The FOOTWEAR sector in Latin America
“The global health crisis also seriously affected Argentina. In addition to the consequences on the health of the population and the standstill of general activities, it brought a pronounced decline in consumption and the productive apparatus. In the case of the footwear industry in particular, it had months of almost total closures in the middle of the pandemic, although after the quarantine it began to slightly recover”.
"Despite the appearance of the second wave of coronavirus in the country, we can say that the worst is over and we are in an intermediate stage of reorganization."
“I believe that throughout 2021 we will fulfill this task, to begin to consolidate as of 2022. The objective is that the industries that have been left standing, after the critical period, do not close and that they can begin to re-arrange themselves within the new characteristics of the market”.
“As the health situation normalizes, we need all efforts to be made to put the country's economy in order, to reactivate consumption and to control imports by the government. Footwear manufacturers must make a correct reading of the evolution of the current market, to insert ourselves in a suitable way according to the new habits and needs of consumers”.
“The pandemic of the new coronavirus strongly affected the footwear industry in Brazil. If it weren't for the public policy measures aimed at preserving work, we would have lost many more jobs than the 21 thousand reported”.
“This year, however, with the advance of mass vaccination, we have already been successful, with the creation of 15 thousand jobs in the first quarter alone. We believe that with the normalization of trade, the gradual opening of physical stores, we will be able to have better results from the second half of the year, closing the year with an estimated growth of 12%”.
"The strategy of the Brazilian footwear, which was strengthened from the restrictions on physical events due to COVID-19, is to invest in the digitalization of the market, creating a hybrid alternative to promote business in the national and international market."
Referring to the internationalization of the Brazilian footwear industry, in his latest editorial of ABINFORMA, the official media of ABICALÇADOS, the president pointed out that “exporting has always been more than a business or a sale, it was a medium and long-term preparation for take even greater qualitative leaps, not only abroad, but also in our own and competitive domestic market. That is why export must be a permanent commercial strategy, as an engine for the qualification of products and favoring competitiveness”.
"Producers, importers and traders of footwear in Chile face a sharp drop in demand for all their products and an increase in production costs due to the national and international scenario due to the health crisis."
“95% of consumption is supplied mainly by imported footwear, which in 2020 fell by 28% compared to 2019. Approximately 400 footwear workshops and small factories continue to operate in the country, established mainly in the Metropolitan Region, with great difficulties to source raw materials and components. The main national footwear brands that were manufactured in Chile chose to maintain their own design and development centers for their products to manufacture them abroad. Department stores and supermarkets gravitate significantly in the importation and commercialization of footwear”.
“The constant social protests held since October 2019, many of them violent and destructive, led to constant closures of small shoe stores in the main cities of the country. This situation was aggravated by the quarantines due to the coronavirus, which forced the closure of many footwear points of sale in the most populated cities of the country. Retailers face an oversupply of imported footwear, in the midst of successive sales at low prices, aggravated by the loss of the purchasing power of the national currency since October 2019, when the social outbreak occurred”.
“The manufacture and sales of the footwear industry during 2020 registered drops of more than 33% compared to 2019. For its part, leather goods were even more affected, with drops of 41% and 35% respectively. This was caused by the closure of factories and stores during the emergency of the pandemic and by the high stocks that remained in the companies as a result of the fall in sales”.
“Another factor that influenced production in the sector was the insufficient supply of materials and supplies due to restrictions on trade and the closure of plants in Colombia and abroad. This generated an increase in the price of commodities, such as plastic, essential for the production of soles and other components, that we had to necessarily transfer to the final product”.
“The confinement, the increase in unemployment and the economic uncertainty, generated a strong retraction of income and consumption. The new living conditions directly influenced the habits of consumers, who changed their preferences towards comfort and sports products, relegating leather footwear, which had a pronounced decline”.
“From ACICAM we are working to boost the sector through the management of government support and the generation of new sales channels with the market, such as holding events and virtual business roundtables, while we wait to carry out the next edition of IFLS+EICI, in person”.
“Among the different activities that we carry out with CICEG, we are working together with the state government on a new digital platform, called OFERTA GTO -Guanajuato Offer-, so that the different stores and commercial chains throughout the country know the footwear proposal made in our state. Having large stocks will allow buyers to purchase products practically at cost. A way in which companies make cash and sell off their stocks”.
"In another order, we are collaborating with educational and government authorities to define the reopening of school activity, probably in August, which would be very important for the industry, since it would activate demand in this segment."
“Currently the footwear sector continues with a 20% drop compared to the level it had before the pandemic, which generated a loss of more than 15 thousand jobs. The situation is still very complicated and somewhat uneven, since just as there are factories working at 30% and 50% of their capacity, others are already recovered”.
"They are to highlight, the results of factories with export activity, where in the first quarter of 2021, their shipments abroad have increased by 40%, compared to the same period of 2020".
"Imports and production of footwear in Peru have been significantly affected due to the measures adopted by the government to face the Covid-19 pandemic."
“In 2020, 48.5 million pairs of footwear were imported, 9.2% less than in 2019. The CIF value of footwear imports was US $ 340 million, 30% less than in 2019. This reflects a reduction in the average price of footwear consumed in the country, a trend that continues in 2021”.
“In the first 4 months of 2021, 18.9 million pairs of footwear were imported, which represented a growth of 32.4% compared to 2020 and 15.3% compared to 2019. The CIF value of footwear imports between January and April 2021 was US $ 119.8 million, 2% lower than in 2020 and 23.3% lower than in 2019”.
“National footwear production continues to be displaced by imports. The official index of physical volume of footwear production published by the National Institute of Statistics and Informatics, reflected a fall of 29.3% in 2020 but that value may not be reflecting in all its magnitude the fall in footwear production, because the statistical sample concentrates on major manufacturers. Many small and medium-sized companies, mostly informal, have suffered greater reductions in their production volume or have simply stopped producing and the aforementioned index does not measure this effect”.
