China’s Footwear Market
21 August 2019
I. Market Overview
As the disposable income of China’s huge population continues to rise and consumer demand for higher quality footwear grows, sales in the sector are not only enormous, but are increasing steadily. According to Euromonitor, the total value of mainland footwear sales in 2018 was RMB411.3 billion, a 7.7% year-on-year increase. Of this, the sales of men’s shoes delivered RMB156.1 billion in revenue, accounting for 38% of the total, while sales of women’s footwear brought in a further RMB196.9 billion (48%). Sales of children’s shoes accounted for RMB58.4 billion (14%). By 2021, it is estimated that the mainland footwear market will be worth around RMB522.3 billion.
Footwear Sales in China, 2014-2018 (RMB million)
Source: Euromonitor International
Leather shoes market:
Office workers are the primary purchasers of leather shoes, a group that is now placing greater emphasis on footwear design and style. It is also worth noting that male and female consumers have totally different criteria for buying shoes. While men tend to attach more importance to traditional designs, women are more focussed on current and up-and-coming styles. Generally speaking, the received wisdom that women own more pairs of shoes than men is borne out by factual analysis.
Sports shoes market:
Sports shoes can be classified into general sports shoes, professional training shoes and professional sports shoes, according to their specifications. Basketball shoes, football shoes, tennis shoes and hiking shoes are in relatively greater demand. As sporting events are becoming increasingly popular and people’s interest in personal fitness continues to rise, as well as greater enthusiasm for taking part in sports under the National Fitness Programme (2016-2022) and related government policies, the cost of participating in sports-related activities has become a significant part of many individuals’ monthly spending. Given the nostalgia trend in recent years, retro-style sports shoes are attracting growing interest among consumers. Traditional sports brands are scrambling to roll out classic products, for example Adidas’ Continental 80 and Reebok’s Aztec Retro Trainers.
Leisure shoes market:
As the concept of ‘leisure’ is becoming increasingly important in the lives of many Chinese consumers, the market for leisure shoes is also growing rapidly, with style and comfort seen as the two primary selling points in the sector. Typically, purchasers of leisure shoes tend to be aged between 18 and 45 and more demanding than average for brand culture and individuality, with students and office workers forming the mainstay.
Following the diversification of footwear trends and the development of urban leisure, slippers have undergone their own evolution. They have shifted from being traditional worn-at-home items to becoming fashionable and a reflection of the tastes of modern urban trendsetters. As a consequence, sales of outdoor slippers, led by leisure slippers and fashion slippers, have been growing rapidly.
Children’s shoes market:
Euromonitor data shows that China’s children’s shoes market was worth RMB58.4 billion in 2018, a year-on-year increase of 9.8%. Figures released by China’s National Bureau of Statistics show that there were 250 million children aged 15 or below in 2018, and 15.23 million babies were born during the year. In view of this, the children’s shoes market has enormous growth potential.
In recent years, many leading children’s footwear brands have attached increased importance to product quality, while there has also been a greater emphasis on producing healthier footwear. Inevitably, shoe style, quality and comfort directly influence consumer buying decisions.
Various adult footwear brands have also entered the children’s market over recent years, including mainland brands like Li Ning, Anta, 361 Degrees and Xtep and overseas brands such as France’s Repetto. Apart from developing additional revenue areas, building an extended brand allegiance has also been a priority for many of these domestic brands.
Growing numbers of mainland parents like dressing their children in a style similar to their own. Demand for children’s shoes designed and manufactured based on adults’ footwear style is therefore ever rising, with parent-child outfits becoming a trend.
As the low-carbon, eco-friendly trend is drawing more and more public attention, various brands in the footwear industry have launched low-carbon society campaigns, with some introducing low-carbon products using green raw materials, energy conservation and recyclability, in a move to enhance their brand and attract consumers. In addition, enterprises are also installing more environmentally-friendly facilities in shoe production. For instance, the wooden Y-shaped automatic rotary drum is used in the tanning, re-tanning and dyeing in the leather-making process to help maintain the drum’s internal temperature and reduce energy consumption.
