat
er
Hand
bag
Tie
27
29
28
33
38
32
29
30
35
40
23
29
30
25
19
23
32
27
32
23
30
21
27
34
23
17
24
25
15
36
23
12
17
15
10
11
9
19
17
18
11
11
13
9
28
24
12
19
16
24
14
13
16
23
21
11
8
7
9
8
11
14
4
4
23
6
7
9
10
8
13
10
8
9
13
7
9
19
6
17
10
5
8
9
8
11
21
10
5
5
3
4
9
13
7
6
6
6
7
3
3
6
2
3
6
4
6
2
2
3
30
36
35
45
26
16
20
15
21
16
28
14
13
18
20
26
18
15
9
22
9
4
11
9
9
7
17
8
11
4
8
6
6
5
8
5
4
1
2
2
28
38
18
21
27
13
11
20
12
15
4
6
7
15
7
12
4
4
1
2
37
18
22
20
14
9
13
7
6
2
Source: GfK Fashion Survey, 2007
28% of respondants said that their fashion inspiration came from TV. However, almost as many
regarded billboards, friends and family as sources of information on the latest trends. One in five
obtained information from fashion magazines or out and about in the streets or in clubs. One in
ten specifically mention stars and celebrities as their inspiration for the latest fashions.
Consumers are seeking out luxury. This is related to a more intrusive media and the importance
of celebrity. Many consumers see the type of footwear worn by TV and movie celebrities and
want to identify with these celebrities, who wear clothing and accessories designed and produced
by luxury brand names. Consumers look out for similar footwear that identifies them with a
luxury lifestyle. Footwear is now being produced that tries to replicate luxury items. The term
“affordable fashion” very much applies to footwear in today’s market. Brand names have an
association with luxury and quality, and the importance of branding in the market will also
continue to grow.
Population changes have an important bearing on the footwear market. Increasing numbers of
consumers over the age of 55 are increasing the demand for more comfortable footwear.
However, many over 55 year olds are also showing a greater interest in fashion than their
predecessors a generation ago. They are more active, generating more demand for sports
footwear. They are also more affluent, suggesting that they will account for a higher proportion
of the market expenditure in the future.
Other consequences of changing population trends include increased levels of migration between
countries of peoples of different languages and cultures. This will result in more variety in
footwear styles being demanded in more countries. The increase in single person households,
more childless couples and declining birth rates in many EU countries, will result in falling
demand for children’s footwear.
The trend of multiculturalisation implies that people are open and receptive to ideas from many
cultures and societies and they need to differentiate. Consumers are looking for something
different in their footwear designs. They want different types of footwear to express different
aspects of their individuality.
Page 9 of 9
Consumers are now more informed. This is a consequence of living in an information age, with
much information obtained from the Internet. Footwear retailers have to improve the quality of
their ranges and the service they provide consumers. Consumers are more critical and know
what they should expect at different price points. This point particularly applies to younger
footwear consumers, who are looking to get best value for their money. Footwear is increasingly
being purchased online. A recent survey suggested that footwear was one of the fastest growth
categories for online purchasing, although not for children’s footwear.
Eco-friendly has moved from a fad to an expectation. This trend is increasingly significant in
many markets. Younger people tend to be more insistent on this development. They want more
transparency in the footwear they are buying, what it is made of and the circumstances of its
production. Footwear designers are being required to build some form of sustainability or
recycling into the design or material used. This is on top of requirements for fashion, aspiration
and trend-setting design. “Sustainable fashion” has also found its way into the language of
footwear design.
Personal values are becoming more important in purchasing. This includes a desire for
authenticity. This means consumers are starting to place greater value on authenticity and
craftsmanship, and less on hype. This may see an increase in demand for hand-made footwear
and the return of traditional styles. Consumers are also becoming more individualistic, implying a
greater demand for non-standard designs. At the same time, people are placing more
importance on their home. This is likely to result in increased demand for footwear suitable for
indoor use.
Linked to this point, the increasing pace and complexity of life has resulted in a need for
nostalgia and a need to rewind. This has seen an increased long term demand for comfort and
overlapping styling from the past with a contemporary twist (meaning it should not look old). It
combines the smartness of today with the secure and reassuring feelings of the past.
Consumers are more active. Consumers want to get more out of their life and make better use of
their time. As well as the health trend that has seen demand for sports footwear increase
significantly in the past, other active pastimes such as walking and hiking will result in a long
term growth in footwear for this use. Part of this trend is the fact that consumers are taking
more holidays. This generally results in consumers buying new outfits for each holiday. This
includes shoes. Linked to this is a decline in beach holidays and a trend towards other types of
holiday, such as city breaks. This of course will increase demand for comfortable footwear.
Short term trends
These trends tend to be seasonal or short-lived, and often refer to changing footwear fashion
styles and designs. Some of these trends are cyclical. One year they may be popular, then they
lose popularity before becoming popular again a few years later. For example, bright colours in
leather and artifical leather footwear have been popular. It is predicted that the hard-edged
styles that have been in vogue will be replaced by soft colours and simpler styling with a more
relaxed feel.
However, there are examples of some footwear trends, which began as a short term product
opportunity, but have acquired an iconic status and become established as a footwear category
in their own right. The success of “Crocs” is a good case in point (http://www.crocs.com).
“Crocs” started off as a non-slip boating shoe. They are lightweight, comfortable, slip-resistant,
fashionable and functional shoes that can be produced quickly and at an affordable price.
Originating in the USA in 2003, they are now a global footwear phenomenon. They have 15
distribution centres globally and can manufacture 7.2 million pairs a month. Different styles have
been added such as a winter version, and more colours have been added to broaden their
appeal. Claims that the sole material prevents the spread of bacteria has led health professionals
to wear them. Their comfort and practicality has appealed to a much bigger audience than
Page 10 of 10
expected. A flag-ship store is open in the centre of London. Sales are also strong in Germany,
Italy and Spain.
Geox footwear (http://www.geox.com) has also become a sector in itself, and other companies
have introduced similar styles. This is essentially footwear that can breathe. The Geox company,
from Italy, initially developed the technology for footwear, in particular for sports footwear, to
overcome the problem of sweating feet, which causes foot odour. This technology has now
developed into clothing. The same company has introduced waterproof leather, which are
another example of how innovation can lead to success and a worldwide brand. Geox footwear
can be found in 68 countries and is distributed through over 10,000 multi-brand points of sale
and a network of over 700 single-brand Geox shops.
1.4
+
+
+
+
-
+
+
+
-
Opportunities and threats
The demand for leather is strong, due to its perception of quality. Opportunities exist in this
premium part of the market, particularly for those developing country producers that can
supply good quality leather at competitive prices.
The two case studies mentioned above also represent new opportunities, particularly
“breathable footwear”. Greater opportunities may also be found in niche footwear markets
such as outsized shoes, or indoor footwear. The demand for fashion footwear continues to
grow, but buyers need to see that you can offer a point of difference either in price, quality or
service in order to change their supplier. Opportunities exist for those producers that can also
demonstrate design capabilities and a sensitivity to the fashion demands of the EU market.
Consumers are more receptive to new designs and sources of supply, so exporters will
benefit from this more open environment. However, this means that consumers are also
equally receptive to your competitors’ products. You can obtain comparative advantage by
keeping up to date with developments in technology and advanced electronic methods of
doing business in the footwear industry.
The EU market now consists of almost half a billion consumers. This enlarged market in itself
will provide more opportunities.
On the other hand some of the new EU member states such as Romania and Bulgaria have
well-established footwear industries of their own. They will be hoping to maintain a presence
in their domestic markets as well as finding new markets for themselves in other EU
countries. These countries will provide tough competition for exporters, as they themselves
can produce relatively cheaply, and they do not have to worry about customs barriers or long
transportation logistics.
The trend to more fashionable footwear is an opportunity as it opens up the market to a
wider range of design styles and influences.
Developing country exporters are also well-placed to take advantage of the predicted growth
in sustainable footwear, assuming they are also able to meet the design standards required.
Increasing ethnic influences in footwear designs also will help developing country exporters
to be able to demonstrate a point of difference.
Some people in the EU think that the market has become saturated by imports. However, the
demand will always exist for competitively priced premium products, particularly if there is a
distinctive story or style in the product(s) involved.
“Origin marking” on a label e.g. “Made in Italy” or “Made in France” is becoming more widely
used by domestic producers as it has a higher perceived value than a product made
elsewhere.
Each opportunity should be thoroughly assessed in each specific market before proceeding
further.
1.5
Useful sources
See CBI market surveys on individual countries for contact details of important sources in
individual countries.
Page 11 of 11
•
•
•
•
At an EU level, the European Confederation of the Footwear Industry
(http://www.cecshoe.be) and the European Confederation of Shoe Retailers Associations
(mailto:[email protected]) are the main footwear trade associations.
Information is available from commercial research companies such as Euromonitor
(http://www.euromonitor.com), Mintel (http://www.mintel.co.uk) and Keynote
(http://www.keynote.co.uk)
Shoe Intelligence is a (subscription based) regularly information bulletin on the shoe
industry in the EU (http://www.shoeintelligence.com)
The GDS International Shoe Fair in Germany is the largest EU footwear fair. This tends to
allow a greater proportion of overseas exhibitors than other more design-focussed fairs in
Paris or Milan.
Page 12 of 12
2
Production
2.1
Size of production
In the last 20 years, global footwear production has increased by 75% from 8 billion to 14 billion
pairs, up from 1.6 per capita to 2.1 per capita. In 2006, 11.5 billion pairs were produced in Asia.
8 billion pairs were made in China, followed by India (950 million pairs) and Indonesia and
Vietnam (450 million pairs each). Just 5.2% of global footwear production takes place in the EU.
This is now also below the production levels in South America. Production in the USA and Central
America is well under half of EU levels. This region has experienced similar falls in their own
footwear industry as has been experienced in the EU. The US footwear industry has been hit
hardest, producing just 40 million pairs now, down from 500 million pairs 20 years ago.
In the EU today, there are approximately 18,000 producers employing over 350,000 people. This
has increased due to the 100,000 people that work in the footwear industry in Romania and
Bulgaria, whose production figures are now included in the EU.
Table 2.1
EU production of footwear 2002 – 2006, € million / millions of pairs
2002
value
volume
2004
value
volume
2006
value
volume
Average
annual %
change
in value
Total EU
20,267
994
17,138
845
16,014
727
-5.3
Italy
9,216
359
7,700
300
7,400
245
-5.3
Spain
3,120
198
2,435
147
2,059
118
-9.9
Romania
960
74
1,350
87
1,500
90
11.8
Portugal
1,758
99
1,471
85
1,339
72
-6.6
France
1,630
75
1,300
53
1,135
44
-8.7
Germany
1,103
35
900
28
727
25
-9.9
Austria
365
11
331
10
290
8
-5.6
Slovakia
122
10
229
15
250
17
19.6
Poland
293
38
286
52
245
40
-4.4
United Kingdom
637
27
269
13
239
11
-21.7
Hungary
170
22
120
15
105
13
-11.3
Finland
167
4
159
3
145
3
-3.5
Greece
151
6
147
6
142
6
-1.5
Bulgaria
90
7
92
8
120
13
7.5
Netherlands
112
3
92
3
82
3
-7.5
Denmark
70
6
48
5
53
5
-6.7
Sweden
42
1
34
1
31
1
-7.3
Slovenia
70
4
40
2
30
2
-19.1
Czech Republic
51
8
32
6
27
5
-14.7
Belgium
26
1
23
1
25
1
-1.0
Ireland
32
1
26
1
20
1
-11.1
Estonia
37
2
19
1
16
1
-18.9
Cyprus
18
1
12
1
10
1
-13.7
Latvia
10
1
9
1
9
1
-2.6
Lithuania
10
1
8
1
10
1
0.0
Malta
7
0
6
0
5
0
-8.1
Luxembourg
0
0
0
0
0
0
0.0
Source: Eurostat, National Statistics Offices, National Associations, Trade Estimates (2007/2008)
In 2006, total EU footwear production valued € 16,014 or 727 million pairs, down by an average
annual 5.3% in value and 7.5% in volume since 2002. The top five producers accounted for 84%
of all production value (78% of volume). Within the top five, only Romania is increasing its
production levels. Production has fallen in Italy, Spain, Portugal and France since 2002. However
a slight increase was seen in Italy, the largest producer, between 2005 and 2006.
Page 13 of 13
For confidentiality reasons not all production figures are declared, and there is a significant
element of non-official (either undeclared or smuggled) trade, which also does not show in the
official figures. Nevertheless, while production in all segments has been falling overall, there are
some variations that may be significant. Leather footwear accounts for 69% of the production
value, up from 66%. Due to the signifcant volume of parts in the total EU figures, leather
production volume has been constant over the period at 22%. Other footwear, dominated by
footwear parts, accounts for 69% of all volume, a slight increase since 2002, and 22% of
proudction value, again an increasing share. Textile footwear production is in decline, from
approximately 7% of production in 2002 to 6% in 2006. Rubber or plastic footwear production
accounts for 3% of value but its volume share is now around 2%.
