A Lot of Vietnam Shoe Companies Closed due to the Epidemic Deterioration

Vietnam International Trade News: The epidemic in Vietnam has worsened, a large number of shoe companies have closed, Adidas has increased prices, and more than 80 American companies have called Biden: Donate vaccines!

As a major producer of clothing and footwear, Vietnam’s recent COVID-19 situation has deteriorated, and strict epidemic prevention measures have forced a large number of foundry factories in Vietnam to close. This has brought considerable potential risks to the supply of goods by many large European and American multinational companies. Some brands have expressed that they are considering price increases.

Judging from the statistics from 2013 to 2019, Vietnam is the third largest producer of footwear products after China and India. In recent years, Vietnam’s clothing exports have also ranked among the top five in the world. For some brands, Vietnam is particularly important in their supply chain.

For example, 28% of Adidas’ products are from Vietnam. In fiscal 2020, almost half of Nike brand shoes will be supplied by contract factories in Vietnam, but in July at least three Nike supplier factories in Vietnam ceased production, July 19. On the same day, S&P Global Markets Caizhi issued a report warning: Nike shoes made in Vietnam may run out.

This type of production interruption will also bring direct losses to major brands. Adidas said earlier this month that most of its suppliers in Vietnam have no longer available production capacity since mid-July and are expected to suffer losses in the second half of the year. $600 million in sales. The company also pointed out that this production interruption will make it unable to fully meet the strong demand and will consider price increases. At the same time, some large brands have already begun to re-adjust their supply chains.

Affected by geo-risk factors such as trade frictions, some brands began to transfer production capacity from China to Vietnam and other countries before the epidemic. However, according to the Wall Street Journal, in order to reduce the supply risk caused by the epidemic, the American footwear provider Wolflin Group Part of the production capacity has already been transferred back to China this year. The person in charge of the company said that the current supply situation in Vietnam is very unstable.

Andy Hu, chief investment officer of an asset management company in Vietnam: Everyone is now concerned about how to get the new crown vaccine, and it will take some time. Vietnam is now facing some problems, but I think there should be a vaccine in the next few months Come in, so that more people can be vaccinated. If all goes well, I think maybe production will return to normal between the end of this year and the beginning of next year.

In mid-August, more than 80 American apparel and footwear companies, including Nike and GAP, have jointly sent a letter to Biden, asking the United States to speed up its vaccine donation to Vietnam.

The latest news shows that Cuba will provide vaccines and technology transfer to Vietnam, and the relevant Vietnamese authorities have recently admitted some problems with the current epidemic prevention and control measures and may consider adjustments.

Chengdu Pudding Mechatronic Co. CPMC authored this release. CPMC is a China online distributor of Air Compressors, genuine original parts, OEM & aftermarket replacement parts, woodworking industrial tools and air tools. Working closely with domestic and international top brands like Atlas Copco, Ingersoll Rand, Sullair, Quincy, Chicago Pneumatic, Jaguar, etc, we are proud to trade variety of quality mechatronic products with VERY competitive prices (5-10% cheaper than those on Alibaba.com.)