Imports of selected footwear products in China in 2018:
|HS Code||Description||Import Value|
|6401||Waterproof footwear with outer soles and uppers of rubber or plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging or similar processes||3.3||32.3|
|6402||Other footwear with outer soles and uppers of rubber or plastics||440.0||37.6|
|6403||Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather||1,827.6||30.0|
|64031200||Ski boots, cross-country ski footwear and snowboard boots||0.5||1,555.7|
|64031900||Other sports footwear||23.3||162.5|
|64032000||Footwear with outer soles of leather, and uppers which consist of leather straps across the instep and around the big toe||6.4||43.7|
|64035900||Other footwear, covering the ankle but not covering the knee||219.6||14.9|
|64039900||Other footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather||1,167.8||29.4|
|6404||Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials||1,826.9||23.5|
|64041100||Sports footwear, tennis shoes, basketball shoes, gym shoes, training shoes and the like||156.2||23.2|
Source: Global Trade Atlas
II. Market Competition
The mainland footwear market is dominated by domestically made products. There are currently four major footwear industry clusters in the country, predominantly located in the southeast coastal regions. The Guangdong footwear industry base, with Guangzhou and Dongguan at the heart, focuses on medium to high-end shoes, while Zhejiang, with its footwear sector centred around Wenzhou and Taizhou, primarily produces medium to low-end men’s shoes. The western region’s footwear industry is headed by Chengdu and Chongqing, with medium to low-end women’s shoes accounting for the majority of its output. Led by Quanzhou and Jinjiang, meanwhile, Fujian’s footwear industry specialises in sporting shoes.
Three different kinds of businesses are targeting the mainland market. Firstly, there are imported brands, which mainly come from the US and Europe, with Italy and Spain particularly well-represented. Brands such as Santoni, the Italian handmade shoes company, tend to target the higher end of the market. Then there are Sino-foreign joint-venture enterprises. Primarily headquartered in Hong Kong or Taiwan, their financial resources and design capabilities once dominated the mid-range market. More recently, however, a number of domestic brands, most notably Belle, have made successful incursions into this particular sector. The overall picture is completed by the vast number of domestic manufacturers who primarily service the lower end of the footwear market.
Overseas shoe companies have been constantly coming up with intelligent and innovative products, intensifying the competition in the mainland footwear market. The basketball shoes with self-lacing function launched by Nike is one example. Users can pre-set a number of tightness settings through an app in advance, and the settings will be adjusted automatically to fit the foot’s changing contours during a game.
Mainland footwear companies are facing problems of becoming outdated, lacking design innovation and having a low price-performance ratio. In order to stay competitive, they are beginning to make greater use of innovative production techniques. For example, Shoe Cube set up a smart platform for tailor-made footwear which uses a 3D foot scanner to measure clients’ feet to produce shoe lasts and custom-fitted shoes. Meanwhile, the domestic brand Peak produced the first pair of 3D-printed running shoes on the mainland in 2017.
Overall, though, intensifying competition has led to further market segmentation. This has seen many of the better-known international and domestic sports shoes brands, for instance, focusing their efforts largely on the adult market. As competition continues to increase the market is expected to become still more segmented, which will give companies in the sector scope for targeting additional niches and sub-categories. As an example of this, with hiking having become widely popular across the mainland, a number of footwear companies have taken the opportunity to launch specialist hiking and walking footwear.
Many mainland manufacturers remain concerned over the renewed challenges from elsewhere in Southeast Asia, with several countries now offering considerable labour cost advantages over China, while also having improved access to better-resourced local industry chains. A number of mainland producers are adopting smart production facilities to bolster production efficiency and product quality and thus competitiveness. For instance, an automatic laser cutter is being used by a company to produce footwear materials and midsoles, doing away with the manual mould-making process. Another company uses a computer-controlled automatic template exchange machine which can operate automatically on a continual basis and stitch shoe uppers. Users need only input the required patterns, based on which the machine will complete the stitching.
III. Sales Channels
Retail channels for footwear in China are mainly department stores, specialty stores and e-commerce. Part of the appeal of specialty stores lies in their robust brand image, fast cash flow and prompt and effective customer feedback. In terms of their disadvantages, some customers have complained of the homogeneity of products and brands. Despite this, many companies are still opting to use specialty stores – now a common sight on the mainland – as their primary sales channels, including such high-profile businesses as Le Saunda and Aokang.
Across China, a number of footwear materials specialty centres have been built to propel the development of local footwear materials and shoe-making sectors. In Wenzhou, several trade associations have established a one-stop footwear products and services platform billed as “China’s footwear and footwear material city.” This dedicated site has signed up more than 500 tenants, all of them currently active in the sector. With a huge variety of footwear and footwear materials on offer, many from well-known brands, the platform now attracts buyers from across China and the whole of the world.