The downward fall in the size of the EU production industry is expected to continue. However the
rate of decline is likely to slow down as the EU industry adapts more effectively to the global
trading environment. The other factor is that footwear is closely linked with the leather industry,
which itself has been suffering from both competition from lower cost imports and competition
from leather substitute products and other new, less expensive materials.
The southern and eastern parts of the EU are the areas where footwear is most strongly
established, partly due to lower labour costs, but also for historical reasons where expertise had
developed over many years. Relationships between countries also exist in how footwear is
produced, for instance the relationship between Romania and Italy for footwear parts. These
relationships have also been tested by the competition from lower cost imports.
The EU footwear industry, which is predominately located in southern EU countries, feels it is
disadvantaged by the excessive power of Northern European countries, which they feel have
more power to influence the EU policy makers in Brussels. The footwear industry feels that the
issue of keeping prices as competitive as possible for consumers favours the interests of large
retail chains, large importers and multinationals, without taking notice of the needs of the
traditional manufacturing sector. However, not all producers agree with this, and the antidumping duties on certain imports from China and Vietnam have had a mixed reaction. They will
not reverse the trend of increased Asian imports, nor will they prevent the exodus of production
from the EU to lower cost sources of supply.
Previously strong footwear industries in parts of Eastern Europe, which supplied the former
Soviet Union, have collapsed and have not been abale to adapt to the new market environment.
For example, the previously large Czech footwear industry is a shadow of its former self, while
neighbouring Slovakia has emerged as a more flexible industry that has formed links with other
western EU states.
Northern EU member states have all suffered major reductions in their footwear industries, but
the industry has not been such a major source of employment. The remaining industries in these
countries have adopted different survival strategies, ranging from a focus on exporting, to
outsourcing to some new member states, but primarily to lower cost Asian economies, and
concentration on specific niche products or design styles.
2.2
Trends
It is too early to say whether the anti-dumping tariffs imposed on selected footwear imports from
China and Vietnam will have a major impact on the footwear industry in the EU. While there are
indications that the measures are having an effect on footwear prices in the shops (average
prices are starting to increase), there is little evidence yet of a reversal in the trend of downward
production. There is no evidence of the impact of these duties in the import figures for 2006.
They should be evident in 2007 figures. However, there is some anecdotal evidence of some
switching of supply to other low cost countries and some confidence in some parts of the EU
footwear industry that the measures at least will provide some respite against the extent of low
cost products coming onto the EU market.
Page 14 of 14
•
•
•
•
•
•
•
•
2.3
+
+
The most noticeable trend across the major footwear producers in the EU is a focus on
exporting. While many domestic markets are struggling under the weight of low cost imports,
EU producers are discovering that they can find markets in other EU countries but also in
emerging economies with a growing middle class population in other parts of the world. The
leading producer countries have all embarked on a campaign of “origin marking” to help their
sales efforts in both domestic and overseas markets. “I love Italian shoes” and “made in
Spain” campaigns have spread to other producer countries such as Portugal.
As important as maintaining a production base is maintaining control over distribution.
Manufacturers have not only to compete with low cost producers, they also have to content
with the growing power of major retailers, who are influencing the shape of the footwear
market in ways not seen previously.
In order to take advantage of these export opportunities, manufacturers have had to
significantly streamline their operations, as well as invest in the latest technologies to ensure
optimum production conditions are achieved. This has been difficult for some smaller
producers, who have either closed down or joined forces with other producers to be able to
afford to make the necessary investments in order to survive. This has meant more
takeovers and consolidation in the industry, as well as greater cooperation between
companies to share costs and ideas in their joint threat against low cost competition.
Outsourcing has been a trend for a number of years now. Many of the leading footwear
brands that originate in the EU have production facilities throughout the world, depending on
the location of their main markets. However, the majority of larger production facilities have
been outsourced to Asia, and China in particular. Interestingly one justification for
outsourcing to China has been to be in a position to supply the vast, emerging Chinese
market, where the number of affluent consumers is forecast to expand dramatically in the
coming years.
Underpinning these cost saving measures, the buzz words in footwear production are
innovation, flexibility and added value. While partial or total production has been outsourced
in many cases, control over research and design has remained in the EU. These are seen as
the main sources of added value and new product innovations. The success of Geox footwear,
described in chapter 1 is a good case in this point.
Greater emphasis on training, technological development and scientific research throughout
the remaining major EU industries is also seen as an important way to maintain an element
of comparative advantage. All the leading footwear manufacturers, as well as the trade
associations invest heavily in this area.
The fashion industry has an even greater influence over production trends today. There are
close connections between the fashion industry in Italy and its large footwear industry.
However previously the footwear industry has worked with changing fashions twice a year.
Now fashion changes are faster and more ad hoc. The influence of media and celebrities on
footwear styles has meant that EU producers have also had to adapt to a much more rapid
turnover in footwear styles and lead times are greatly reduced.
Environmental concerns continue to move up the priority list for footwear producers.
Consumers are increasingly demanding eco-friendly footwear. This has meant a much greater
focus on developing non-animal hides and even stricter controls on the use of chemicals and
non-polluting emissions in the production process.
While the EU industry fights to defend its domestic markets, it is also attempting to gain new
export markets. Many EU consumers are loyal to their own domestic industries and will try to
support them where they can. The part of the market that the EU feels it is in the best
position to defend is the premium quality end of the market. Although this will make it harder
to gain a foothold in the more lucrative premium end of the market, it will make it easier for
exporters to enter the lower-end of the market, which is more price driven.
As the EU industry cuts its costs, there will be opportunities created by forming working
partnerships with companies who still wish to keep control of their business but who would be
prepared to outsource production to a lower cost economy. The best form of partnership is
likely to be with an EU company with a similar approach to business as yourself, and one that
Page 15 of 15
+
-
2.4
operates in a niche market. This may provide you with the best opportunity to demonstrate
your value and distinctiveness.
The attitude in some parts of the EU to some of the very large suppliers is quite negative.
Opportunities may exist for suppliers from smaller countries who are seen to be less of a
threat. Some buyers may be prepared to switch suppliers if their requirements can still be
met by smaller producers.
The EU industry is increasingly adapting itself to the demands of the global marketplace. This
will provide a threat to exporters from developing countries. DC exporters need also to keep
up with new production technologies, and ensure that their own businesses are efficient.
To be in the best position to take advantage of these opportunities, you need to be flexible
in your production, to be reliable and meet demands of short lead times.
The new member states with their own footwear industries, especially Romania and Bulgaria,
represent a threat to developing country exporters. These countries will wish to develop
inroads into other EU markets. They would have anticipated this as part of the benefits of
joining the EU in the first place.
Useful sources
See individual country reports for specific production information by country and interesting
players in each country.
•
•
•
•
The European Confederation of the Footwear Industry (http://www.cecshoe.be) is the
organisation that represents producers in Europe.
There is information on the EU footwear industry on the European Union website at
http://ec.europa.eu/enterprise.
Production data can be found on the European Union website. Go to
http://epp.eurostat.ec.europa.eu/nextweb/ and follow the links as outlined in chapter 4. You
will see an option for production alongside external trade.
The Footwear Association of Importers and Retail Chains (FAIR) represents the interests
of more than 100 footwear companies (http://www.fair-eu.org). It was set up to represent a
particular position for certain importers and retailers in respect of the anti-dumping tariffs.
Page 16 of 16
3
Trade channels for market entry
3.1
Trade channels
The route from manufacturers to consumers in the EU footwear trade varies, but leading brands
and large specialist and non-specialist chains are increasingly dictating supply routes. As shown
in Figure 3.1, consumers can buy footwear in many different ways, for example at a retail outlet
(shoe shop, chain store, sports shop, clothing shop, discounter, hypermarket etc.), at a market
stall, a factory outlet, by mail order or by the Internet. This wide outlet choice has affected the
distribution structure. In most countries, the traditional route from manufacturer to
importer/wholesaler to retailer still dominates, particularly in southern EU countries and the new
member states that have many small footwear shops. The importer or wholesaler usually holds
footwear items in stock.
In the middle and northern EU countries small retailers often try to improve their buying power
and competitiveness by joining a buying group, which negotiates directly with manufacturers and
holds stock for their members. However there are still buying groups that purchase from
importers/wholesalers. In larger EU countries, in addition to buying groups, the large retailers
operate chain stores. These operations have considerable buying power, they buy directly from
overseas manufacturers. Most chain stores stock footwear in their distribution centres and
operate throughout Europe. They are rapidly expanding in the new EU member states.
Page 17 of 17
The main distinction in the market in terms of distribution or source of supply is between
specialist distribution and non-specialist distribution.
In specialist distribution the product is handled by specialised intermediaries (buying groups,
importers/wholesalers, agents and local suppliers) and retailers who primarily deal in different
types of footwear. Large retailers often buy direct from foreign manufacturers. Specialist
retailers represent approximately 60% of the distribution of footwear in the larger EU markets
(see Table 3.1), and they are organised in the form of large chain stores or buying groups, or
are small independent stores. In most other EU countries this ratio is higher. However the
proportion of footwear specialists is generally declining in the face of the growing nonspecialist sector. There is a major trans-national aspect to specialist footwear chains, and
non-specialist chains. In many instances, purchasing decisions are taken in the country of the
retailer’s parent company. However, you should approach the local office of the affiliate in the
first instance. This can vary between different retailers.
In non-specialist distribution footwear is just one of many products handled by the retailers in
question. They buy from specialised intermediaries, through their own intermediaries or direct
from foreign manufacturers. Non-specialist retailers include sports stores, clothing stores,
department stores, super/hypermarkets, mail order, Internet and other outlets such as
market stalls. This channel represents about 40% of footwear distribution in the larger EU
markets and has grown rapidly due to consumers increasingly looking for more interesting
types of retail outlets. They wish to make their shopping experience more stimulating.
Trade channels
For exporters in developing countries, the physical distribution of footwear can be a problem.
When exporting footwear for the first time, importers or wholesalers are the best channels. They
have a good knowledge of the market and provide the safest and most effective method of
distribution for exporters from developing countries. Once you have developed your sales to a
certain point, you could either expand your business with your importer or consider making an
investment by supplying direct from your own warehouse. You can get help with this from a
specialised logistics company in the EU.
Importers
By buying on his own account the importer takes title to the goods and is responsible for
their onward sale and distribution in his country and/or in other EU markets. Those importers
who are not exclusively tied to a brand manufacturer usually buy and sell the goods, take care of
import/export procedures and hold items in stock. Many importers sell directly to specialist
retailers, department stores, sports or clothing shops through permanent exhibition centres,
while others have their own sales staff who visit retailers on a regular basis and take orders.
The importer has contacts in the local market, knows the trends and can supply considerable
information and guidance to the overseas manufacturer. The development of a successful
working relationship between manufacturer and importer can lead to a high level of co-operation
with regard to appropriate designs for the market, new trends, use of materials and quality
requirements. Some importers also act as wholesalers.
Wholesalers
Wholesalers often supply independent or specialist footwear shops and play a major role in the
supply of a particular type/style of footwear. They often specialise; e.g. ladies’, children’s or
sports footwear, or in indoor slippers, but they usually carry a wide variety of products. The
trend of bigger retailers and buying groups going outside the traditional distribution system has
caused wholesalers to reconsider their position in the distribution structure. This has encouraged
some wholesalers, who are losing business as more trade is made directly between large
manufacturer and large retailer, to move from a national operation holding a wide product range
to operate on a regional basis or in a more product-specific manner.
The following other channels are good alternative distribution channels for exporters:
Page 18 of 18
Agents
In your own country there are buying agents. These are independent companies that act on
the instructions of their principals and function as intermediaries between buyer and seller.
They do not buy or sell on their own account. They work on a commission basis and represent
one or more larger manufacturers/suppliers/retailers, although competition is avoided. Often
the buying agent has his office in the supplying country.
In the target country there are selling agents. They work on a contract and commission basis for
one or more manufacturers. Some of them sell from stock in order to meet their clients' shortterm demand, which is on a consignment basis. If an agent builds up his own stock, he is in
effect functioning as a wholesaler or distributor.
Buying Groups
These groups act as purchasing agents for their individual members (retail shops) and are
promoting themselves as an organisation with their own marketing and brand. They also act as
financial intermediaries between manufacturers and retailers. Before each season starts, footwear
ranges are selected by committees which are made up of members of the buying group. The
largest European buying groups are Ariston Nord West Ring, Garant Schuh+ Mode and Euroshoes.
