Mexican shoe industry stepping up sales

Friday, 27 September 2013 01:10
BY THÉRÈSE MARGOLIS
The News

It’s been a rough few years for Mexico’s shoe industry, with global competition from massive footwear giants in China, India, Vietnam and even Europe.

But according to Alejandro Gómez, director general of the Guanajuato State Shoe Manufacturers Chamber (CICEG), Mexico’s shoe industry is finally hobbling its way back into the international marketplace.

“In the first semester of this year, the Mexican footwear industry registered a 4.5 percent growth in export volumes and a 19 percent growth in foreign revenues as compared to the previous year,” Gómez told a group of journalists earlier this month at the start of the International Leather and Footwear Fair (Sapica) in León, Guanajuato.

Guanajuato is the country’s shoe capital, responsible for more than 70 percent of the nation’s footwear production.

“In fact, we sold 12.245 million pairs of shoes during the first quarter of 2013, and our products are being well received abroad. León is helping to put both Guanajuato and Mexico on the high fashion map.”

Gómez, went on to explain that in the last few years, many well-known Mexican fashion designers have begun to include footwear in their portfolios, and their opulent designs have won them accolades in the United States, Europe and even Asia.

He said that while Mexico cannot compete with Asia in terms of volume, it is gaining a significant foothold in the market based on quality.

The average cost of a pair of Mexican shoes is $21.50, he said, dramatically higher than the average cost of a pair made is Asia, $7.50.

Gómez said that last year Mexico exported a total of 25 million pairs of shoes, primarily to the United States.
“We may have suffered some setbacks when we first joined the global market after the opening of our footwear industry in the 1990s, but we are now standing strong in the world market and facing the challenges of international competition,” added Fernando Márquez, president of the SAPICA organizing committee.

But while León may be gaining international acclaim for its quality designer goods, the Mexican shoe industry is facing at least one major challenge in its own back yard.

Two years ago, the Mexican government lifted import tariffs on Chinese footwear, and suddenly the domestic market was flooded with a deluge of low-price shoes from the Asian giant.

“We are literally being inundated by Chinese goods,” Gómez said.

“In the first year alone, we witnessed a 50 percent increase in the sale of Chinese footwear compared to the same period the year before.”

Consequently, he said his chamber is currently studying a proposal to ask the federal government to implement an antidumping suit against China and Vietnam.

Because over 80 percent of Mexico’s shoe producers are small- or medium-sized companies, most of them do not have the benefits of economies of scales that the large Chinese producers have and are ill-equipped to compete in the international market because they lack global sales infrastructure, he said.

Gómez said that the lion’s share of the Asian imports are being sold at below cost and have been bankrolled by government subsidies and unjust labor practices.

Consequently, if the trend to import cheap Asian shoes continues at the same pace, as many as 200 national firms could go bankrupt and more than 35,000 industry workers could lose their jobs, he said.

“Put simply, Mexico’s shoe industry is being threatened by unfair trade practices on the part of Asian producers,” he said.

In the past, national manufacturers were protected by the Mexican government, which for most of the past 20 years levied a compensatory 35-percent tariff on shoes originating in Asia.

That tariff barrier was lifted two years ago.

Sapica and other shoe industry organizations have appealed to the Economy Secretariat to halt the torrent of cheap Asian footwear into the Mexican market, but so far to very little avail, so Gómez said that national producers will have to find others ways to survive in a free-market economy.

León, which manufactures about 250 million pairs a year, 1.6 percent of the global supply, has traditionally produced low-end shoes for the domestic market.

“We cannot compete against cheap quality, mass-produced shoes,” admitted Márquez, “but we can compete in quality, and that is the high-end market we are going for.”

“Basically, Mexico’s fashion industry is still in its infancy as far as the international market is concerned,” said Gómez.

“Most of the world has yet to discover Mexican designs. Mexico has the craftsmen, the raw materials and the creativity to be a major fashion trendsetter. All we need is the right platform to present our styles to the outside world.”

Because the annual SAPICA fair is attended by major wholesale buyers from the United States, Europe, Asia and South America, Márquez said that it is an ideal starting point to draw attention to Mexican fashion.
The National Footwear and Leather Goods Fair is held in León every April and September at the 45,000-square-meter Polyforum with the participation of more than 2,800 wholesale exhibitors from Mexico, Italy, Spain and Colombia.

An estimated 12,000 buyers from Mexico and abroad attend each year., Gómez said.