In October 2019, the Jinjiang International Shoes and Textile City Phase 1 will open for business. Some 1,500 specialised footwear auxiliary materials stores will operate there, offering one-stop service for buyers of footwear raw and auxiliary materials. Such innovative footwear materials centres serve to strengthen cohesion and sustainability of the local market.
Taking a different approach, a number of manufacturers have started to channel more of their products through hypermarkets, outlets where different types of shoes under different brands are usually grouped together and offered for sale under one roof. By doing so, they have ended their reliance on single-brand specialty stores, opting instead for the more diversified opportunities offered by the hypermarkets. Typically, many well-known brands will set lower price points when selling through hypermarkets, with middle-aged and younger consumers seen as their target purchasers.
Chain operations are also seen as having a strong competitive advantage in the footwear sector. As a consequence, large-scale chain operations are becoming ever more popular on the mainland, with both Shenzhen’s Zhengdahua and Guangzhou’s Darloro having adopted this model.
As internet penetration continues to grow, online sales have become the main retail channel for the footwear sector. Online sales mainly take two forms: one is to set up self-operated direct sales networks, as in the case of Anda Shoes; the other is to make use of large B2C e-commerce platforms like Taobao.com and Taoxie.com. Many footwear companies, such as Xtep and 361 Degrees, have started venturing into the online market.
Despite the growth in significance of online sales, footwear marts housing large numbers of manufacturers and suppliers remain important wholesale trading platforms for footwear across the mainland. Among the most popular examples are the footwear commercial district on Guangzhou’s Zhanxi Road, the Hehuachi footwear wholesale mart in Chengdu, the shoe city in Wenzhou and the Taipingyang (Pacific) shoe city in Changchun. At present, many of the specialised footwear wholesale marts in the larger cities are looking to move upmarket, while also setting out to expand their operations. This should help boost the sales of more fashionable footwear, while increasing their influence on the wider marketplace and increasing both footfall and sales within these specialist marts.
China’s wide range of footwear trade fairs, which take place in several locations across the country, are seen as one of the key means for industry players to stay informed of the latest developments within the sector.
Selected Footwear and Related Products Exhibitions in China, 2019-2020
|23-25 Aug 2019||China (Wenzhou) International Leather, Shoe Material, Shoe Machinery Fair||Wenzhou International Convention and Exhibition Center|
|5-8 Mar 2020||Greater Bay Area International Footwear Machinery and Material Industry Fair||Shenzhen World Exhibition and Covention Center|
|2-5 Jun 2020||Shoes & Leather Guangzhou||China Import and Export Fair Complex, Pazhou, Guangzhou|
|16-18 Jun 2020||Shanghai International Footwear Fair||Shanghai New International Expo Centre|
IV. Import and Trade Regulations
It is important for any overseas companies looking to enter the Chinese footwear market to take note of the relevant standards that apply. Under the Standardisation Law of the People’s Republic of China (Revised Draft 2017), there are five levels of standards – national, industry, local, organisation and enterprise. The national standards are subdivided into mandatory (GB) and recommended (GB/T) standards. The industry standards are recommended standards. Overall, footwear falls into the light industry category, represented by the standard codes of QB and QB/T respectively. Local standards are recommended standards, while enterprise standards apply internally within any given company. For all enquiries with regard to the relevant standards, visit the website of the Standardisation Administration of China.
The State Council cut Most-Favoured Nation (MFN) tariffs for 1,449 taxable items of daily consumer goods, including apparel, footwear and headgear, cosmetics and home electrical appliances, starting from 1 July 2018, to further expand opening-up and satisfy consumer demand. In this exercise, the average import tariffs for apparel, footwear and headgear were slashed from 15.9% to 7.1%.
For 2019, the tariff rates levied by China on selected imported footwear products are as follows:
|HS Code||Description||Tariff rate|
|6401||Waterproof footwear with outer soles and uppers of rubber or plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging or similar processes||10|
|6402||Other footwear with outer soles and uppers of rubber or plastics||4,10|
|64031200||Ski boots, cross-country ski footwear and snowboard boots||14|
|64031900||Other sports footwear||10|
|64032000||Footwear with outer soles of leather, and uppers which consist of leather straps across the instep and around the big toe||14|
|64034000||Other footwear, incorporating a protective metal toe-cap||14|
|6404||Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials||10|
|6405||Other footwear with uppers of leather or composition leather||6-12|
|6406||Parts of footwear (including uppers whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles; gaiters, leggings and similar articles and parts thereof||6|
Source: Customs Import and Export Tariff of the People’s Republic of China 2017; MFN Tariff Adjustment Table for Imported Consumer Goods issued by the Ministry of Finance in 2018
Under CEPA, in principle, all Hong Kong products manufactured in compliance with the rules of origin can enter the mainland market with a zero tariff rate. As such, footwear products are entitled to zero tariffs and Hong Kong companies can clearly benefit from this arrangement when accessing the mainland market.