Intersport is the largest buying group for sports footwear.
The objective of the buying group is to enable its members to deal with the growing power of large
footwear chain stores and discounters. As a group, they also have the necessary buying power to
obtain greater discounts from suppliers. They tend to be more commonly found in the northern EU
countries. Some retailers who are members of buying groups carry the name of the buying group as
part of their fascia (eg Intersport), while other buying groups do not use their name publicly.
Local suppliers
Faced with rapidly rising production costs, manufacturers are increasingly assuming the
additional role of importers. Like importers they look for low-cost sources that produce footwear
on a made-to-order basis. They sometimes buy in parts or buy some components. The main
advantage is that this footwear can be made according to their own design, quality, private label
and colour specification. Some footwear suppliers operate their own retail outlets in their local
market as well as in other EU countries, such as CJ Clarks (based in the UK), Eram (France),
Salamander (Germany) or Ecco (Denmark). There are also clothing suppliers such as New Look,
Esprit, Mexx, and H&M who have added footwear to their product ranges.
Big brand suppliers
Most of the big brand manufacturers have their headquarters in the USA or in the EU e.g. Adidas,
Nike, Puma and All Star. These suppliers have their own design, product development, marketing
and purchasing departments. They have buyers who operate all over the world and outsource
their footwear mainly outside the EU, especially in China, Vietnam, Indonesia or in other
(developing) countries. Sales, marketing, order control, logistics and service are done by their
exclusive importers in each EU country.
The actual distribution of the footwear by the larger suppliers is controlled by a distribution centre.
Most centres have advanced order control systems and are able to supply footwear to any EU
country within 48 hours. Deliveries can be made to importers/wholesalers, buying groups, large
retailers or to their own single brand stores, especially common in sports footwear, which are
sometimes referred to as concept/flagship stores. These stores are strongly represented in France,
Italy, the UK and the Netherlands and are expanding in other EU countries.
Footwear suppliers are increasingly finding that they need a retail presence in order for their
brand to be recognised, to be distinctive and to engage directly with consumers. Branding is
increasingly important in this market and retailing is seen as a key medium through which a
brand name is communicated. This is also seen as a key means of internationalising a brand.
Page 19 of 19
Factory outlets
Factory outlets are an example of vertical integration established by manufacturers/suppliers to
sell ‘out of date articles’ from unsold stock direct to consumers, and are growing in importance in
the EU. Due to a lack of adequate legislation, they are a serious threat to retailers, especially in
Italy, Portugal and Belgium. Here, FOC (Factory Outlet Centre) schemes are being built closer to
major cities and there is no clear definition of the goods that are allowed to be sold in these
centres. Usually, last seasons stocks are sold and direct competition with the current season’s
footwear is avoided. However not all consumers can appreciate the difference between one
season’s styles and the next.
See Chapter 3 of the CBI Export Guidelines for more information on the selection of the best
channel to best suit your own circumstances.
Retailers – footwear specialists
Footwear chain stores: These specialist stores are usually part of a national or international
chain store or franchised operation under the same name and a central management. Chain
stores represented 22 – 34% of footwear sales in the UK, Belgium, the Netherlands, France and
Germany – see Table 3.1. Some large chains include Deichmann (Germany), Vivarte (France)
and Macintosh (the Netherlands).
Most chain stores have standardised product ranges and are located on the high street or at
out-of-town shopping centres. Because of volume discounts from their suppliers, they can offer
items at low to medium prices. These stores have been doing well in most EU markets.
However, footwear chains have suffered from competition from (footwear) discounters and
sports and clothing shops during the past few years. In addition, some chain store retailers
have reached saturation point in their own country due to local market conditions or planning
restrictions in respect of shopping centres and have looked abroad for expansion. This partly
explains their rapid expansion in the new member states.
Table 3.1
Share in footwear sales by retailers in the main EU markets in 2006
Footwear specialists
Chain stores*
Buying groups
Small shops
Non-specialists
Department stores
Super/Hypermarkets
Sports shops
Clothing shops
Internet/mail order
Others**
Germany
France
UK
Italy
Spain
Netherl.
Belgium
51%
22%
22%
7%
49%
16%
4%
13%
7%
5%
4%
56%
24%
13%
19%
44%
3%
8%
20%
4%
5%
4%
43%
33%
3%
7%
57%
3%
5%
16%
28%
4%
1%
57%
8%
12%
37%
43%
4%
6%
12%
6%
2%
13%
70%
15%
9%
46%
30%
11%
3%
8%
4%
1%
3%
77%
38%
29%
10%
23%
3%
2%
11%
3%
1%
3%
74%
31%
23%
20%
26%
2%
3%
10%
5%
1%
5%
* Includes multiples, franchised stores and chain boutiques
** Includes market stalls and factory outlets
Source: Euromonitor, ICEX and National Trade Associations (2007)
Boutiques
Footwear boutiques sell special or unique footwear ranges, including new ideas in footwear
which is both fashionable and aspirational. In recent years, the consolidation of large luxurygoods groups has led to new fashion brands being launched into the market. Top fashion
houses are increasingly designing and developing their own footwear ranges. Fashion boutiques
are well represented in France, Italy and Spain. Most are independently owned, and many are
joining buying groups, franchises or chain stores in order to meet competition from nonspecialists.
Page 20 of 20
Small independent shoe shops
In the southern and eastern EU markets small shops are well-represented, as is shown in Table
3.1. However in the middle and northern EU markets the involvement of small shops in the sale
of footwear is confined to specialist niche products and high quality footwear. Some smaller
shops, which know the latest trends in fashion, sell some designer footwear in order to attract
younger people to their stores. These are similar in many ways to boutiques (see above).
Most specialist shops have to cope with issues such as more demanding consumers, more
competition from non-specialists and discounters and cheap imports. In order to differentiate,
footwear specialists are continually seeking new sources to develop their own exclusive
collections.
Stock control and range development more important
A major challenge for footwear retailers is stock control. Sophisticated systems can assist in the
process of maintaining manageable stock levels when manufacturers are continually bringing in
new products with no proven guarantee that they will sell through. Finding the correct balance
between proven best sellers and new merchandise is difficult, particularly when consumers are
becoming increasingly fickle. Consumers are continually looking for and expecting to see new
ranges, so some retailers are tempted to stock all new styles of footwear.
Retailers – non-specialists
Non-specialists have greatly developed their footwear sales in recent years, as footwear is seen
as one of a range of accessories and not just for specialists. Many non-specialist retailers have
considerable buying power and have also attracted customers with lower prices. The increased
sales made by all these outlets in the past few years illustrates the shift from formal to casual
footwear. With the exception of clothing shops, non-specialists have started to sell sports
footwear, followed by slippers, flip-flops, sandals and all sorts of casual footwear.
In 2006, non-specialist retailers accounted for around 40% of footwear sales and were
particularly well-represented in the UK (especially clothing shops), Germany (department stores),
and France (sports shops).
Department stores are important in the footwear market. The German Karstadt (90 stores),
Kaufhof (127) and the Spanish El Corte Inglés (69) in particular are leaders in the EU.
They have footwear departments and concessions (shop-in-shop) in their stores, including their
own brand. Department stores in other countries include Galleries Lafayette (France), John Lewis
(UK), Coin (Italy) and V&D, Bijenkorf (the Netherlands), which also carry a wide range of
footwear.
Hypermarkets, supermarkets and discounters have grown in importance. They have had a
major influence on the increased price competition in the whole market, with (footwear)
discounters selling at low prices. Like most department stores, they concentrate on fast-moving
footwear for the whole family and seasonal items. Some large retail organisations e.g. Carréfour
(France), Metro and Aldi (Germany), and Tesco (UK) have footwear manufactured in low cost
countries. In doing so, they are able to avoid the additional costs of using wholesalers or importers,
thereby increasing their profit margins. This also enables them to pass on savings to consumers in
the form of lower prices.
Sports shops
These are strongly represented in France and the UK. There are several types of sports retailers:
Chain stores have grown along with the growth of out-of-town shopping centres, and are now
well represented in the larger EU markets. The more general type of chain stores carry the major
sport footwear brands. Their main target groups are recreational sportsmen or women. In 2005,
Décathlon was the largest chain store operation with huge outlets throughout the EU (sized
between 2,000 and 10,000 m²). Decathlon is followed by Sports World (UK), JD sports (UK), JJB
Sports (UK), and Go Sport (France).
Page 21 of 21
Franchised stores are more common in France. Recently they have opted for more specialisation
in one particular field of sports e.g. sliding sports (e.g. Quai 30). Unlike buying groups, the format
for these outlets is centrally owned.
Buying groups of which the largest EU group is Intersport. Their family focussed stores offer
‘expert advice’ on sports. Sport 2000 is the second largest EU buying group. They are more fashion
focussed. Other major buying groups include Twinner/Technicien du Sports, who mainly operate
in France, Italy and Spain. Retail outlets that belong to buying groups continue to be
independently owned by the retailer, but they are committed to buying stock exclusively from the
buying group to which they belong.
Independent sports shops can be sub-divided into single sports shops and fashionable sports
shops – see also the EU market survey ‘Sports and camping goods’.
Clothing stores
In the UK clothing stores accounted for 28% of footwear sales, which is high compared to other
EU countries – see Table 3.1. International and national chains play a major role in selling
footwear. These store groups usually have their own branded collections in addition to seasonal
collections from manufacturers. Young consumers tend to buy footwear at the same time as new
clothes as part of a ‘look’. Others buy footwear on impulse.
Well-known clothing chains that stock footwear include H&M, Zara, Next, Caroll, Kookai,
Didi, Guess, Mexx, Esprit, Wallis, Oasis, Dorothy Perkins, Top Shop, Cisalfo, Krizia, Cacharel,
Cotarelli, Cortefiel and Mango.
The Internet is becoming a significant source of information as well as direct purchase. Mail
order companies and retailers have created Internet sites for footwear. With technological
improvements such as interactive TV, this sales channel is likely to grow. However, there are still
many consumers who prefer to be able to try out items before they buy and are suspicious about
giving their credit card number, especially when buying from overseas companies. This is also a
significant issue for children’s footwear. Many parents want to have a specialist measure their
children’s feet in order to ensure their feet develop properly. The Internet is not perceived as
suitable for this segment at present.
3.2
Price structure
When entering the target markets, successful pricing is a key topic in the market entry strategy.
Pricing is the only area of the strategy that generates revenues for exporters. All other activities
are costs.
Price is the first point of comparison when evaluating your product against the competition. Due
to oversupply and competition, prices for mainstream footwear have been under greater
pressure. Large retailers have exacerbated this problem in the footwear supply chain by
purchasing in substantial quantities.
An exporter from a developing country would be advised to concentrate on the exclusiveness of
his footwear e.g. introducing original footwear which meets the style, design, size and comfort
needs of a specific target group. In this case, price is less important. Try to avoid being regarded
as another cheap supplier from a developing country.
Key issues in price structure
- The trade channels with typical mark-ups of each channel and retail category.
- Retail prices of competitors’ products in your target markets.
- Discount structure and credit terms offered by local competitors
- The production costs, incoterms, import duties, VAT level and other costs.
- Additional costs for product adaptation, packaging, marketing and promotion etc.
Page 22 of 22
- The most ‘reasonable’ or ‘tactical’ price level according to some of your local contacts in the
field (agents, other exporters from your country, store managers).
In the case of trial orders, which are delivered for the first time, sometimes a discount is given
to buyers and freight is prepaid. Once prices are negotiated and the target markets are
identified, it is important to keep control and avoid large differences between prices in each
target market, as many of them use the same currency, making for easier price comparison.
Margins
Margin maintenance is vital along with cost control. For retailers it is important not to erode the
margin too much when making price promotions. In several EU countries, this has led to some
stores being declared bankrupt. Successful retailers have the right balance between cost control,
good retail margins and good buying.
Margins at retail level
The typical mark-up for retailers averages between 55 and 75% - see the price calculation
example in Table 3.2. This includes value-added tax (VAT), ranging between 15 and 25%
depending on the EU country. Actual margins can vary widely around these averages depending
on the exclusivity of the product, the level of demand and the type of store selling footwear.
For example, high street chain stores are often in expensive locations, carry a wide assortment
and have many sales staff, which is also reflected in a higher margin. On the other hand,
margins of large retailers such as Vivarte or Deichmann are lower. They often have less sales
staff, buy direct from manufacturers and are usually located at out-of-town locations. The more
self-service exists, the less overhead that is incurred by the retailer. Retailers also need to allow
for heavy discounting during the winter and summer sales periods. This is important as a high
proportion of sales takes place in these periods.
Margins at importer/wholesale level
Wholesalers and importers base their costing on a CIF base. This means that their landed cost is
the FOB (Free on Board) plus transport to his warehouse and insurance and possible import duty.
