Footwear Insights (Production and Consumption by Country)

Shoe Production by Country (based on 2023 data)

In 2023, global footwear production fell by 6% to 22.4 billion pairs, marking the lowest level in a decade, excluding the pandemic years of 2020 and 2021.

Each year, over 22 billion pairs of shoes are produced worldwide, with sneakers making up about a quarter of that total. China leads global production, manufacturing 60% of all shoes—approximately 13 billion pairs—for both domestic and international markets. Following China, Vietnam exports over a billion pairs annually, valued at $20.78 billion, supported by its 2,200 shoe factories. Indonesia ranks third in production and fifth in exports, producing 1.4 billion pairs worth $5.19 billion each year.

Turkey's 33 footwear companies produce 600 million pairs annually, averaging 328,000 pairs daily, with a growing market value of $6.08 billion. Italy, the fifth-largest global producer and the leading producer in the European Union, manufactures 148.8 million pairs yearly, exporting shoes valued at over eight billion Euros.

Mexico's 8,996 factories produce 250 million pairs annually, with Guanajuato contributing 156.2 million pairs. Thailand manufactures 245 million pairs each year, offering various types like sneakers, sandals, and leather shoes, targeting a market value of $2.66 billion in 2023. Pakistan, with its 80,000 factories, produces 483 million pairs annually, primarily exporting to the U.S., Europe, and Arab countries.

Brazil, known for its high-quality brands, produces 800 million pairs each year. The United States, the tenth-largest shoe producer globally, accounts for 21% of all footwear, with Nike being the largest brand, generating $46.7 billion in revenue.

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?Shoe consumption by Country ( based on 2022 data)

China remains the top consumer of footwear, though its share of global consumption has decreased to 17.9%. The United States saw a significant increase of 12.7% last year, reclaiming its position as the second-largest footwear consumer, surpassing India. Brazil and Indonesia have also changed places, now ranking 4th and 5th, respectively. Meanwhile, the Russian Federation and Bangladesh have fallen out of the top 10 consumers, allowing the United Kingdom and France to take the 9th and 10th spots. Together, these 10 countries account for 59% of global footwear consumption.

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Why are brands planning to move footwear production outside China?

The pressure to move footwear production outside China stems from several factors:

1. Geopolitical Tensions: Ongoing trade disputes and tariffs between countries, particularly between the U.S. and China, have led companies to seek alternatives to mitigate risks associated with reliance on Chinese manufacturing.
2. Rising Labor Costs: Labor costs in China have been increasing, prompting brands to consider more cost-effective production locations.
3. Supply Chain Diversification: Companies are looking to diversify their supply chains to enhance resilience against disruptions, whether from political instability, natural disasters, or pandemics.
4. Sustainability Concerns: Increasing consumer demand for sustainable and ethically produced goods is pushing brands to explore regions that may offer better environmental practices or labor conditions.
5. Regulatory Challenges: Stricter regulations and compliance requirements in China can make production there more complicated and costly.

Is the supply chain ready to move footwear production outside China?

1. Alternative Manufacturing Hubs: Countries like Vietnam, India, and Indonesia are emerging as potential alternatives. However, they may not yet have the same level of infrastructure, expertise, or supply chain integration that China offers.
2. Capacity and Scalability: While some countries have the capacity to increase production, it may take time to scale up operations to meet global demand effectively.
3. Investment Needs: Significant investment in infrastructure, workforce training, and technology is necessary for many countries to become viable alternatives, and this process takes time.
4. Quality and Standards: Maintaining the quality and standards that consumers expect from footwear brands can be challenging in new manufacturing locations, particularly in the short term.
5. Economic Considerations: Brands must weigh the costs of relocating production against the potential savings, considering factors like shipping, tariffs, and labor costs in new locations.

In summary, while there is significant pressure to move production outside China, the readiness of other countries to take on this role varies, and overcoming the associated challenges will take time and investment.