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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Shoes & Footwear: Indonesia the World's 5th-Largest Exporter

Thursday, November 09, 2017 > 09:33:45

Indonesia Investments

Ngakan Timur Antara, Head of the Agency for Industrial Research and Development (in Indonesian: Badan Penelitian dan Pengembangan Industri, or BPPI), said Indonesia occupies the fifth position in terms of the world's largest leather and footwear (shoe) exporters.

Only China, India, Vietnam and Brazil are bigger footwear exporters on a global scale. However, being among the top five largest exporters does not mean Indonesia controls a big chunk of the market. Currently, Indonesia only holds a 4.4 percent market share.

Therefore, Antara says it is important for Indonesian footwear producers and traders to improve the quality, design and brand of their products. This way, Indonesia can grow further as a major shoe exporter in the decades ahead.

Another crucial matter - to improve the competitiveness of Indonesian shoe exports - is to increase the domestic supply of raw materials (especially leather). However, the quality of the raw materials that are sourced domestically need to have sufficient quality.

Hence, attracting more investment in the downstream and upstream fields of Indonesia's footwear industry is important. But investment in this industry is showing good progress. Antara expects investment in this industry to reach IDR 62 trillion (approx. USD $4.6 billion) up to the end of 2017, or about four times higher than last year. That would be a great result.

One of the biggest challenges for Indonesian footwear entrepreneurs is that consumers tend to choose branded products. Antara therefore advises that Indonesian footwear businesses should first target to become leading brands in Indonesia itself. After local brands have been established as the top brands in Indonesia, then efforts should be made to boost brand-awareness of Indonesian shoe products abroad.

Based on data from Trade Map, export growth of Indonesia's footwear industry continues to climb from year to year. Antara said that in 2015 the leather and footwear industry of Indonesia recorded a transaction value of USD $4.85 billion. This figure rose to USD $5.01 billion in 2016, up 3.3 percent (y/y).

Such growth is driven by three factors, namely investment, technology, and human resources. "These three factors must complement each other", Antara added.

While attending the opening ceremony of the Leather, Leather Products, and Footwear Exhibition 2017 in Jakarta on Tuesday (07/11), Antara also advised local leather and footwear industries to improve the quality of their products by using natural ingredients.

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