The importer/wholesaler mark-ups average between 30 and 40%. Depending on the
circumstances, there is also a wide variation around these averages. In principle, importers try to
maintain fairly close control over recommended retail prices, but oversupply and the success of
footwear discounters has made life difficult for some importers. Mark-ups as low as 15% and as
high as 60% have been recorded.
Look carefully at your costing before making your quote to importers, particularly if they supply
footwear to the low end of the market e.g. department stores, mail order etc. You may,
alternatively, try to find importers who operate in the medium to high range market, supplying to
small footwear shops, buying groups or to boutiques.
The following Table 3.2 indicates the effect of low and high margins on the final consumer price,
based on a CIF price of 100 for a pair of footwear with leather uppers. The final consumer prices
can be compared with the price level of similar items of competitors.
In this example using notional figures for simplicity, a mark-up is set, covering overhead costs
(e.g. housing, personnel, selling and general expenses, own profit), which is estimated at 35%.
Also, the breakdown of the cost price by material, direct labour and other cost is just made up
here. The typical average commission rate for an agent is 10 to 15% of sales:
Page 23 of 23
Table 3.2
Calculation of final consumer price
Material cost (incl. 15% for unsold stock)
Direct labour cost (incl. design costs)
Other cost (e.g. packaging, promotion, sample shipments)
Cost price
Mark-up (overhead costs incl. own profit e.g. 35%)
Export price (FOB)
Import duties* (e.g. footwear with leather uppers 3.5%)
Other costs (e.g. transport, insurance, handling, banking)
Landed cost of CIF price
Importer's/wholesalers mark up (e.g. low: 30%, high 40%)
Importer's/wholesaler's selling price
Retailer's mark up (e.g. low 55%, high 75%)
Net selling price
VAT (e.g. 19% in The Netherlands)
Final consumer or retail price
Ratio CIF price - Consumer price
Low
High
25
25
15
65
23
88
4
8
100
30
130
72
202
38
240
2.4
25
25
15
65
23
88
4
8
100
40
140
105
245
47
292
2.9
Competitor
?
?
* If the GSP tariff is applicable for your country, the import duty can be reduced to zero.
Margins by manufacturers who are retailers
Margins tend to be higher for manufacturers who are also retailers, than those who only operate
in the retail sector. It is unlikely that exporters from developing countries would supply this
channel, as these manufacturers have their own supply sources. The main reason for this is that
they have to build in advertising costs, product research and development costs and other brand
building costs not normally associated with pure retailing.
See also in the CBI market surveys on individual countries and Chapter 3.1.4 of the CBI Export
manual ‘Your guide to market research’ for more general information on pricing.
3.3
Useful sources
It is useful to contact specific operators in each of the distribution channels. To get a good idea
as to how they operate, or to find advice, it is recommended you talk to other people you know
who have looked into exporting footwear to the EU.
•
•
•
•
There is an umbrella organisation, called the European Confederation of Shoe Retailers
Associations (CEDDEC) that represents the interests of footwear retailers in Europe.
The main objectives are to determine and defend the common interests of its members
and to provide these members with general information about the market and laws of the
sector. You can contact them by email at mailto:[email protected] or visit their website
http://www.cecshoe.be
An Indian company called Exim Infotek publishes a directory of European importers of all
types (http://www.eximinfo.com).
You can find agents or trade representatives through local trade associations, chambers
of commerce, fashion centres and trade directories.
Names and contact details for the major players in each of these distribution channels
can be found in the CBI market surveys on individual countries.
Page 24 of 24
4
Trade: imports and exports
Trade statistics in this Chapter are taken from Eurostat. Eurostat bases its statistics on
information from the Customs and EU companies, which is given on a voluntary basis. Not all
transactions are registered, particularly intra-EU trade such as those by smaller countries and
transactions from non-EU sources. Consequently intra-EU trade tends to be understated. On the
other hand, figures for trade between the EU and the rest of the world (extra-EU) are accurately
registered, and therefore more precisely presented in these statistics. Nevertheless they must be
treated with extreme caution and are only intended to give an indication of trade flows in the
international footwear market.
4.1
Total EU imports
The EU is the world’s largest importer of footwear, approximately 25% more than the volume of
USA imports, the next largest importer. EU imports in 2006 were valued at € 26,244 million, or
2,942 million pairs. The 3.9% average annual increase in value since 2002 compares with a
more significant 11% average annual increase in volume. These two key figures illustrate the
increasing role that imports are playing in the EU market, as well as downward pressure on
prices, particularly up to 2004.
Table 4.1
EU imports of footwear 2002-2006,
€ million / millions of pairs
Total EU, of which from
Intra-EU
Extra-EU ex. DC*
DC*
2002
value
volume
2004
value
volume
2006
value
volume
22,524
11,776
3,270
7,478
22,731
11,892
2,580
8,259
26,244
13,156
2,063
11,025
1,918
643
233
1,042
2,507
724
205
1,578
2,942
745
115
2,082
Average
annual %
change in
value
3.9
2.8
-10.9
10.2
Source: Eurostat (2007)
*Developing countries
Between 2002 and 2004, total imports were virtually unchanged in value, with the majority of
the growth coming in the period since 2004. In fact some of the leading EU countries registered
falls in value up to 2004, before recovering. The majority of the growth has come from some of
the new member states, with one or two notable exceptions such as Germany and the UK (see
footwear country reports for more detail). The major source of import growth has been from
developing countries, whose share of imports has increased from 33% by value (54% by
volume) in 2002 to 42% by value (71% by volume) in 2006. Intra-EU trade still accounted for
half the value of imports, but just a quarter of import volumes. Intra-EU trade has been
maintained partly by the recent expansion of the EU itself. The trend appears to suggest that
developing country imports, already dominant in volume terms, will soon be the largest value
sector of imports.
These significant increases in volume have not been accompanied by similar increases in
consumption. Although the EU market has been growing overall, a large proportion of this
growth in imports has come at the expense of the EU’s own footwear industry. Betweeen 2002
and 2006, according to Eurostat, EU production value decreased by an annual average of 5.3%,
while EU production volume decreased by an annual average of 7.5%.
4.2
EU imports per product group
The main product groups are shown in the next four tables. Note that imports by product group
for individual member states are provided in the CBI market surveys on the respective countries.
Page 25 of 25
Footwear with leather uppers
Footwear with leather uppers represented the largest product group, as shown in Table 4.2,
accounting for 60% of the imports by value (34% by volume, or 966 million pairs). The higher
value reflected the higher prices paid for footwear made from leather. Within this group, outdoor
footwear with outer soles made of products other than leather was the pre-dominant sub-group
(816 million pairs). These have been increasing at 5.5% year on year over the period, compared
with the sector as a whole that has been increasing at the rate of 4.8% per annum. Imports of
indoor footwear made of leather was the only sub-sector to decrease over the period.
Over half the imports of this product group were from within the EU, although these have been
increasing at the rate of 3.6% per annum over the period, compared to 4.8% for the sector as a
whole, and 13% per annum for imports from developing countries. Italy was the largest EU
supplier to the EU (€ 2,390 million in 2006), and the largest overall in value terms, although
their 91 million pairs was less than half the 202 million pairs which arrived from China. The two
newest EU members are shown as extra-EU suppliers in these tables. It is noted that both new
member states, particularly Romania, are important suppliers in the footwear market. Over the
period, extra-EU supplies (excluding developing countries) decreased by 7.6% year on year, and
supplies from the USA more than halved.
Developing country imports were valued at € 5,409 million in 2006 or 501 million pairs. China
was the largest developing country supplier of footwear with leather uppers, with supplies of
€ 1,893 million in 2006, up by the equivalent of 29% each year from € 682 million in 2002. The
volume increase was even greater at 35% per annum from 61 million pairs in 2002 to 202
million pairs in 2006. Vietnam was a larger supplier than China in 2002 (€ 996 million or 84
million pairs). Their import value is now € 1,110 million, or 105 million pairs. Supplies from India
and Brazil increased significantly over the period while supplies from Indonesia increased at a
lower rate. Tunisia has overtaken Morocco as the largest volume supplier from North Africa,
although they have similar values. Supplies from Croatia decreased. Bangladesh, Albania,
Cambodia and Moldova were smaller suppliers that increased over the period.
Table 4.2
EU imports and leading suppliers for footwear with leather uppers
2002 - 2006, share in % of value
Total EU,
of which from
Intra EU
2002 2004 2006
Leading suppliers to EU in 2006
€ mln € mln € mln Share in %
12,955 13,049 15,646
7,711
7,631
Extra EU ex. DC*
1,878
1,650
DC*
3,366
3,768
8,867 Italy (15.3%), The Netherlands (7.1%),
Belgium (6.3%), Portugal (5.9%), Spain
(4.6%)
1,370 Romania (5.5%), Switzerland (0.8%), Bulgaria
(0.7%), Macao (0.6%), Hong Kong (0.4%)
5,409 China (12.1%), Vietnam (7.1%), India (3.7%),
Indonesia (2.5%), Brazil (2.2%), Thailand
(1.3%), Morocco (0.9%), Tunisia (0.9%),
Bosnia Herzegovina (0.5%), Croatia (0.5%)
Sports
794
792
825
Indoor
132
128
128
Outdoor leather outers 1,780 1,867
1,989
Outdoor other outers
10,249 10,262 12,703
Share
(%)
56.7
8.7
34.6
5.3
0.8
12.7
81.2
Footwear with plastic or rubber uppers
The next largest product group was footwear with plastic or rubber uppers, as shown in Table
4.3, valued at € 4,208 million in 2006, equivalent to a 5.3% annual increase since 2002. This
represented 1,018 million pairs in 2006, an even greater annual increase of over 15% since the
572 million pairs imported in 2002. This represented 16% of total imports by value (36% by
Page 26 of 26
volume). Within this group, outdoor footwear was the dominant sub-group. However, sports
footwear with plastic or rubber uppers showed the largest average annual increase of 6.6%,
although the volume imports of this sub-group was slightly below the 2002 figure of around 70
million pairs. Indoor footwear has declined, and outdoor footwear has grown, although it still
represented 84% of the total value of imports (89% by volume or 908 million pairs).
Intra-EU supplies accounted for 38% of all imports, down from 41% in 2002. A large proportion
of Belgian supplies, as the largest supplier, was accounted for by re-exports. Belgian volume
imports increased significantly since 2002. Supplies from Italy decreased significantly over the
period. Extra-EU (excluding developing country) supplies decreased from 6.5% to 2.2% of
imports. The most notable was a major fall in supplies from Macao and Hong Kong. Supplies
from Romania also fell.
Developing country supplies increased over the period, up from 53% to 60% of all imports. This
represented 834 million pairs in 2006. Supplies from China, the leading importer were valued at
€ 1,769 million, up an average annual 24% from € 750 million in 2002. Volume supplies from
China increased by even more, from 215 million pairs in 2002, to 691 million pairs in 2006. Of
the other leading suppliers, supplies from Vietnam fell from € 680 million (99 million pairs) in
2002 to € 517 million in 2006 (84 million pairs), and supplies from Indonesia fell from
€ 128 million in 2002 (19 million pairs) to € 89 million in 2006 (11 million pairs). Supplies from
Thailand more than halved over the period, and decreases were registered by the other main
Asian suppliers, including Malaysia and Cambodia. Supplies from Brazil more than doubled in
volume over the period.
Table 4.3
EU imports and leading suppliers for footwear with plastic/rubber uppers
Total EU,
of which from
Intra EU
2002 2004 2006
3,427 3,597
4,208
1,399
1,504
223
196
1,805
1,897
Sports
476
Indoor
69
Outdoor
2,882
649
57
2,892
Extra EU ex. DC*
DC*
Share
(%)
1,579 Belgium (14.0%), The Netherlands (5.3%),
Italy (4.6%), Germany (4.2%), France (1.8%)
91 Romania (1.0%), Hong Kong (0.4%), Taiwan
(0.2%), USA (0.1%), Canada (0.1%)
2,538 China (42.0%), Vietnam (12.3%), Indonesia
(2.1%), Brazil (0.6%), Thailand (0.6%), Turkey
(0.4%), Bosnia Herzegovina (0.4%), Malaysia
(0.4%), Morocco (0.3%), Turkey (0.3%)
37.5
614
59
3,535
14.6
1.4
84.0
2.2
60.3
Footwear with textile uppers
The next largest product group was footwear with textile uppers, which as shown in Table 4.4,
represented 14% of all imports by value (28% by volume or 807 million pairs). The product
group increased by an average of 4.5% per annum between 2002 and 2006 to a value of
€ 3,754 million. Volume growth was over 12% per annum, from 510 million pairs in 2002. Within
this group, sports footwear was the largest sub-sector accounting for 39% of imports. However,
this represented a decrease of € 360 million over the period from 2002 when sports footwear
accounted for 58% of the product group. Volumes of sports footwear also decreased, but by a
smaller proportion, to 119 million pairs in 2006. This was due to a significant increase in outdoor
footwear with plastic or rubber outer soles. This sub-sector increased in value by an annual
average of 22% over the period. This represented 324 million pairs in 2006, up from 137 million
in 2002.
