In 2020, the global footwear market was estimated at US$365.5 billion and by the end of 2021; the market is expected to reach a value of US $430 billion and rising at over 4% CAGR through 2031. Bangladesh is currently ranked 8th in the world footwear market in terms of production volume. According to EPB, Bangladesh had exported $669.91 million worth of footwear FY20-21(July-March). The domestic market size of footwear is about $170 million. Of the total footwear production in Bangladesh, 20-25 percent is used to meet domestic demand, while the rest is exported.
Last year, the financial loss of the footwear industry in Bangladesh was about TK 20 crore. The plight of the footwear industry began at the end of March last year.
The plight of the footwear industry began at the end of March last year. The owners closed the factories on official orders of lockdown due to the coronavirus.
Footwear production fell by about 40 percent as workers did not come to work and demand in the market was low. Later, when the factories opened in June of that year, the pandemic even then did not subside. As a result, factory owners could not catch last year’s season.
After that, the workers of the footwear factory also spent lazy time in the winter season. As a result, factory owners are looking forward to the summer in the footwear industry.
Nevertheless, even in these difficult times, the owners have to bear all the expenses, including the rent of the factory and the wages of the permanent workers, which causes financial loss to the footwear industry.
Also, due to the ongoing lockdown, buyers are confused about the market demand and domestic wholesalers are not able to come to the factory to buy footwear. Besides, prices of other raw materials have also gone up. Some raw materials have to be imported. However, importers have increased the price of raw materials as shipments have stopped.
Manufacturers are hesitant as the price of raw materials for making footwear has gone up due to the lockdown. The prices of raw materials required for making footwear have also gone up. Last year, the price of a chemical that was $2 per liter is now $3.54. Before the lockdown, the price of one yard of foam was 380-390 Tk, now that foam has to be bought for 500 Tk. At this time, the big factories sell footwear on an average of Tk 1 to 1.5 crore and small factories sell footwear worth Tk 20-25 lakh.
Footwear brands like Bata, Apex Footwear, Fortune Shoes, Fortune, Bay, Hamco, Jennys, Crescent, Vibrant, Leatherex, etc. are having a hard time with the thin presence of customers. Bangladesh government has already taken several initiatives to support the footwear industry under project EC4J (Export Competitiveness for Jobs (EC4J) Project). The Ministry of Commerce has launched a $10 million fund for the footwear industry under the EC4J project in the first month of 2021.
“The epidemic situation was improving at the beginning of the year but sales of footwear products in both domestic and foreign markets have not increased yet’ said Mohiuddin Ahmed Mahin, Chairman of the Bangladesh Finished Leather, Leather Goods, and Footwear Exporters Association. Now that the epidemic is getting worse, the Bangladesh government has issued a lockdown.
Most domestic sales are based on two major events in Bangladesh Eid al-Fitr and Eid al-Adha. So, if the epidemic impacts continue like this, the footwear industry will face a decline from both domestic and foreign buyers.