Vietnam produces 33% of giant Pou Chen's footwear in Q1

Vietnam produced 33% of Pou Chen Corporation's footwear in the first quarter of this year, making it the second biggest production hub for the global leader in the athletic, athleisure, casual and outdoor footwear sector.

In total, Vietnam produced 17.97 million pairs of shoes, though the portion was down from 35% in Q1/2022, according to a report by the Taiwan-based firm.

Indonesia was the biggest production location, accounting for 50%, up from 49% in the same period last year. Mainland China, the third-largest hub, made 12% of Pou Chen’s output in the period, up from 10% in Q1/2022.

Vietnam’s production for Pou Chen peaked in 2020 with 46% of the firm’s total output, but fell to 35% in 2021 during the Covid-19 pandemic, and recovered to 38% in 2022 as its factory resumed normal operations and demand returned.

In Q1/2023, Pou Chen shipped 53.9 million pairs, down 23.8% year-on-year. The Taiwanese giant earned a revenue of TWD38.17 billion ($1.23 billion) in the period, down 11% year-on-year. Footwear accounted for 59.3% of Pou Chen’s consolidated revenue in Q1/2023, while retail’s portion was 40.3% and other sectors made up 0.4%.

Pou Chen’s major footwear subsidiary Yue Yuen was operating various subsidiaries in Vietnam as of end-2022, including Prime Asia, PouYuen, Pou Hung, Pou Li, Pou Phong, Yue De, Pou Sung, and Pou Chen Vietnam.

PouYuen Vietnam, the largest employer in Ho Chi Minh City by workforce, said in May that it would lay off 5,744 employees in June and July. PouYuen attributed the move to a decline in orders, while the firm had already reduced the working hours of 20,000 staff since the end of 2022 and furloughed 2,358 in February. The downsizing is equivalent to over 10% of its workforce before the Covid-19 pandemic, and is considered the biggest cutback since its establishment in HCMC in 1996.

Footwear is a major sector for Vietnam’s export-driven economy. The sector recorded an export revenue of $10 billion in the first half of this year, down 15.2% year-on-year, according to the General Statistics Office. The June figure was $1.95 billion, down 17.5%.

Vietnam remained the biggest production hub for Crocs sandals with a 53% global market share in 2022, but down from 56% in 2021 and 75% in 2020, according to the brand’s 2022 annual report.

The country remained the biggest manufacturer of sportswear giant Nike in fiscal year 2022, and the second-largest for Adidas in calendar year 2022, according to company reports.

For fiscal year 2022, Vietnam manufactured 44% and 26% of Nike footwear and apparel products, respectively.

Vietnam accounted for 32% of Adidas footwear and 17% of apparel products last year, the second highest around the world.