Page 27 of 27
The share of intra-EU supplies decreased from 51% to 43% in value over the period, mainly
caused by increases from developing countries, whose share increased from 42% to 54%.
However in volume terms, intra-EU trade stood at just 20% in 2006, or 161 million pairs, while
developing country volumes represented 78% of all supplies. Belgium’s position as the largest
intra-EU supplier was due to large numbers of re-exports. Supplies from Germany increased, but
supplies from Italy, Spain and the Netherlands decreased. There were major falls in supplies
from extra-EU (excluding developing country) suppliers, in particular from Macao, South Korea
and Taiwan. Supplies from Switzerland increased. Romanian values increased, but volumes
decreased
Developing countries volumes totalled 632 million pairs in 2006. Supplies from China were
valued at € 1,406 million in 2006 (525 million pairs), up from € 682 million in 2002 (214 million
pairs). Imports from Vietnam, the next largest developing country supplier, increased from € 377
million in 2002 (57 million pairs) to € 426 million in 2006 (65 million pairs). Imports from
Indonesia and Thailand decreased significantly over the period. Of the smaller Asian suppliers,
India and Bangladesh increased supplies, while supplies from Cambodia and Sri Lanka
decreased. Brazil, Turkey, Croatia and Morocco increased their supplies, while supplies from
Tunisia decreased.
Table 4.4
EU imports and leading suppliers for footwear with textile uppers
Total EU,
of which from
Intra EU
2002 2004 2006
3,153 3,470
3,754
1,615
1,632
216
138
1,322
1,700
Sports
1,825
Indoor rubber/plastic
280
outers
Indoor other outers
185
Outdoor rubber/plastic
708
outers
Outdoor other outers
155
Extra EU ex. DC*
DC*
Share
(%)
1,606 Belgium (11.8%), Italy (5.6%), The
Netherlands (4.9%), Germany (4.6%), Spain
(3.8%)
112 Romania (1.3%), Switzerland (0.6%), Hong
Kong (0.4%), Bulgaria (0.2%), S Korea (0.1%)
2,036 China (37.5%), Vietnam (11.3%), Indonesia
(1.3%), Thailand (1.0%), India (0.6%), Croatia
(0.4%), Bangladesh (0.3%), Turkey (0.3%),
Morocco (0.2%), Brazil (0.2%)
42.8
1,608
249
1,465
307
39.0
8.2
218
1,213
206
1,558
5.5
41.5
182
218
5.8
3.0
54.2
Other footwear
Other footwear was the smallest product group, as shown in Table 4.5, and was valued at
€ 2,635 million in 2006, accounting for 10% of all imports by value (2.4% by volume or 69
million pairs). This represented an average annual decrease since 2002 of 3% by value. Volumes
also decreased from 73 million pairs in 2002. This is primarily explained by a decrease in the
imports of footwear parts, which accounted for 90.5% of this product group in 2002. Waterproof
footwear increased from a share of 5.1% of imports by value in 2002 (31 million pairs) to 6% in
2006 (32 million pairs).
Intra-EU imports were unchanged over the period, but their share of imports increased from
35% in 2002 to 42% in 2006. However intra-EU volumes fell from 26 to 25 million pairs over the
period. Supplies from the leading intra-EU importers were mainly down, although French and
German volumes were marginally up. Extra-EU supplies (excluding developing countries)
virtually halved over the period. Supplies from all extra-EU countries, with the exception of Hong
Kong, registered significant decreases.
Page 28 of 28
Although the value of developing country supplies increased by just 1.4% per annum over the
period, their share of imports increased from 33% to 39%. Developing country volumes
increased by a more substantial 4.5% per annum from 31 to 38 million pairs over the period.
Imports from the largest supplier, India, were valued at € 219 million in 2006 (1 million pairs),
down from € 232 million in 2002 (1.3 million pairs). Imports from China were valued at € 189
million in 2006 (28 million pairs), up from € 112 million in 2002 (22 million pairs). Imports from
Tunisia fell from € 164 million in 2002 (0.1 million pairs) to € 128 million in 2006 (0.07 million
pairs). Note, where particularly small volumes are indicated, this will relate to a high proportion
of footwear parts in the import figures. Parts are not included in volume figures. Volume figures
only relate to completed pairs. Albanian and Indonesian supplies fell, as did those of Morocco.
Brazil’s volumes were significantly up, although values were relatively unchanged. Serbia and
Bosnia & Herzegovina were the only major developing country importers to register an increase
in value over the period.
Table 4.5
EU imports and leading suppliers for other footwear
Total EU,
of which from
Intra EU
2002 2004 2006
2,989 2,614
2,643
1,051
1,125
Extra EU ex. DC*
952
595
DC*
986
894
Other uppers
132
Waterproof
153
Parts
2,704
135
124
2,355
4.3
Share
(%)
1,104 Italy (17.7%), Germany (5.6%), Spain (3.0%),
Portugal (2.4%), France (2.2%)
497 Romania (13.6%), Bulgaria (2.9%), USA
(0.5%), Hong Kong (0.4%), Taiwan (0.3%)
1,042 India (8.3%), China (7.1%), Tunisia (4.8%),
Albania (3.2%), Indonesia (2.2%), Brazil
(2.2%), Serbia (2.0%), Bosnia Herzegovina
(1.9%), Morocco (1.8%), Croatia (1.5%)
41.8
131
158
2,345
5.3
6.0
88.7
18.8
39.4
The role of developing countries
The role of developing countries in supplying footwear to the EU has become increasingly
important. In 2002, 33% of all footwear imports by value (54% by volume) to the EU came from
developing countries. By 2006, 42% by value (71% by volume) of all EU imports came from
developing countries. Note that imports by product group for individual member states can be
found in the CBI market surveys on individual countries.
As shown in Table 4.6, imports from developing countries to the EU increased by an annual
average of 10% by value (19% by volume) to reach € 11,025 million in 2006 (2,082 million
pairs. The majority of these increases occurred in the period between 2004 and 2006. This
average increase hides significant differences between countries.
The top four importers (UK, Germany, Italy, France) accounted for 63% (52% by volume) of all
EU imports from developing countries, down from 64% (57% by volume) in 2002. Italy
increased its imports by more than these other three countries and Germany is set to overtake
the UK as the largest importer.
Imports by the twelve newest member states were valued at € 669 million (319 million pairs) in
2006, 6.1% of the total by value and 15% by volume. This compares with € 370 million (148
million pairs) in 2002, 4.9% of the total by value and 14% by volume. Note, Eurostat does not
provide 2002 data for Poland. This will have the effect of slightly overstating the rate of growth.
Page 29 of 29
The largest increases were experienced by the newest member states, Bulgaria and Romania,
which was perhaps to be expected. However large increases were experienced by two of the
older member states, Spain and Denmark. These latter increases were mainly explained by
decreases in their own domestic production. Spanish volume increases were particularly notable.
Healthy increases were also experienced by many leading EU nations.
It should be noted that while Portugal registered no increase in the value of their imports, the
volume of their imports doubled over the period, indicating falling import prices. Some countries
(Czech Republic and Poland) registered falls in the value of their imports over the period, while
volumes continued to increase. Hungary and Estonia were the only countries that registered falls
in both value and volume. Some of the falls by some new member states are explained by their
increasing intra-EU trade as they became more integrated into the EU.
Table 4.6
Imports of footwear from developing countries
2002-2006, € million / millions of pairs
2002
value
volume
Total EU
United Kingdom
Germany
Italy
France
Belgium
The Netherlands
Spain
Sweden
Denmark
Austria
Greece
Romania
Poland*
Slovakia
Czech Republic
Portugal
Finland
Bulgaria
Hungary
Ireland
Slovenia
Lithuania
Cyprus
Latvia
Estonia
Malta
Luxembourg
2004
value
volume
2006
value
volume
Average
annual %
change in
value
7,478
1,512
1,291
1,135
842
807
654
302
126
78
112
108
1,042
181
155
128
130
80
86
65
15
10
9
19
8,259
1,563
1,470
1,228
829
743
821
470
142
138
136
123
1,578
251
237
202
165
110
144
134
21
19
19
28
11,025
2,053
2,004
1,796
1,119
895
852
783
215
214
187
181
2,082
324
294
259
212
149
145
230
29
25
28
39
78
33.7
na
54
102
71
41
18
na
11
30
5
6
13
110
68
67
72
41
33
70
10
34
7
6
25
100
91
88
70
48
44
82
29
83
11
7
22
-4.6
13.7
-3.8
-0.4
4.2
25.2
68
28
33
17
15
7
16
5
1
22
5
3
6
2
2
3
1
1
54
27
22
17
14
9
11
4
0
10
5
3
7
3
3
2
1
0
43
41
37
18
15
10
8
5
0
7
9
4
5
3
3
2
1
0
-11.0
9.5
2.5
1.5
0
10.0
-15.8
2.0
-15.9
35
55
44
60
110
10.2
8.0
11.6
12.1
7.4
2.6
6.8
26.9
14.2
28.7
13.6
13.7
* Poland comparison 2004/2006. 2002 data not available
4.4
Exports
Imports to the EU are now over 20% higher by value (2.5 times higher by volume) than exports.
In 2002 imports were 6% higher in value terms (90% higher by volume). As indicated in Table
4.7, exports from the EU were broadly unchanged, although they fell in the period to 2004,
before starting to slowly increase. The principle change related to falling exports outside of the
EU, excluding developing countries. Exports of footwear within the EU were on the increase. In
2002 these accounted for 68% of all exports by value (74% by volume). This had increased in
Page 30 of 30
2006 to account for 73% of all exports by value (80% by volume). Exports to extra-EU countries
(excluding developing countries) have fallen by the highest rate, particularly exports to the USA.
Leather footwear represented over two thirds of the value of all exports, but this share was
unchanged over the period. Increases in the share of footwear of rubber or plastic and textile
footwear have been experienced, primarily as a result of decreases in exports of other footwear.
Table 4.7
EU exports of footwear, 2002-2006,
€ million / millions of pairs
Total EU, of which from
Intra-EU
Extra-EU ex. DC*
DC*
2002
value
volume
2004
value
volume
2006
value
volume
21,242
14,500
5,743
999
20,016
14,424
4,611
981
21,557
15,810
4,529
1,218
1,007
770
197
40
1,025
849
141
35
1,137
910
122
105
Average
annual %
change in
value
0.4
2.2
-5.8
5.1
4.5
Imports into the EU have been rising ahead of the growth in EU consumer markets, and
increases in imports from developing countries have been increasing well above that. This is
primarily explained by falling EU production and lower-priced supplied from developing countries.
+
+
+
+
+
The recent EU anti-dumping legislation has affected some of the larger Asian suppliers, but
this may actually provide opportunities for suppliers from other countries. The anti-dumping
measures are designed to be procedures to ensure the fair operation of the market, rather
than measures to place restrictions on imports. Thus, as a general consequence, importers
may be looking to supplies from other DC sources to meet their footwear requirements.
However, there could be an extension of the tariffs to other countries if the EU felt that other
developing countries were breaching EU supply regulations.
The other key long-term trend that will provide an opportunity for DC exporters is the
continuing decline in footwear production in the EU and the transfer of production to low
wage economies overseas. Footwear production is now pre-dominantly based in the
developing world. The issue for DC exporters is as much one of competing with other DC
exporters, as one of finding new EU markets. What is an opportunity for one exporter
becomes a threat for another. The import figures show quite clearly how patterns of trade
seem to shift between countries. For example, there seems to be a relationship between
Tunisia and Morocco, where on occasion one country has increasing supplies to the EU while
the other has falling supplies. Other examples of this are also apparent within Asia.
From a product perspective, leather footwear continues to dominate the market, in fact its
total share of imports is increasing. In terms of value, it still provides good opportunities for
DC exporters. DC exporters now account for almost 35% of leather imports by value (over
half by volume), compared with just a quarter in 2002 (37% by volume). Outdoor leather
footwear with outer soles made of other materials continues to offer the best opportunities.
Sports footwear has offered mixed opportunities. Import growth has been seen only in the
smallest sub-group – sports footwear made of rubber or plastic, while sports footwear of
textile materials, which accounted for over half the value of all sports footwear, has fallen by
the largest amount.
Footwear parts have shown large decreases in value over the period. However, this hides the
fact that the share of imports from developing countries is increasing, particularly in volume
terms. Take care however that if you start to supply footwear parts, that you are earning
sufficiently from the operation, as margins are especially low in this sector.
