Opportunity for the footwear industry to increase export market share to Canada

According to the Vietnam Trade Office in Canada, as of the end of July 2023, Vietnam had exported goods worth US$5.47 billion to Canada, a slight increase of 3.1% compared to the same period in 2022.

"Vietnam's slight export growth compared to 2022 is a fairly positive sign in the context of a continuous decline in Canada's import demand (down 2% compared to the same period in 2022)," the Trade Office assessed, adding that within ASEAN, Vietnam's export growth rate to Canada in the first six months of 2023 was still higher than all other countries in the region such as Indonesia, Malaysia, or Thailand...

Furthermore, within ASEAN, Vietnam continues to be Canada's most important import partner, accounting for 43% of Canada's total imports from the region. Notably, among ASEAN countries, the Philippines is experiencing the highest export growth rate to Canada, reaching nearly 25%. Many items that Canada is interested in importing from the Philippines, such as rubber and steel, are direct competitors with Vietnam.

After 5 years of implementing the CPTPP Agreement, Vietnam has nearly doubled its exports of leather goods, footwear, and handbags to Canada.

However, from the beginning of the year until now, the top four product groups accounting for the largest share of Vietnam's export turnover to Canada have maintained double-digit growth: Electronics and mobile phones increased by 22.1%; leather and footwear increased by 16.7%; knitted clothing increased by 16.9%; and boilers and reactors increased by 29.7%.

Specifically for the footwear industry, including transit from the United States, by the end of July 2023, exports of footwear and handbags to the Canadian market (HS codes 64 and 42) reached US$593 million, with HS code 64 continuing to grow by 16.7% and HS code 42 by 27.3% compared to the same period in 2022. Total imports by Canada for these two product groups during the period amounted to US$2.8 billion; meaning Vietnam alone accounted for over 21% of the market share.

Currently, Vietnam is the second most important exporter to Canada under HS code 64, after China; and the third most important under HS code 42, after China and Indonesia. For HS code 64, Vietnam is experiencing the highest export growth rate to Canada, while Canada has seen a significant decrease in imports from China. For HS code 42, Vietnam also has a very high export growth rate, second only to Indonesia, but far surpassing Canada's top 10 most important import partners.

"Items within the scope of support from the Leather and Footwear Association/industry are ranked 3rd in the top 10 most important export items from Vietnam to the region," the Trade Office emphasized, adding that after 5 years of implementing the Comprehensive and Progressive Trans- Pacific Partnership Agreement (CPTPP), Vietnam has nearly doubled its exports of leather and footwear and handbags to the Canadian market.

"With the growth rate recorded in the first seven months of 2023, it is entirely possible to imagine footwear becoming Vietnam's next billion-dollar export item to Canada," the Vietnamese Trade Office in Canada stated.

However, according to the Trade Office, due to the relatively small size of the Canadian market, exporting businesses need to strictly comply with the regulations of the importing market, paying particular attention to labeling regulations. Canadian importers require that imported products comply with the Food Safety and Advertising Guidelines of the Canadian Food Inspection Agency, according to the standards stipulated in the Food Safety Standards for Canadians (SFCR) Act. This includes fully stating the following information: Product name, weight, ingredients, product grade/type, country of origin, importer, lot number, and PLU code in two languages. Canada is moving towards requiring the inclusion of GTINS (Global Trade Item Number)/PLU code. Imported products must have a certificate of origin for customs declaration. Canada recognizes and encourages businesses with Global GAP, GMP, HACCP certifications, etc.

For the footwear industry, to increase market share and export value, the Vietnam Trade Office in Canada has decided to participate in the Toronto Textile and Footwear Fair, taking place from November 13-15, 2023, and will have a booth there to ensure the presence of the Vietnamese textile and footwear industry in Canada. At the Fair, the Trade Office will provide free display and networking support for the Leather and Footwear Association and its small and medium-sized enterprises at the Trade Office's booth.

"The Toronto Textile and Footwear Fair will be an opportunity for Vietnamese footwear manufacturers and exporters to promote and showcase their products, thereby opening up many opportunities for cooperation and trade connections, contributing to increasing market share and export value," emphasized the Vietnamese Trade Counselor in Canada.

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