World footwear production resumed growth trend

The year 2017 was marked by positive dynamics across the worldwide footwear industry. After two years of stabilisation, both production and exports started growth, according to data from the World Footwear Yearbook 2018, published by the Portuguese Footwear Association. Growth has been driven by a combination of factors: an increase on consumption in the main Asian manufacturing countries, the growth in export flows to the developed world and the increase in the average export prices.

Production and exports resumed growth After two years of stabilisation, the worldwide footwear production resumed growth in 2017 reaching 23.5 billion pairs, 2% more than in the previous year. Although this is still far from the fast growth pace registered between 2010 and 2014 (+15.4%), it represents a return to a positive dynamic. In terms of its geographically distribution, production continues to be heavily concentrated in Asia where 87% of all pairs of footwear are manufactured. Moving in the same direction, and after falling over a two-year period,

worldwide footwear exports grew by 0.7% in terms of quantity and by 3.7% in terms of value. Growth was widespread geographically. China that is still responsible for 2 out of every 3 exported pairs of footwear has also recovered from a very negative trend. After a continued loss during the last 5 years, which cut its market share by six points, in 2017 China recovered 0.2 p.p.

Consumer confidence improved consumption dynamics On the consumption side, in 2017 India overtook the USA as the second largest consumer of footwear: a milestone in Asia’s ascent to prominence in the world market, reflecting strong demographic and economic trends. China remains in pole position at the head of the 10 largest footwear consumers. From a global perspective Asia continues to be the main region for footwear consumption (54%), followed by Europe (16%) and North America (15%).

European Players with reinforced position The European continent, home of some of the most relevant players in this industry, has been gaining ground in the worldwide exports and in 2017 reached its highest market share in a decade: 13.8% in terms of quantity. In terms of value, Europe accounts for 36.7% of the global market, this being the highest level over the last six years. Europe is also responsible for half of the world imports: with 36.2% of the total quantity and 49.3% of the value, Europe is the most important destination for footwear imports.

Average export price has increased by 40% In 2017, the world average export price increased by 3% reaching a record level of 9.18 US dollars a pair. Over the last decade, the average export price has increased by 40%, with the fastest increase among all continents taking place in Asia (+60% in the same period). The average export price in China grew by 62% in the last decade, driving much of the global growth.

The World Footwear Yearbook is available for sale at and it costs 200€ in its electronic format and 250€ in electronic + paper format.

BREXIT: ‘Find solutions to the potential chaos’

Stephen L Sidkin, Fox Williams LLP, Solicitors

Some brands, distributors, and retailers are expressing concern about what may happen in the event of a so-called hard Brexit. However, it is important to bear in mind that:

First, it is not a case of: “If we can’t agree the terms of a free trade deal, a hard Brexit will follow in March 2019.” This is because what is being negotiated at present are the terms of a

withdrawal treaty (that is, the terms on which the UK will withdraw from the EU). Whilst it is the case that the treaty is intended to contain the principles of a subsequent trade agreement, the withdrawal treaty is not a trade deal. Further, there is no certainty whatsoever that what may eventually

emerge will be a “free trade” deal. Whilst a free trade deal is to be hoped for, we could see customs duties on various ranges of goods. In addition the Article 50 withdrawal notice which the UK gave to the EU

expires at 11 pm on 29 March 2019. The next working day is Monday 1 April (no April Fool intended!)

Second, it is not a case of: “If there is no deal, goods will simply not get into the UK. At some point, the World Trade Organisation would intervene and goods may trickle through with tariffs applied.” Whilst it is very likely that there will be disruption at ports in the event of

a failure to agree a withdrawal treaty, goods will enter the UK. But a different, and more concerning, point is whether retailers will find them easy to sell when customs duties are added! Further, the role of the WTO is not to operate as a global roadside

recovery service akin to the AA. Overall brands, distributors, and retailers are right to give thought to the

issues that will accompany a failure to agree a withdrawal treaty. Further it is the case that some brands, distributors and retailers are making plans. However, in the experience of Fox Williams they represent a minority of British businesses and, as a result, we have produced the following guides for business:

• Brexit and your existing business contracts: what should you consider now?

• Brexit and your future business contracts: what should you consider now?

• Brexit and the financial implications for your business contracts: what should you consider now?

• Brexit and your business operational issues: what should you consider now?

• Immigration: What’s new for EU nationals – an update on Brexit


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