Page 31 of 31
+
+
+
+
Indoor footwear is a small and decreasing sector of the overall footwear market. Both leather
and rubber or plastic indoor footwear have declined. However, some growth is being
experienced in indoor footwear made of textile material, especially those with rubber or
plastic outers.
Although it has been noted above that leather footwear is the largest product group, and
leather outer footwear is the largest sub-sector, outdoor footwear exporters may find
opportunities in some of the other smaller sub-sectors. For example, outdoor textile footwear
with rubber or plastic outers has shown strong growth. In addition, outdoor rubber or plastic
footwear has grown faster than the market as a whole.
Opportunities and threats can also be seen in the relative position of DCs in each of the EU
member states. The newest members, Bulgaria and Romania, as you might expect have
shown the greatest level of increases in imports from DCs. Other large increases were less
predictable (Spain and Denmark), possibly reflecting more on their own declining
production industry.
The new Eastern EU member states have shown mixed fortunes. Slovakia and Latvia are
offering good opportunities, while the larger markets of Poland, Hungary and the Czech
Republic have seen falling imports from developing countries. The other major positive sign
was large increases in imports again by Germany and Italy, both traditionally very large
footwear markets.
There will always be opportunities for those exporters who can demonstrate their ability to work
to the standards demanded by EU importers, whether this is in the form of a developing
partnership or as an ad hoc supplier. Those suppliers who do not demonstrate their ability to
supply the EU to the increasingly higher standards demanded will lose out.
4.6
•
•
•
Useful sources
EU Expanding Exports Helpdesk
Î http://exporthelp.europa.eu/
Î go to: trade statistics
Eurostat – official statistical office of the EU
Î http://epp.eurostat.ec.europa.eu;
Î go to ‘themes’ on the left side of the home page
Î go to ‘external trade’
Î go to ‘data – full view’
Î go to ‘external trade - detailed data’
Understanding eurostat: Quick guide to easy comext
Î http://epp.eurostat.ec.europa.eu/newxtweb/assets/User_guide_Easy_Comext_20080117.pdf
Page 32 of 32
5
Price developments
5.1
Price developments
Consumer prices
Footwear prices generally have been increasing at a rate below the index of all consumer goods.
In fact in some cases they have been decreasing. See the individual country reports for specific
country detail. However, in 2006 the EU27 consumer price index increased by 2.3%, while
clothing and footwear prices decreased by 0.5%, and footwear prices decreased by 0.3%. In
2007, the EU27 consumer price index increased by 2.4%, while clothing and footwear prices
were unchanged. 2007 nevertheless saw the beginnings of price increases for footwear. They
were 0.5% higher at the end of the year. This may be a significant development, perhaps
indicating the anti-dumping tariffs having some effect, as regular price decreases have been a
feature of the footwear market for sometime now. Although still lower than average price
increases for other sectors, this may represent a market turning point.
Retailers have been absorbing costs and reducing their margins in order to keep prices low for
consumers, but there is little more they can do to cut costs further. As the section below on
import prices also indicates, the period of low footwear prices for EU consumers may be coming
to an end. Prices have been on promotion for longer periods during the year, rather than just the
traditional sale periods of January and June. This consumer expectation of permanently reduced
prices has also made it difficult for retailers to increase prices.
It is important to appreciate that averaging prices across a number of different countries and
different types of footwear will always disguise major variations. Generally speaking, the midmarket segment has been squeezed by the low-price discount end of the market in many
countries. At the same time, the higher-priced or luxury segment has maintained its position, or
even grown. This has created a gap in the middle of the market, but consumers are now
reluctant to pay certain prices when they see that the quality of many footwear products has
improved at the bottom end of the market. Developing country exporters may be attracted to
higher segments in the market, such as fashion or leather footwear, rather than lower-priced
rubber or plastic products.
Some footwear retailers such as Bata operate in a number of EU markets, but they tend to offer
different products in each country, making a direct comparison of prices between countries
difficult. Companies such as Aerosoles (http://www.aerosoles.eu) present a pan-European
positioning, but do not provide comparable prices between countries. The retailer Footlocker has
a pan-European website and some comparable products can be found, although they tend to be
sports footwear products.
Import prices
Import prices have fallen between 2002 and 2006, although there are indications that some
import prices may now be starting to increase. Falling prices have been greater from developing
countries, than from other parts, particularly intra-EU prices that have barely changed.
Table 5.1
Development in EU average import values/prices, 2002 – 2006, €
2002
ave price
per pair
Total imports
Intra-EU
Developing countries
11.74
18.31
7.18
2004
ave price
per pair
2006
ave price
per pair
ave. Annual
% change
9.02
16.40
5.23
8.92
17.71
5.30
-6.6
-0.8
-7.3
Page 33 of 33
It is important to recognise that there are differences in import prices between different
countries. The highest import prices were seen in Luxembourg and Denmark, while the lowest
were seen in Poland and the Czech Republic. Note the highest developing country import prices
were found in Denmark and Slovenia, while the lowest were also found in Poland and the Czech
Republic, as the following table outlines. This may indicate the significance of developing country
import prices on import prices in general. Prices have fallen by most in the Czech Republic and
increased by most in Romania.
Table 5.2
Developments in average import prices from developing countries
in selected EU countries, in €
Germany
Italy
France
United Kingdom
Spain
Netherlands
Belgium
Denmark
Sweden
Finland
Austria
Ireland
Greece
Portugal
Poland*
Slovakia
Czech Republic
Hungary
Slovenia
Cyprus
Lithuania
Latvia
Estonia
Malta
Romania
Bulgaria
* comparison 2004/2006
2002
ave price
per pair
8.31
8.88
6.50
8.35
4.30
7.62
10.08
7.46
8.32
7.27
12.71
5.84
5.84
13.59
na
4.76
3.42
3.12
10.77
7.13
2.60
3.54
5.87
4.91
0.63
1.34
2004
ave price
per pair
6.20
6.07
5.02
6.23
3.51
5.69
6,74
7.42
6.83
6.77
7.00
5.33
4.41
10.75
1.57
7.15
1.94
5.31
7.53
4.91
2.59
2.76
4.34
4.65
0.73
1.32
2006
ave price
per pair
6.81
6.95
5.27
6.34
3.40
5.86
5.99
8.68
7.46
7.07
6.60
4.71
4.62
6.40
1.22
3.16
1.05
6.52
8.72
4.72
3.29
3.10
3.55
4.39
1.41
1.94
ave. annual
% change
-4.9
-5.9
-5.1
-6.7
-7.8
-6.4
-12.2
3.9
-2.7
-0.7
-15.1
-5.2
-5.7
-17.2
-11.8
-9.7
-25.4
20.2
-5.1
-9.8
6.1
-3.3
-11.8
-2.8
22.3
9.7
It is also interesting to look at how prices differ for the different footwear product groups. Table
5.3 highlights the average prices of the selected product groups. It shows that average prices for
DC exporters have been falling by more than other prices, with the possible exception of textile
footwear. It also highlights how much higher the price of leather footwear is. Note prices of other
footwear are excluded from this table.
Page 34 of 34
Table 5.3
Developments in EU average import prices by product group, in €
Total EU rubber/plastic imports
Total EU leather imports
Total EU textile imports
2002
ave price
per pair
5.99
4.54
2004
ave price
per pair
4.41
3.21
2006
ave price
per pair
4.13
3.04
ave. annual
% change
17.00
11.77
15.58
10.19
16.21
10.80
-1.2
-2.1
6.18
4.05
4.78
3.27
4.65
3.22
-6.9
-5.6
-8.9
-9.5
5.2
Useful sources
There are a number of ways to find out about EU footwear prices, depending on whether you
want to find out about wholesale or retail prices:
•
•
•
•
•
You can find out about wholesale prices at one of the major trade fairs, or alternatively by
contacting a footwear wholesaler. They may not always be prepared to discuss prices
openly but looking at both sets of prices will also give you an idea of margins. However,
you should always ensure that you are comparing the same thing. Some products may
appear to be similar but there may well be very sound reasons why their prices differ.
A good link to wholesalers and wholesale prices in the UK is the Footwear and Shoe UK
Wholesale Suppliers Directory (http://www.thewholesaler.co.uk/trade/distributor/Footwear_and_shoe_UK_wholesale_suppliers_directory/
You can find footwear prices in mail order catalogues, but the main source now is the
Internet. There are many Internet websites providing footwear retail prices. Many of them
are country specific. See individual country reports for more details.
Although some companies such as Bata and Brantano operate in a number of countries,
cross-country price comparison is not easy, as indicated earlier in this chapter. The Danish
brand Ecco is sold in many EU markets (http://www.ecco.com) and although the same
products may be sold in different countries, this information is currently not provided on their
website.
There are many general websites for footwear prices. One example is: http://www.shoeshop.com.
Page 35 of 35
6
Market access requirements
As a manufacturer in a developing country preparing to access EU markets, you should be aware
of the market access requirements of your trading partners and the EU governments.
Requirements are demanded through legislation and through labels, codes and management
systems. These requirements are based on environmental, consumer health and safety and
social concerns. You need to comply with EU legislation and have to be aware of the additional
non-legislative requirements that your trading partners in the EU might request.
For information on legislative and non-legislative requirements, go to ‘Search CBI database’ at
http://www.cbi.eu/marketinfo, select your market sector and the EU in the category search, click
on the search button and click on market access requirements.
Packaging
Deliveries from developing countries generally have far to travel, so care must be given to the
packaging of products, particularly with regards to changes in temperature, rough handling and
theft. Leather shoes are usually packed in individual boxes per pair with 12 to 18 pairs in a
carton. Cheaper plastic and textile shoes are often packed in plastic bags or in bulk. Importers
want to know well beforehand how you are packing your shipment. Some importers may have
specific requirements about packaging. For example, information about the order printed on the
boxes (order number, box number, name department or contact person etc.), or mentioning
specific promotion details on the package.
Apart from the safety aspects and protection against damage, the focus of packaging is on
environmentally friendly transport. This means, among other things, that you should consider
whether returnable systems could be used on a much greater scale than before.
Additional information on packaging can be found at the website of ITC on export packaging:
http://www.intracen.org/ep/packaging/packit.htm.
Size marking
Despite the attempt to unify footwear sizes by the International Standards Organisation (ISO)
referred to as the Mondopoint shoe sizing system, there are still two size systems in the EU:
• The Continental European sizing system, which is mainly used.
• The English size system.
In general, single unit sizes are common for textile and plastic footwear, while half sizes are
expected for footwear made of leather or synthetic leather.
Importers usually purchase a minimum of 12 to 18 pairs of shoes per model. The size assortment
for an order of 12 pairs (the so-called Pirmazenser size range) is typically as follows:
Table 6.1
Overview of the Pirmazenser size range
Ladies’ sizes
Mens’ sizes
Number of pairs:
Ladies’ full sizes
Ladies’ half sizes
Men’s full sizes
Men’s half sizes
36
40
36½
40½
1
1
1
37
41
2
1
2
1
37½
41½
1
1
38
42
3
2
3
2
38½
42½
2
2
39
43
3
2
3
2
39½
43½
1
1
40
44
2
1
2
1
40½
44½
41
45
1
1
1
1
1
Page 36 of 36
The normal size range for ladies’ shoes is 36 to 41 and for men’s shoes 40 to 45. However, be
aware of the larger sizes and wider feet of people in northern EU member states such as
Scandinavia and the Netherlands.
Width sizes are given in capitals A until K, of which A is smaller than K and G represents the
standard width size. Different widths are less common, except for some expensive European
brands or for children’s footwear.
Labelling
There is an obligatory labelling for footwear, as described in the EU Shoe Labelling Directive
94/11/EC. These labels should inform about parts of footwear such as the upper, the lining, the
insole sock and the outer sole and should be explained by means of agreed pictograms or by text.
The directive also includes rules about the material used.
Footwear Pictograms: In addition to the CE-Mark, European footwear requires a specific set of
pictograms used to graphically denote the largest constituent of the shoe. A previously defined
pictogram is marked on the shoe respective to its make-up. This pictogram is designed as
follows:
• A square hatch pattern for synthetic materials - a piece of leather for leather.
• A diamond inside a piece of leather for treated leather.
• A diamond for miscellaneous materials.
In order to apply this logo, the product must contain at least 80% of the appropriate material.
Anti-dumping
In April 2006, the EU imposed provisional anti-dumping duties on leather footwear coming from
Vietnam and China, rising over the months to 16.8% and 19.4%. These were extended in
October 2006 at 16.5% for Chinese goods and 10% for Vietnamese, to last for two years. This
likely to be extended for a further two years beyond this, or possibly as many as five years.
