The Ministry of Industry and Trade is now planning to add handbag exports as a separate commodity in the leather export industry from 2012, after handbag exports turnover crossed US$1 billion in 2011.
|Customer picks a ‘Hami’ brand handbag at a shop in Nguyen Trai Street ( Photo: SGGP)|
Handbags constitute one of the 26 items bringing in huge profits in the leather export industry, and even though handbags, wallets and suitcases are made of leather, they are a strong commodity by themselves.
Leather is a key export item that brings in foreign currency into the country. This year’s export turnover of handbags, suitcases and wallets confirms that. Well known domestic brands like Miti, Hami and Mr. Vui have dominated the home market for years before they branched into exports.
The Vietnam Leather and Footwear Association (Lefaso) said in 2011, Vietnamese people purchased around 25 million varieties of handbags, rucksacks etc. Of the 25 million products in the market, local enterprises manufactured 15 million.
Nguyen Thi Nguyen, director of Hami Company, said the domestic market is the main market for the company, consuming 90 percent of Hami products. Hami products are now being exported to Brazil and many European countries.
Handbags and backpacks are popular in the country; but Lefaso says that this will not help increase sales as people stick to buying handbags and backpacks for their children only.
Nguyen Duc Thuan, Chairman of Lefaso, said 8 international high - profile companies are considering shifting production base from China to Vietnam, to be able to expand their facilities to meet growing world demand.
The Thai Binh Shoe Company in the southern province of Binh Duong has just tied up with Coach, a leading US retailer of luxury lifestyle handbags and accessories.
The Thai Binh Shoe Company has so far invested $10 million in facilities to complete orders to the US. The company has orders worth $10 million for 2012 and is expected to manufacture 5 million handbags.
Thuan said domestic consumption of shoes and handbags showed positive signs. Vietnamese people have refused to purchase cheap but poor quality products made in China. Nevertheless, enterprises have only focused on making student handbags and backpacks but not items like deluxe sport shoes.
So far only foreign direct investment companies have exported handbags. Lefaso now wants to see a 30 percent export turnover coming from Vietnamese handbag companies in the next few years.
Next year, the leather shoe and handbag sector is expected to have an export turnover of $8.5 billion; of which, the shoe sector could reach $7 billion and the handbag sector $1.5 billion.