Global Footwear Market to Reach US$195 Billion by 2015

World Footwear Market was projected in 2007 to reach 13.9 billion pairs corresponding to a value of US$192.4 billion by 2010. New estimations point that the total value of this industry will rise to US$195 Billion by 2015, what

happens to be nearly 2.5 billion in five years.

The global footwear industry accounts for the production and sales of more than 2 billion pairs of shoes around the world each year. Rapid globalization and the 2008 to 2009 economic recession have impacted operations and sales across the industry.

Global Footwear Market to Reach US$195 Billion by 2015Premium priced branded athlete footwear market, which exhibited resilience at the start of the recession, has witnessed quick deterioration in business opportunities, with the number of sports participants and enthusiasts declining. Against this backdrop, global market for Athletic Footwear is expected to increase at a modest pace during 2007 through 2015 period.

As presented in the research report titled "Footwear: A Global Strategic Business Report" published by Global Industry Analysts, Inc., the prolonged world economic recession has taken its toll on the world footwear market with sales witnessing erosion in developed countries and growth slowing down considerably in developing countries.

Household demand retracted, especially in the developed countries, as a result of rising rates of unemployment, falling disposable incomes, reduction in household wealth, high energy and food costs, plummeting per capita spends and crumbling consumer confidence. Decline in income levels have reduced the spending on clothing especially apparel and footwear (including casual, outdoor, sports, and formal footwear).

Although luxury is widely touted as a habit difficult to break, the prolonged severity of the economic slowdown has elicited declines in spending and the low tide has stranded growth with wealthy consumers gradually cutting back on lavish, luxury lifestyles. This scale back on spending by High Net Worth Individuals (HNWIs) has hurt the luxury footwear segment with demand reeling under the impact of reduced lifestyle and passion spending. Destabilization of net worth among individual consumers is a primarily reason fingered for the soft demand for luxury brands.

The economic pressures of the recession impacted consumers' interest in taking up sports, and the drop in sports participation is reflected in the widespread postponement of renewal of club membership fees. Key factors fingered for the drop in sports participation, especially among lower income households, include high unemployment rates and the resulting loss of corporate benefits. For most sporadic players, footwear is not a necessity when income levels fall behind the inflation curve. Sharpening the blow on the athletic shoes market was the dearth of fashion innovation, which was also the result of investment cutbacks on product development by manufacturers.

United States and Europe occupy the leading positions, accounting for a major share of the global Footwear market revenues, as stated by this market research report. Region-wise, developed markets bore the brunt of the recession pummeled by the financial crisis, which was the deepest in North America and Europe, and demographic factors, such as, aging population and falling birth rates.

Cogitamus Consulting estimates the global footwear market at retail grew two percent over the 2007 level of $189.3 billion to $192.3 billion in 2008. Though the U.S. market grew at an annual rate of six percent between 2004 and 2008, growth in 2008 was much more subdued at less than two percent. For the American footwear industry, an ongoing consumer paradigm shift in attitudes towards greater frugality and less conspicuous consumption means high-flying fashion brands may suffer at the expense of less expensive alternatives.

Regarding the Old Continent, the European Confederation of the Footwear Industry has just bowed to pressure from EU governments to end the duties of 16.5 per cent for China and 10 per cent for Vietnam shoe imports. In return for European shoemakers - based mainly in Italy - allowing duties to expire at the end of March, the EU announced it has agreed to conduct weekly monitoring of shoe imports. Duties affecting leather shoe imports worth hundreds of millions of euros per year have been in place since 2006. Their decision to set the duties at 16.5 per cent and 10 per cent for China and Vietnam respectively, was made to counter what the EU said was illegal market dumping by the two countries' exporters.

Developing markets have and will continue to post quick recovery, given the growing Asian appetite for mass consumption of footwear, globalization of the industry, and rising number of sports enthusiasts in the region. Additionally, restoration of economic health and growth fundamentals like improving consumer sentiment, income levels, employment levels, and resurgence in discretionary spends, are more wholesome than in comparison with developed economies. Volume sales in Asia-Pacific are expected to surge at a CAGR of 3.7% during the analysis period.

 

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