In the case of footwear with textile uppers, EU importers are confronted with duties of maximum
49.2%. Businesses making complaints about anti-dumping procedures are required to provide the
investigators with highly confidential information relating to competition (price structure, profits,
margins etc.).
The latest information on anti-dumping can be found at the following site:
http://trade-info.cec.eu.int/doclib/cfm/doclib_section.cfm?sec=203&lev=2&order=date as well as
at http://exporthelp.europa.eu/.
Anti-fraud policy
The EU has increased anti-fraud investigations and actions against fraud intended to:
• Benefit illegally from preferential treatment such as that under RGSP
• Cheat consumers (claiming EU origin for products produced elsewhere)
• Profit from counterfeiting and piracy (copying exclusive designs and models without
permission of the owner).
Tariffs
Up-to-date information on import tariffs and an updated list of least developed countries can be
obtained from the Customs authorities in Rotterdam, the Netherlands, through their on-line
system, known as the Integrated Tariff of the European Communities (TARIC) at
(http://www.douane.nl). Click on ‘Business’ and on ‘Imports’ where you will have to mention the
HS code of the footwear concerned; a detailed list of HS codes can be found in Appendix A.
Information on tariffs and quota can be found at http://exporthelp.europa.eu/
Quotas
There are quantitative restrictions on a number of footwear articles of Chinese and Taiwanese
origin. The EU footwear sector remains highly vulnerable to imports from China because of their
Page 37 of 37
volume, the difference in price between Chinese and EU footwear and the potential of the Chinese
industry. There are still restrictions for the following products:
Table 6.3 Restrictions for footwear categories
6402.991*
6403.51
6403.91*
6403.991
6404.11.000**
6404.19.100
Footwear not covering the ankle, outer sole and upper of rubber and /or
plastic other than sports and indoor.
Footwear, covering the ankle, upper and outer sole of leather other than
sports footwear.
Footwear, covering the ankle, upper of leather and outer sole of rubber,
plastic or synthetic leather.
Footwear, not covering the ankle, upper of leather and outer sole of
rubber, plastic or synthetic leather.
Sports footwear, outer sole of rubber or plastic, upper of textile.
Slippers and other indoor shoes, outer sole of rubber or plastic, upper of
textile.
* Excluding footwear involving special technology: shoes which have a CIF price per pair of not less than 9 for use in
sporting activities, with a single- or multi-layer moulded sole, not injected, manufactured from synthetic materials
specially designed to absorb the impact of vertical or lateral movements and with technical features such as hermetic
pads containing gas or fluid, mechanical components which absorb or neutralise impact or materials such as lowdensity polymers.
** Excluding:
(a) footwear which is designed for a sporting activity and has, or has provision for the attachment of, spikes, sprigs,
stops, clips, bats or the like, with a non-injected sole;
(b) footwear involving special technology: shoes which have a CIF price per pair of not less than 9 for use in sporting
activities, with a single- or multi-layer moulded sole, not injected, manufactured from synthetic materials specially
designed to absorb the impact of vertical or lateral movements and with technical features such as hermetic pads
containing gas or fluid, mechanical components which absorb or neutralise impact or materials such as low-density
polymers.
You can download information on requirements on tariffs and quotas in specific EU markets from
the website of the European Commission on
http://www.europa.eu.int/comm/taxation_customs/index_en.htm or at the EU export helpdesk at
http://exporthelp.europa.eu/.
Page 38 of 38
7
Opportunity or threat ?
An overview of the general opportunities and threats are given at the end of chapters 1, 2 and 4
in this EU survey. Specific opportunities in each EU market can be found in Chapters 1 and 3 of
the CBI market surveys on individual countries. However, to make the it easier to translate the
opportunities into successful trading, it is important to know the trends. Especially in the fashion
industry, trends, fads or crazes change at a much faster rate than the long-term trends, which
are less risky for exporters from developing countries. Once the trend is clear it is important to
know which target group in which country is involved.
A given trend offers an opportunity to one company, but can be a threat to another. The
footwear market has its limitations, and growth in one segment will necessarily take sales from
another segment.
A good example would be the current trend for ladies’ ankle height boots. To analyse its
potential for yourself, you should find out whether this trend applies to all EU markets, or just to
a selected number. With this information, you will then know whether the country markets are
suitable for you as export markets. For example, you may have good contacts in the trade in
Portugal, but you find out that this trend is not so strong in that country. Conversely, you may
discover that the best opportunities for these type of boots are in northern EU markets. You need
to ask yourself if you have good contacts in these markets. If not, are you confident that you can
develop such contacts? You also need to be confident that you can develop ankle boots for these
markets that will be of interest to both the trade and consumers.
How will you design and produce these products? Will they be standalone products, or will they
be part of a range that includes other ladies’ accessories? Will the production of this new product
line impact on your other production of other items? Have you properly costed the implications of
pursuing this opportunity? Which trade channel will you use to try to sell this product? Do you
know a suitable importer or wholesaler that you can trust? What time scale will you be working
to in order to optimise the opportunity presented by this product trend? Do you have a product
design already developed? Have you protected the design from copying by competitors?
The greater the opportunity, the more likely more of your competitors will also be looking at the
same opportunity. How confident are you that you can match the quality, design and service
specifications that your competitors will provide?
In short, every listed opportunity becomes a threat for your company if you are not able to
incorporate it in your product line and exploit it, because other companies will, thereby putting
you at a disadvantage. It is therefore important not only to have a clear view of the market, but
of your company’s capabilities as well. You have to organise your company in such a way, that
you can adapt to market preferences and produce attractive products at competitive prices. In
interviews with successful DC exporters, a couple of things turned out to be crucial for
sustainable success:
• Design quality
• Product quality
• Competitive pricing
• Continuous customer communication
For more information on these, refer to CBI’s Export guidelines for footwear.
Page 39 of 39
Appendix A
Product characteristics
Product groups
Footwear is defined as “all articles designed to protect or cover the foot, with a fixed outer sole
which comes into contact with the ground”. Footwear is subdivided in this survey from two
different perspectives:
From a demand perspective
1. Based on gender
• Women’s footwear
•
Men’s footwear
•
Children’s footwear
From a supply perspective
Based on material of upper
• Leather
This segment distinguishes the following
footwear with leather uppers: sport, indoor
and outd1oor. The outdoor category is further
sub-divided into footwear with leather soles
and those with non-leather soles.
• Plastic/Rubber
This segment distinguishes footwear with
rubber/plastic uppers: sport (gym shoes),
indoors (slippers) and outdoor footwear.
• Textile
This segment includes the following footwear
with textile uppers: sport, indoor and outdoor.
Both indoor and outdoor categories are
further divided into those with rubber/plastic
soles, and those with other soles.
• Other
This segment includes footwear with other
uppers, safety footwear, waterproof outdoor
footwear and parts of footwear.
2. Based on activity
• Sports
This footwear is generally used for sporting
purposes. Some are also purchased for
general usage. Examples of footwear in this
segment include footwear used for running,
walking, football, basketball, fitness, aerobics.
• Leisure/casual/health
Footwear for casual use can be similar to
some sports footwear. This type of footwear is
increasingly being worn at work. More
fashionable (e.g. sneakers and ballerinas) and
healthy footwear (e.g. sandals with ergonomic
footpads) are now also included.
• Classic/formal
This segment includes more traditional formal
footwear, such as loafers, pumps, women’s
high-heeled shoes. Formal styles change little
over the years. This segment is under more
pressure from leisure/casual footwear.
• Outdoor/rugged
The “boot” is the general term for this type of
footwear, with the opening above the ankle.
This segment includes utility boots (for
walking, climbing etc) and fashion boots
(desert boots, Chelsea boots, overknees etc..)
Page 40 of 40
All sports shoes are included in this survey, with the exception of ski boots and snowboard boots.
Please refer to the CBI market survey “Sports and Camping Goods” for details of these products.
Safety footwear is also excluded. All other footwear is included.
The footwear production figures and trade statistics in this survey are based on the type of
material that is used to produce the products. There are many different product codes for
footwear, each of which indicates the wide variety in types of footwear that are produced. Safety
footwear is excluded from this survey. Please refer to the CBI Market Survey “Personal Protective
Equipment” for details of these products.
HS codes and Prodcom codes do not always directly relate to each other. There is not a Prodcom
code for every HS code. Some Prodcom codes relate to a number of HS codes. In the following
table (sub-divided into four parts), there is a direct match between HS codes and Prodcom codes
for sports shoes, indoor shoes and waterproof shoes, while some HS codes for some outdoor
footwear and some other footwear do not have a corresponding Prodcom code. Read the
comparative descriptions carefully to appreciate how the different classifications relate to each
other.
1. Footwear with plastic/ rubber uppers
HS code
Description
Sports
64021900
Indoor
64029950
Outdoor
64022000
Sports footwear, outer soles of
rubber or plastic
Slippers & other indoor
footwear, outer soles of rubber
or plastic
Footwear, outer soles of
rubber or plastic, with upper
straps or thongs assembled to
the soles by means of plugs
Footwear covering the ankle,
outer soles of rubber or plastic
Footwear, uppers of rubber
and outer soles of rubber or
plastics (excl covering the
ankle)
Footwear, uppers of plastic
plastics with a vamp of straps
or which has one or several
pieces cut out (heel more than
3cm)
plastics with a vamp of straps
or which has one or several
pieces cut out (heel less than
3cm)
plastics, insoles of length less
than 24cm
Footwear (not identifiable as
men’s or women’s), not
covering the ankle, uppers of
plastic and outer soles of
rubber or plastics, insoles of
length less than 24cm
rubber or plastics, uppers of
64029100
64029910
64029931
64029939
64029991
64029993
64029996
Prodcom
code
19302310
19301237
19301210
19301231
19301220
19301235
Description
Sports footwear, outer soles
& uppers of rubber or plastic
footwear, rubber or plastic
outer soles & plastic uppers
Sandals with rubber or
plastic outer soles & uppers
Town footwear with rubber
or plastic uppers
Town footwear with uppers
of rubber
Town footwear with uppers
of plastics
Page 41 of 41
64029998
plastics, insoles of length more
than 24cm for men
rubber or plastics, uppers of
plastics, insoles of length more
than 24cm for women
2. Footwear with leather uppers
HS code
Description
Sports
64031900
Indoor
64035950
Sports footwear, outer soles of
rubber, plastics, leather or
composition leather & uppers
of leather
footwear, outer soles & uppers
of leather
64039950
Outdoor,
outer soles
of leather
64032000
64035111
64035115
64035119
64035191
64035195
64035199
64035911
64035931
64035935
footwear, outer soles of
rubber, plastics or composition
leather & uppers of leather
leather, & uppers which consist
of leather straps around the
instep & big toe
Footwear, outer soles & uppers
of leather, covering the ankle
not the calf, less than 24cm
Men’s footwear, outer soles &
uppers of leather, covering the
ankle not the calf, more than
24cm
Women’s footwear, outer soles
& uppers of leather, covering
the ankle not the calf, more
than 24cm
of leather, covering the ankle
and the calf, less than 24cm
uppers of leather, covering the
ankle and calf, more than
24cm
& uppers of leather, covering
the ankle and calf, more than
24cm
of leather, with a vamp of
straps or which has one or
several pieces cut out (heel
more than 3cm)
of leather, with a vamp of
less than 3cm)
uppers of leather, with a vamp
Prodcom
code
19302350
Description
19301370
footwear, rubber, plastic or
leather outer soles & leather
uppers
19303255
Sandals, leather outer soles
& uppers, leather straps
around the instep & big toe
19301351
Men’s town footwear with
leather uppers
19301352
