World footwear consumption, which fell more than 20% last year, is expected to increase 2.8% this year. But pre-pandemic levels are only expected to be achieved again in 2023. Data are from the most recent Business Conditions Survey, a survey carried out by APICCAPS – Portuguese Association of Footwear, Components, Leather Articles and their Substitutes among specialists from more than 40 countries within the scope of the World Footwear, the project for the evaluation of macro trends in the sector.
Conducted in March, the survey obtained 141 valid responses from 42 countries, most of which were from producers, but also from retailers, business associations and other industry experts. 52% of responses came from Europe, 21% from Asia and 14 and 8% from North and South America, respectively. The African continent contributed 5%. The uncertainty is transversal, with respondents apprehensive about the declines in demand, both domestically and internationally, but also with the financial difficulties that companies face. The rising cost of raw materials is “a growing concern”.
“Although the launch of the vaccination plan brings hope to the world economy, the projections for 2021 are still highly uncertain given the increase in the incidence of covid-19 and the emergence of new variants”, it can be read in the report, which Dinheiro Vivo had access. However, the global outlook is “positive”, as most respondents believe that there will be, in the next six months, an increase in footwear sales, unlike the last survey. In addition, more than half of the responses point to price stabilization, with even a third of respondents anticipating an appreciation of products.
Overall, expectations point to a 2.8% growth in sales in the sector. A number that contains different realities. The study highlights that most experts expect “moderate growth” in consumption in 2021, between 1.5% and 5%. If forecasts are correct, shoe consumption is expected to grow 5.8% in South America, 3.8% in the United States and Canada, 2.8% in Asia and only 2% in Europe and Africa.
Asian experts are the most optimistic, with 55% of responses pointing to conditions for sales growth, in quantity, in 2021; in Europe, North America and South America, the number of respondents predicting decreases in consumption exceeds the optimists, being 38%, 30% and 50%, respectively. In terms of prices, the situation is different. In Europe, there is a focus on stabilization (only 25% point to an increase in prices, but 16% believe that they will even go down), while in the Americas, opinions are strongly divided. Both in the North and in the South, the percentage of respondents who point to price stabilization is the same as those who believe that there will be an appreciation of footwear in the coming months, being 50% in the countries of South America and 45% in the USA and Canada.
It is also important to take into account the loss of US land in world consumption in the sector. It is a trend that comes from behind, but which will be accentuated: in 2025, the American market should be worth, only, 10% of the world sales of the sector, five percentage points less than today.
As for the main difficulties of companies, half, or almost, of the respondents point to “insufficient demand” in both the domestic and international markets. These are followed by financial problems, raw material costs and international competition, pointed out by 44%, 41% and 23% of respondents, respectively.
Regarding retail prospects, the disparity between online and traditional commerce is significant, with around 80% of respondents betting on a growth in electronic platforms in general, while more than 40% believe that sales in shoe stores or similar stores will continue to fall. It is no wonder, therefore, that in post-covid investments, digital communication emerges with enormous prominence, alongside sustainability, marketing and logistics. Investment in industrial processes comes only in fifth place.
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