Covid-19: level of disruption rises in Vietnam

The level of disruption in Vietnam increased since the last time we spoke with Lefaso in mid-March: “It's really a difficult time for Vietnamese footwear producers; not only due to lack of materials as in January and February, but also due to cancellation of orders by many importers from the US and Europe”.

Footwear factories continue to operate in the country, but with reduced production due to the cancellation of orders. Factories also had to implement some measures to prevent the diffusion of the disease, such as keeping safe distance in the work place (with the resulting reduction in the number of workers on the production lines) and workers are having their temperatures checked and have to wear masks at work.

Retailers are closed during Intensive Social Distancing period (which started on the 1^st April and is, at least, in place until the 15^th April), the exception being, like in many other countries, food related shops.

Local authorities are implementing several measures to mitigate the impacts of the Covid-19 in the economy, such as delay tax payments; postpone repayment for existing loans; 0% interest rates for new loans and some allocating budget for unemployment benefits.

Footwear companies in Vietnam are taking the hit and its employees already feel the consequences with rising unemployment rates due to production disruption, which means less income for families. 

“In Vietnam, the Government acted quickly against Corona virus diffusion, thus the virus situation if not severe in Vietnam (only 245* infected cases and almost cured, no dead so far). We hope that the country will come back to normal situation soon. But footwear production is still waiting for orders to come back from US and Europe, as these two large markets cover about 66% of Vietnam's footwear export”, Lefaso tells the World Footwear.

Vietnam is the 3^rd largest footwear manufacturer (1 300 million pairs; 5.4% in total production) and the 2nd largest exporter (1 272 million pairs; 8.6%), still very distant from the number one producer and exporter China (with a share of respectively, 55.8% and 64.7%) - More information about the global industry available HERE.