As of 1 September 2015, a new set of standards – Technical Specification for Export Footwear (SN/T 1309-2015) – has been applicable to the inspection of China’s footwear imports and exports, replacing the previous SN/T 1309.1 – SN/T 1309.7 series of standards.
China has also updated certain footwear product standards and related testing methods, as shown in the table below:
|Standard Code||Standard Title||Replaced Standard||Executed Date|
|1||GB/T 35497-2017||Rubber shoes – Test method of flame retardant performance for rubber shoes material||-||01/07/2018|
|2||GB/T 3903.1-2017||Footwear – Test method for whole shoes - Flexing resistance||GB/T 3903.1-2008||01/07/2018|
|3||GB/T 3903.2-2017||Footwear – Test method for whole shoes - Abrasion resistance||GB/T 3903.2-2008||01/07/2018|
|4||GB/T 3903.4-2017||Footwear – Test method for whole shoes -Hardness||GB/T 3903.4-2008||01/07/2018|
|5||GB/T 3903.6-2017||Footwear – Test method for whole shoes - Slip performance||GB/T 3903.6-2008||01/07/2018|
|6||GB/T 33426-2016||Rubber shoes – Determination of organotin compounds||-||01/07/2017|
|7||GB/T 33393-2016||Footwear – Test method for whole shoes - Measurements of heat and moisture resistance under steady state||-||01/07/2017|
|8||GB/T 32435-2015||Footwear – Test method for volatile organic compounds||-||01/07/2016|
|9||GB/T 30585-2014||Safety technical specifications for children’s footwear||-||01/01/2016|
|10||HG/T 2403-2018||Rubber shoes inspection rules, signs, packaging, transportation, storage||HG/T 2403-2007||01/09/2018|
|11||HG/T 5307-2018||Test method for bonding strength of children's plastic shoes decoration fasteners||-||01/09/2018|
|12||HG/T 3664-2015||Test method of the resistance of all rubber boots (shoes) to water penetration||HG/T 3664-2000||01/10/2015|
|13||HG/T 4805-2015||Rubber shoes – Determination of adhesion between rubber parts and textile fabric||-||01/10/2015|
|14||HG/T 4806-2015||Rubber shoes – Test method for outsoles – Compression set||-||01/10/2015|
|15||HG/T 4807-2015||Rubber shoes – Test method of anti-perspiration for insole, lining and in socks||-||01/10/2015|
|16||QB/T 5212-2017||Test method of impact scuff for upper leather||-||01/04/2018|
|17||QB/T 5213-2017||Test method of compressibility for composite sole||-||01/04/2018|
|18||QB/T 5214-2017||Test method for flexing of outsole welt and foxing||-||01/04/2018|
|19||QB/T 5215-2017||Heel repeated compression test method||-||01/04/2018|
|20||QB/T 5216-2017||Test method for the breaking strength and elongation of the whole shoe’s mouth||-||01/04/2018|
|Standard Code||Standard Title||Replaced Standard||Executed Date|
|1||GB/T 36936-2018||Footwear - Vocabulary of sizing||-||01/07/2019|
|2||GB/T 24152-2018||Sports shoes for basketball and volleyball||GB/T 24152-2009||01/04/2019|
|3||GB/T 2703-2017||Footwear - Vocabulary||GB/T 2703-2008||01/07/2018|
|4||GB/T 22756-2017||Leather sandals||GB/T 22756-2008||01/12/2017|
|5||GB/T 33384-2016||Rubber footwear terminology||-||01/07/2017|
|6||GB 19340-2014||Adhesives for footwear and luggage||GB 19340-2003||01/05/2015|
|7||HG/T 5294-2018||Elderly rubber shoes||-||01/09/2018|
|8||HG/T 4808-2015||Mesh for shoes||-||01/10/2015|
|9||HG/T 4809-2015||Cross-country rubber shoes||-||01/10/2015|
|10||QB/T 2955-2017||Casual shoes||QB/T 2955-2008||01/04/2018|
- Mainland China