On August 19, 2015, the Accessories Council attended the FNPlatform Show during MAGIC in Las Vegas entitled Footwear Distributors and Retails of America Presents: Omnisourcing in an Omnichannel World.
Presentees included Matt Priest (President of the FDRA), N. Mohan (Vice President of TATA International), and N. Bhasin (Regional Chairman-West of the Council for Leather Exports).
Photo courtesy of www.treschicnow.com
Overview From FDRA:
2.3 Billion pairs of shoes are imported to the USA each year—that is over 7 pairs of shoes per individual. Most of those shoes (79%) come from China, with 95% of the shoes coming from just 3 countries, China, Vietnam and Indonesia. The overall reliance on China is starting to fade a bit with athletic shoes leading the charge of alternative sourcing.
The possibility expanding the Trans Pacific Partnership, (a free-trade agreement) a 12-nation fair trade agreement could save the USA a lot of duty. In fact, by adopting this new policy including Canada, USA, Mexico, Peru, Chili, Singapore, Japan, Vietnam, Brunei, Malaysia, Australia and New Zealand. The proposal would save companies and consumers $400 million by eliminating the duty. This would be a big win for growth of the category.
- Cambodia has had a 134% increase in footwear production, but this is off of a very small base.
- India is also growing at a nice pace of 10% annually—there are some tremendous opportunities in India to both source and sell shoes
- The Dominican Republic already offers duty-free imports, but only 1.4% of the volume coming to the USA is from the DR. May be more opportunity there.
Overview from Mr. Mohan:
Made in India: The government is stepping up to make it easier for production and foreign investors. India has a $500billion retail base today, with a projection of $1.3trillion projected by 2020.
There are multi-opportunities to develop business in India:
- Opportunities to introduce and grow your brand
- Opportunity to manufacture in India
- The economy is on strong footing, it’s the 7th largest GDP and the 3rd Largest purchasing population
- Land is amply available
- India is the 5th largest generator of electricity with a 8.5% growth
- Interest rates on savings are high
- It’s getting easier to obtain an employment visa
- There is plenty of manpower with more entering market—356 million people are aged 10-24 years
- The government is training the population, so no shortage of labor pool
- Demographic break
- 65% of the population is less than 30 years old
- 5-7 million people are “Super Rich”
- 70-80 million are “Consuming”
- 250-300 million are “Climbing” and aspiring to consume
- India produces 2 billion sq. ft. of leather annually, 10% of the global production
- They export $6.5 billion in leather
- There is no duty on hides coming from India
- More “zero liquid discharge” factories and cleaner production options
Footwear has a $5 billion base with a $26 billion projected business (men’s footwear is 46% of the market) Footwear consumption by Indian citizens projected to double from 2 pairs to 4 pairs by 2020. If you are thinking of new sourcing options or selling, there is certainly opportunity in India.
Our President, Karen Giberson, walked the booths in footwear and accessories. The men’s collections showed strength and quality. Women’s casual shoes, flats and boots also seemd possible, particularly if you are coming with your own designs. The same was true of their accessory and leather apparel assortments.
FDRA: Founded in 1944, the Footwear Distributors and Retailers of America (FDRA) is the oldest, largest, and most effective footwear trade association in the U.S. It represents the full breadth of the footwear industry, supporting more than 100 companies and over 200 brands, from research, design and development, to manufacturing and distribution, to retailers selling to consumers all over the globe. What FDRA does is simple: It advocates for lower costs for consumers, allowing its members to sell more shoes and create jobs.
Council for Leather Exports: The Council for Leather Exports (CLE) is the single largest and Apex trade promotion organization of the strong and rapidly growing Indian leather & leather products industry. CLE is committed towards the overall development of Indian leather sector and achieve higher export growth to enhance India’s share in global leather trade. CLE is functioning under the aegis of Ministry of Commerce & Industry, Govt. of India. It is the notified Export Promotion organization for entire leather & leather products industry.