Women’s town footwear with
leather uppers
19301353
Children’s town footwear
with leather uppers
19301361
Men’s sandals with leather
uppers
Sports footwear with rubber,
plastic or leather outer soles
& leather uppers
Page 42 of 42
64035939
64035991
64035995
64035999
Outdoor,
other outer
soles
64033000
of straps or which has one or
less than 3cm, insoles more
than 24cm)
& uppers of leather, with a
vamp of straps or which has
one or several pieces cut out
(heel less than 3cm, insoles
more than 24cm)
of leather, insoles of less than
24cm (excl covering the ankle)
uppers of leather, insoles of
more than 24cm(exc covering
the ankle)
& uppers of leather, insoles of
more than 24cm(exc covering
the ankle)
Footwear, leather uppers,
made on a base or platform of
wood
19301362
Women’s sandals with
leather uppers
19301363
Children’s sandals with
leather uppers
19301380
Footwear, wood, cork or
other outer soles & leather
uppers
Footwear with a wooden
base & leather uppers
19303257
64039111
64039113
64039116
64039118
64039191
64039193
64039196
Footwear outer soles of
leather, uppers of leather,
covering ankle not calf, insoles
of less than 24cm
Footwear, not identifiable as
men’s or women’s, outer soles
of rubber, plastics or
composition leather, uppers of
leather, covering ankle not
calf, insoles more than 24cm
Men’s footwear, outer soles of
covering ankle not calf, insoles
more than 24cm
leather, covering ankle not
covering ankle and calf, insoles
less than 24cm
leather, covering ankle and
covering ankle and calf, insoles
more than 24cm
Page 43 of 43
64039198
64039911
64039931
64039933
64039936
64039938
64039991
64039993
64039996
64039998
64051010
leather, covering ankle and
leather & uppers of leather,
with a vamp of straps or which
has one or several pieces cut
out (heel more than 3cm)
leather & uppers of leather,
out (heel less than 3cm &
insole less than 24cm)
leather, not covering the
ankle, with a vamp of straps or
which has one or several
pieces cut out, insoles more
than 24cm
leather, uppers of leather, not
covering ankle, with a vamp of
less than 3cm)
leather, not covering ankle,
out (heel less than 3cm)
insoles less than 24cm, excl
covering the ankle
leather, insoles more than
24cm,
leather, uppers of leather, not
covering ankle, insoles more
than 24cm
leather, not covering ankle,
insoles more than 24cm
Footwear, uppers of leather or
Page 44 of 44
64051090
composition leather, outer
soles of wood or cork
Footwear, uppers of leather or
composition leather, outer
soles of other material
3. Footwear with textile uppers
HS code
Description
Sports
64041100
Sports footwear, incl tennis,
basketball, gym, training
shoes & the like, outer soles of
rubber or plastics & uppers of
textile materials
Indoor,
rubber/
plastic
outer soles
Indoor,
other outer
soles
64041910
footwear, outer soles of rubber
or plastics & uppers of textile
materials
footwear, outer soles of
leather or composition leather
& uppers of textile materials
footwear, uppers of textile
materials (excl outer soles of
composition leather)
rubber or plastics & uppers of
textile materials
19301444
footwear
19301445
Footwear with rubber, plastic
or leather outer soles &
textile uppers
Footwear, uppers of textile
materials, outer soles of wood
or cork
leather or composition leather
& uppers of textile materials
Footwear, uppers of textile
materials, outer soles of other
material
19301448
Footwear with wood or cork
outer soles & textile uppers
19301449
Footwear with textile uppers,
excl rubber, plastic, wood or
cork outer soles
Other footwear with textile
uppers
HS code
Description
Prodcom
code
Description
64059010
other materials
Footwear, outer soles of wood,
cork, twine, paperboard,
furskin etc, uppers of other
materials
19301100
Waterproof footwear, uppers
in rubber or plastic (excl
metal toe cap)
Waterproof footwear with
uppers in rubber
64042010
64052091
Outdoor,
rubber/
plastic
outer soles
Outdoor,
other outer
soles
64041990
64052010
64042090
64052099
Prodcom
code
19302240
19303290
Description
Sports footwear with rubber
or plastic outer soles &
textile uppers
4. Others
Footwear
with other
uppers
64059090
Waterproof
outdoor
footwear
64019110
Waterproof footwear, covering
the knee, outer sole of rubber
19301120
Page 45 of 45
64019190
64019210
64019290
64019910
64019990
Parts of
footwear
64061011
64061019
64061090
64062010
64062090
64069100
64069910
64069930
64069950
64069960
64069980
or plastic, upper of rubber
Waterproof footwear, covering
the knee, outer sole of rubber
or plastic, upper of plastic
Waterproof footwear, not
covering the knee, outer sole
of rubber or plastic, upper of
rubber
Waterproof footwear, not
covering the knee, outer sole
of rubber or plastic, upper of
plastic
Waterproof footwear, outer
sole of rubber or plastic, upper
of rubber
Waterproof footwear, outer
sole of rubber or plastic, upper
of plastic
Leather uppers, whether or not
attached to soles other than
outer soles
Parts of leather uppers, excl
stiffeners
Uppers, whether or not
attached to soles other than
outer soles, & parts thereof
Outer soles & heels of rubber
Outer soles & heels of plastics
Parts of footwear, of wood
Gaiters, leggings & similar
articles & parts thereof
Assemblies of uppers affixed to
inner soles or other sole
components
Removable insoles, heel
cushions & other removable
accessories
Outer soles of shoes of leather
or composition leather
Other parts of footwear
19301130
Waterproof footwear with
uppers in plastic
19304065
Leather uppers & parts
19304069
Uppers & parts of footwear
19304070
Rubber or plastic outer soles
& heels
19304091
Wooden parts of footwear
19304099
Parts of footwear, other
materials
Statistical product classification
Prodcom and Combined nomenclature (CN)
In this survey two different sets of statistical data are used. Both sets have been provided by
Eurostat, the statistical body of the EU.
The first set is derived from Prodcom. The term Prodcom is derived from PRODucts of the
European COMmunity. This is a survey based on products whose definitions are standardised
across the EU to allow comparability between the member countries’ data. Prodcom covers some
4,800 products that are assigned to some 250 industries (subclasses) as defined by the Standard
Industrial Classification (SIC). Prodcom data contain production, imports and exports. Based on
these data apparent consumption can be calculated as follows: apparent consumption =
production + imports -/- exports.
The second set is the trade data based on the Combined Nomenclature. The abbreviation CN
stands for Combined Nomenclature. This Combined Nomenclature contains the goods
classification prescribed by the EU for international trade statistics. The CN is an 8-digit
classification consisting of a further specification of the 6-digit Harmonised System (HS). HS was
Page 46 of 46
developed by the World Customs Organisation (WCO). The system covers about 5,000
commodity groups, each identified by a six-digit code. More than 179 countries and economies
use the system. In this survey CN data are used to indicate imports and exports.
Statistical data: limitations
Trade figures quoted in CBI market surveys must be interpreted and used with extreme caution.
The Prodcom data used in Chapter 2 is less reliable than the import and export statistics used in
Chapter 4, as they are not part of official data collection for Customs. Companies only have to
send in their data on an annual or quarterly basis. The figures sometimes show a discrepancy
between years, e.g., a large fall or extraordinary growth. These problems are caused by
inaccurate, inconsistent and untimely reporting by companies. However, Prodcom data is the
only official source for production data, displaying numbers at product group level and describing
the different EU markets in detail. Therefore they are useful to get an indication of size and
trends within those markets. For decision-making, however, these figures are not accurate
enough and should be used in conjunction to further market research.
In the case of intra-EU trade, statistical surveying is only compulsory for exporting and importing
firms whose trade exceeds a certain annual value. The threshold varies considerably from
country to country, but it is typically about € 100,000. As a consequence, although figures for
trade between the EU and the rest of the world are accurately represented, trade within the EU
is generally underestimated.
Furthermore, the information used in CBI market surveys is obtained from a variety of sources.
Therefore, extreme care must be taken in the qualitative use and interpretation of quantitative
data, it puts limitations to in-depth interpretation of relations between consumption, production
and trade figures within one country and between different countries.
Page 47 of 47
Appendix B
Introduction to the EU market
The European Union (EU) is the current name for the former European Community. Since
January 1995 the EU has consisted of 15 member states. Ten new countries joined the EU in May
2004. In January 2007 two more countries – Bulgaria and Romania - joined the EU. Negotiations
are in progress with a number of other candidate member states. In this survey, the EU is
referred to as the EU27, unless otherwise stated.
Cultural awareness is a critical skill in securing success as an exporter. The enlargement of the
EU has increased the size of the EU, and also significantly increased its complexity. With more
people from culturally diverse backgrounds, effective communication is necessary. Be aware of
differences in respect of meeting and greeting people (use of names, body language etc.) and of
building relationships. There are also differences in dealings with hierarchy, presentations,
negotiating, decision-making and handling conflicts. More information on cultural differences can
be found in chapter 3 of CBI’s export manual ‘Exporting to the EU (2006)’.
General information on the EU can also be found at the official EU website
http://europa.eu/abc/governments/index_en.htm or the free encyclopaedia Wikipedia
http://en.wikipedia.org/wiki/Portal:Europe.
Monetary unit: Euro
On 1 January 1999, the Euro became the legal currency within eleven EU member states:
Austria, Belgium, Finland, France, Germany, Italy, Ireland, Luxembourg, The Netherlands, Spain,
and Portugal. Greece became the 12th member state to adopt the Euro on January 1, 2001.
Slovenia adopted the Euro in 2007. Cyprus and Malta adopted the euro at the beginning of 2008.
Since 2002 Euro coins and banknotes replaced national currency in these countries. Denmark,
United Kingdom and Sweden have decided not to participate in the Euro.
In CBI market surveys, the Euro (€) is the basic currency unit used to indicate value.
Table 1
Country
Exchange rates of EU currencies in €,
average yearly interbank rate
Name
Code
2007
Feb
2008
Bulgaria
Lev
BGN
1.96
1.96
Czech Republic
Crown
CZK
27.72 25.69
Denmark
Crown
DKK
7.44
7.45
Estonia
Crown
EEK
15.67 15.65
Hungary
Forint
HUF
252.05 261.1
Latvia
Lats
LVL
0.70
0.70
Lithuania
Litas
LTL
3.46
3.45
Poland
Zloty
PLN
3.79
3.60
Romania
Lei
ROL
3.35
3.68
Slovakia
Crown
SKK
33.85 33.50
Sweden
Crown
SEK
9.25
9.45
United Kingdom
Pound
GBP
0.68
0.75
Source: Oanda http://www.oanda.com/ (February 2008)
Page 48 of 48
Appendix C
List of developing countries
OECD DAC list - January 2006
When referred to developing countries in the CBI market surveys, reference is made to the
group of countries on this OECD DAC list of January 2006.
Afghanistan
Albania
Algeria
Angola
Anguilla
Antigua and Barbuda
Argentina
Armenia
Azerbaijan
Bangladesh
Barbados
Belarus
Belize
Benin
Bhutan
Bolivia
Bosnia & Herzegovina
Botswana
Brazil
Burkina Faso
Burundi
Cambodia
Cameroon
Cape Verde
Central African Rep.
Chad
Chile
China
Colombia
Comoros
Congo Democratic Rep.
Congo Rep.
Cook Islands
Costa Rica
Cote d’Ivoire
Croatia
Cuba
Djibouti
Dominica
Dominican Republic
Ecuador
Egypt
El Salvador
Equatorial Guinea
Eritrea
Ethiopia
Fiji
Gabon
Nepal
Gambia
Nicaragua
Georgia
Niger
Ghana
Nigeria
Grenada
Niue
Guatemala
Oman
Guinea
Pakistan
Guinea-Bissau
Palau
Guyana
Palestinian Admin. Areas
Haiti
Panama
Honduras
Papua New Guinea
India
Paraguay
Indonesia
Peru
Iran
Philippines
Iraq
Rwanda
Jamaica
Samoa
Jordan
Sao Tome & Principe
Kazakhstan
Saudi Arabia
Kenya
Senegal
Kiribati
Serbia
Korea Rep. of
Seychelles
Kyrgyz Rep.
Sierra Leone
Laos
Solomon Islands
Lebanon
Somalia
Liberia
South Africa
Libya
Sri Lanka
Macedonia
St. Helena
Madagascar
St. Kitts Nevis
Malawi
St. Lucia
Malaysia
St. Vincent & Grenadines
Maldives
Sudan
Mali
Suriname
Marshall Islands
Swaziland
Mauritania
Syria
Mauritius
Tajikistan
Mayotte
Tanzania
Mexico
Thailand
Micronesia, Fed. States Timor-Leste
Moldova
Togo
Mongolia
Trinidad & Tobago
Montenegro
Tunisia
Montserrat
Turkey
Morocco
Turkmenistan
Mozambique
Turks & Caicos Islands
Myanmar
Tuvalu
Namibia
Uganda
Nauru
Ukraine
Uruguay
Uzbekistan
Vanuatu
Venezuela
Vietnam
Wallis & Futuna
Yemen
Zambia
Zimbabwe
Page 49 of 49
CBI countries – January 2008:
CBI supports exporters in the following Asian, African, Latin American and European (Balkan)
countries:
Afghanistan
Albania
Armenia
Bangladesh
Benin
Bolivia
Bosnia-Herzegovina
Burkina Faso
Colombia
Ecuador
Egypt
El Salvador
Ethiopia
Georgia
Ghana
Guatemala
Honduras
India
Indonesia
Jordan
Kenya
Macedonia
Madagascar
Mali
Moldavia
Montenegro
Morocco
Mozambique
Nepal
Nicaragua
Pakistan
Peru
Philippines
Rwanda
Senegal
Serbia
South Africa
Sri Lanka
Suriname
Tanzania
Thailand
Tunisia
Uganda
Vietnam
Zambia
Page 50 of 50

the footwear market in the eu

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