Global restructuring of shoe and apparel industry in Latin America

From the perspective of employment and economic contribution, the textile industry is crucial to the economy of a country. In the middle of the 20th century, the garment industry was mainly concentrated in developed industrialized countries. However, in the past half century, it gradually spread to developing countries. In the 1960s, "redistribution of structure" occurred in the textile industry, and the Asian textile factory expanded rapidly.

Today, Asia, China, India and other countries have become the world’s leading textile and footwear producer and exporter. At the same time, as a developing country, Brazil and Mexico have emerged in the footwear industry and have impacted on traditional shoe-making countries such as Italy and Spain.

In the past 20 years, the average growth rate of the global textile industry was 1.2%. Among them, the growth rate of developed countries with a relatively high degree of industrialization was 2.7%, while the growth rate of Asian countries was even higher, reaching 3.6%.

However, many developed countries still retain important textile industries, and their products mainly face the high-end market. Benefited from industrial restructuring and modern upgrading, from the perspective of export value, some developed countries still rank among the top ten textile exporting countries in the world.

Most of the developing countries that produce textiles are also textile exporters. Their share in the global textile market has accounted for 60% since 1970. Among them, Asian countries have led the way and accounted for the bulk.

During the Cold War, attracted by the low cost of production, some developed countries' enterprises entered Eastern Europe and Central Europe, and signed subcontracts with local textile companies to deliver orders to their subcontractors for production. In the foundry process, these countries gradually established their own production chains and became an important supplier to the region.

The shoe-making industry also has the same structure and characteristics as the textile and garment industry. Its industrial structure redistribution and international trade are exactly the same.

The number of shoes produced each year in the world is 24 billion pairs, 60% of which are export shoes. The annual output of only one shoe in China reaches 9.5 billion, of which 7 billion pairs are exported to foreign countries. The production of shoes in both China and India has grown rapidly. The annual production of shoes in the two countries far exceeds that of Italy and other shoe-manufacturing countries. However, the output of Italian shoes has not risen yet, and it has now fallen to 400 million pairs each year.

The world’s largest importer of shoes is the United States, with annual imports of 1.8 billion pairs of shoes, followed by Japan and Germany. The imports of shoes from these three countries account for about half of the total global imports.

The trade volume of non-athletic shoes globally amounts to about 15 billion U.S. dollars a year, of which leather-faced shoes account for about 85%.

In the international market, "cheap Asian shoes" led by China have the advantage of low manufacturing cost. Relatively speaking, European shoes cause higher levels of design and quality, so the production costs are higher. The representative European shoe producing countries are Italy, Spain and Portugal.

The pattern of the shoemaking industry in Brazil lies between Italy and China. In the past 25 years, Brazil’s shoe production has tripled, and it has now become an important shoe exporter in the world. This has benefited from Brazil’s strategy of “supplying ladies shoes to the lower and middle classes in the United States”. Brazil's annual export value of shoes is US$1.6 billion, of which 70% are women's shoes, which are mainly exported to the United States. In the US women's shoes market, Brazil shoes accounted for 42%, Chinese shoes accounted for 38%, and Italian shoes accounted for 10%.

Now talk about the situation in Mexico. The Mexican textile industry plays an important role in the U.S. market and the Mexican home market. Since the 1990s, Mexico’s textile products have benefited greatly from Mexico’s accession to the North American Free Trade Area and the elimination of trade barriers between the US and Mexico.

However, since the beginning of 2000, shoe-making countries including China have joined the WTO, and the Mexican textile and footwear industry has been greatly impacted.

The shoemaking industry in Mexico dates back to the discovery of the New World by Columbus. Small and micro-sized enterprises account for about 85%, and the industry directly or indirectly employs 600,000 people. At present, there are about 8,000 shoe-making enterprises and 3,300 of them located in Guanajuato, Mexico, which play a crucial role in the Mexican economy.

Each year, Mexico buys an average of 2.5 pairs of shoes. Among the 250 million pairs of shoes it produces, 200 million pairs are used for export, while imports amount to 600 million pairs. The main export destination for Mexican shoes is the United States, followed by Canada and Japan.

The advantages of Mexican shoes over rivals lie in the perfect supply chain, skilled shoemakers and good communication infrastructure. In addition, Mexican shoes are relatively reasonable in price, and a number of traditional shoe-making industrial bases in China support the healthy development of the footwear industry in China.

The current problems faced by the Mexican footwear industry are the same as those of international competitors. In recent years, the global economic recession has had an impact on the demand of both domestic and international markets. Therefore, it faces a number of challenges. Mexican footwear companies should make some adjustments, for example, they can focus on the field of boots, because boots are now very popular in the international market.

The United States is the most important shoe market in the world. Regardless of the benefits of Mexico’s entry into the North American Free Trade Area, Mexico is adjacent to the United States, and Mexico’s shoes have the closest advantage in the US market.

All in all, Mexico's shoes and textile industry should transform the pressure of international competition into innovative motives and opportunities to adapt to changes in the international and domestic markets, so that Mexico's shoes and textile industry can have a bright future.