LEATHER FOOTWEAR INDUSTRY

IN SOUTH-CENTRAL AMERICA

Group 3
 AGENDA
01 02 03 04

General PESTLE Specific SWOT

information Analysis information Analysis
01 Machu Picchu is a cultural heritage site of …?
A. Peru
B. Mexico
C. China
D. USA
02 …is the only country in South Central America that has
coastlines on both the Pacific Ocean and the Caribbean Sea
A. Venezuela
B. Costa Rica
C. Colombia
D. Panama
 01

General
information
 Peru Colombia

Land area 1.2 million 1.1 million

Population 32.51 million 50.34 million

Source: World Bank 2019

01 According to data collected from International Trade Center in 2019

COLOMBIA PERU
• Vietnam exported: 492,448 thousand USD • Vietnam exported: 341,370 thousand USD

• Vietnam imported: 16,474 thousand USD • Vietnam imported: 81,404 thousand USD.

Top 2 exports and imports of Vietnam to Colombia Top 2 exports and imports of Vietnam to Peru

HS Code Exports HS Code Imports HS Code Exports HS Code Imports

8517 260,807 4407 8,277 8517 141,783 2301 55,173

5509 33,484 3004 2,165 6404 39,660 7901 12,374

 02

PESTLE
analysis
POLITICAL
COLOMBIA PERU
The country commits to encourage global
The overall political system of Peru
General integration. However, corruption and
is very stable.
security remain as major concerns.

Enjoy access to free markets in Latin America

(such as ALADI)
Custom Peru is a member of CPTPP
FTA with large market (Canada and the US, EU)

Vietnam hasn’t had any trade agreement

Footwear from Vietnam will be
Tariff with Colombia so Tariff for imported footwear
exempted from tariff under the
is subject to MFN tax rate (ranging from 1% to
agreement of CPTPP
40%)
ECONOMIC
Colombia Peru

Ease of doing business Rank 67th, which is in the top 3

Ranked 76th
(evaluated by WB) highest rate in Latin America

GDP per capita 6.667 (US Dollar) 6.941 (US dollar)

Gini coefficient 50.4 42.8

Inflation rate 3.53% 2.14%

SOCIAL
Colombia Peru
Language Spanish Spanish

Religion Major is Roman Catholic Major is Roman Catholic

Peruvian is sensitive with the topics

Dancing and music are also important
such as their political past, terrorism
element
and the Catholic Church.

Culture
Clothing is almost colorful with bright colors.
Handcraft is popular

Hierarchical
Business More formal than casual and
pratices Most professional business sectors, the conservative.
standard ‘business formal’ is expected
TECHNOLOGICAL
Colombia Peru

Internet usage 35 million 24 million

Penetration 73% 73%

Internet network 4G/5G 3G

IT infrastructure rank 76th 72th

Transport infrastructure 92th 97th

Quality of road
104th 110th
infrastructure
LEGAL
COLOMBIA PERU
Tax payment Tax payment
- Rank 21th in Latin Region - Rank 13th in Latin Region
Taxation - 240 hours per year - 260 hours per year

Corporate income tax: 33% (2018) Corporate income tax: 29.5% (2018)

High levels of physical contraband Stricter penalties for IP thief, but

IP right
and digital content piracy enforcement remains weak
ENVIRONMENTAL
COLOMBIA PERU
The air quality is considered The air quality is considered
moderately unsafe (in accordance moderately unsafe (in accordance

Population with the World Health with the World Health

Organization’s guidelines) Organization’s guidelines)

Aim to achieve 30% per cent Commit to reduce its greenhouse

reduction in greenhouse gas gas emissions by 20% by 2030, while
Climate
change (GHG) emissions and a reduction in another 10% cut could be
the country's levels of vulnerability achieved with international support
by 2030
 03
Specific
market
information
 Vietnam's footwear export value
(2016 - 2018)
100000000
100000000 93910290 92715060
90000000 90000000
83053580
78787730
80000000 80000000
69938690 69199470
70000000 70000000
60000000
60000000
50000000
50000000
40000000
40000000
30000000
30000000
20000000

10000000 20000000

0 10000000
2016 2017 2018
0
Export value 2016 2017 2018
Export Value

PERU COLOMBIA
Vietnam's footwear export market share over years

PERU COLOMBIA

9% 13%
8%
6%

9%
55% 9%
52%

19%
20%

China Vietnam Brazil Indonesia Others China Vietnam Brazil Indonesia Others

Source: World Bank 2018

 04

SWOT
analysis
S
W
O
T Strengths
 Vietnam is highly appreciated for political stability and
social safety, attractive market for traders.

 Government has many incentive policies and measures

to encourage leather footwear industry

 The number of people in working age in Vietnam is large

 Labor costs for footwear industry are relatively low in

Vietnam

 Vietnam's footwear products have been accepted by

tough markets like the U.S., EU, and Japan.
 Weaknesses
S
W
O
T
 Value added for footwear products depends significantly on upstream activities, such as
design, brand names, marketing and sales, of which Vietnamese producers have not
owned comparative advantages in competition.

 The raw material capability is not satisfied in terms of both quality and quantity.

 Management skills and technical production are poor, labor productivity is not high. No
strategic training plan for human resources for high quality footwear production.
S
W
O
T Opportunities
 CPTPP: a schedule stated to lower the tariff on
Vietnamese Footwear will strengthen the
comparative advantages of Vietnam footwear
industry

 5% of Peruvian import and export companies are

small and medium => the market is relatively suitable
for the level and scale of the Vietnamese approach.
S
W

Threats
O
T

 The remote geographical distance makes

businesses afraid to approach the market

=> Higher transportation risk and cost

 Political problem may arise which can

affect directly to the environment.

 Threat from competitors in China

THANK YOU
for listening