Footwear Industry

Footwear Industry is an industry that manufactures and sells shoes. The footwear industry represents a significant area of the economy of Bangladesh for the following reasons. Firstly, footwear is a basic need like food, shelter and clothing. Secondly, it is a labor-intensive process, thus contributes considerably to employment generation. Thirdly, it has backward linkages, where leather is locally produced and forward linkages are also generated in the marketing and sales of footwear. Finally, Bangladesh enjoys a comparative advantage in the manufacture and export of footwear to industrialized countries.

From the British period to 1961, there was no mass scale footwear manufacturing firm in Bangladesh/East Bengal. At that time, mostly footwear was imported from Calcutta. But in 1962, first commercial footwear manufacturing started in East Bengal as a brand name BATA and a company named Bata Shoe Company. Later in 1967, Eastern Progressive manufacturing and began exporting footwear to USSR, Czechoslovakia and England. This is noted as the first footwear exported to international market. The number of production unites in the industry now exceeds 2000. Most unites are small and medium in size and only 23 are relatively large and have mechanized and non-mechanized production technology. The annual production capacity of the industry is about 32 million pairs of leather and non-leather footwear. The production capacity of individual manufacturing concerns varies from 750-3000 pairs a day.

Footwear industry offers a variety of shoes in the target market to maximize stakeholders value. Mostly this industry produced multiple items such as leather shoes, sports and trainer shoes, canvas and leather sandals, jute shoes, chappals and shoe uppers. It has been observed that the footwear industry in its forward and backward linkage institutions so far employed about 50000 persons.

The footwear market still dominates most sales in the domestic market with non-branded items. But the market share of branded footwear is increasing and currently stands at 30% of the total demand of the domestic market. In addition, the overall footwear market is growing at a 12%-15% rate. The footwear business has a cyclical effect as almost 25%-30% of footwear is sold during the Eid-Ul-Fitr period. Some of the local popular brands currently in the market are Bay, Hamco, Jennys, Fortuna, Crescent, Vibrant, Step, Walker, Orion, Falcon, Zeils, Shampan etc.

Since 1967, footwear has been exported and its growth trend is positive and upward. The annual export has increased from a meager tk 0.14 million in 1972 to tk 1.9 billion in 1997. Bangladesh mostly exports leather footwear and its grew by 527% between 1990-1991 and 1996-1997. Due to rapid change in global culture and fashion, in recent times demand for foreign footwear has increased. Finally, Bangladesh importing footwear from a foreign country and its rate has been growing over the years.

Bangladesh currently stands at 8th position in the global footwear market in terms of production volume. In addition, the domestic footwear market, now with an estimated demand of 30 million pairs per year, is rapidly expanding as the size of middle class grows. According to Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LGFMEAB), the local footwear industry is experiencing an annual growth rate of 21 percent. According to EPB, footwear exports from the country grew from US$61 million in the period of July-November 2007 to US$ 85 million in the same period of 2008, recording a growth of 39 percent.

Along with export growth, this industry has a prospect for future business development. The domestic market size of footwear is around tk 170 billion. Out of the domestic demand of footwear in between 200-250 million pairs a year, approximately 24 million pairs were imported in FY 2016-17. In 2018-19, Bangladesh had exported $ 607.88 million worth of leather and $ 271.53 million worth of non-leather footwear. The global footwear market was valued at $ 246 billion in 2017 and is expected to reach $ 320 billion by 2021.

Bangladesh emerges as a new hub of footwear manufacturing in the world. Present geographical and environmental competencies have motivated international investors to relocate factories in Bangladesh. In recent times, three large investors from Taiwan would set up footwear factories in the Dhaka and Chittagong Exporting Zones. Besides, the export processing zones at present have 18 shoe and leather goods factories. The footwear complex of Young One’s Korean company is under construction which is said to be the largest in Asia. [Ishtiaque Ahmed Khan, Md Wahidul Habib and Belayet Hossain]