Hanoi (VNS/VNA) - Many leading fashionhouses have switched from Chinese to Vietnamese makers of leatherware,acknowledging the improved quality of leather craftsmanship in Vietnam,industry insiders say.

The Vietnam Leather, Footwear and HandbagAssociation (LEFASO) announced recently that Vietnam was the fifth largestexporter of handbags and suitcases in the world, accounting for 5.4 percent ofglobal supply.

The country produces over 3.2 billion USD worthof handbags, suitcases and backpacks that are exported to 10 major markets. Alarge number of factories have become trusted producers for major multinationalbrands.

Nguyen Duc Thuan, LEFASO’s Chairman, said thenation’s leather industry has grown by 10 to 15 percent per year for the pastfive years, driven significantly by international fashion brands moving theirhandbag manufacturing facilities to Vietnam.

Thuan said a majority of fashion houses havechosen to replace Chinese manufacturers with Vietnamese ones through foreigndirect investment.

In the first five months of 2017, the US was thelargest market for Vietnamese suitcases, backpacks, and handbags worth 555million USD, a six percent increase over the same period in 2016, according tothe General Department of Customs.

The EU was second, importing goods worth 365million USD, up 8.2 percent year on year.

Exports to other main markets included Japan at 146.5million USD, up 1.7 percent; China at 57.6 million USD, down 6.8 percent; and theRepublic of Korea at 52.8 million USD, down 0.4 percent.

🐎[Leather, footwear exports could reach 26 billion USD by 2020]

Nguyen Minh Phong, Head of the Economic ResearchSection of the Hanoi Socio-Economic Development Research Institute, hadsaid in June that bag producers in Vietnam should diversify their exportmarkets, with emphasis on the US and EU markets.

Phong also said that the founding of the ASEANEconomic Community (AEC) in 2015 would pose new challenges for Vietnameseleatherware industry. However, he believed the country could turn this into anadvantage and expand exports to other ASEAN markets instead.

He recommended that Vietnamese bag makers worktogether with their counterparts in Thailand, Malaysia or Indonesia to createbetter value chains, cut costs and increase productivity, as materials are moreaccessible within the AEC than outside.

As local bag and suitcase manufacturers mainlyperform outsourced tasks for FDI companies, they need to increase investment,expand production scale and improve product quality to gain a foothold in thedomestic market.

At present, China still reigns as the world’slargest producer and exporter of backpacks, suitcases and handbags, churningout more than 40 percent of total global output every year. - VNA