China, which still maintains its status as the "world's factory" for cars, toys, and computers, no longer does so in the sneaker industry. As global brands shifted their supply chains to Vietnam, China ceded its leading position in sneakers. With major corporations such as Nike, Adidas, and Brooks mass-producing at factories near Ho Chi Minh City, Vietnam has established itself as the world's largest sneaker producer.
According to the New York Times (NYT) on the 17th (local time), China grew into the center of the shoe industry after its opening in the 1980s on the back of cheap labor and large-scale production capacity. Taiwanese and Korean corporations moved factories to China and expanded production bases, and as hundreds of thousands of workers flocked to factories, it cemented the title of "the world's sneaker factory." But starting in the 2010s, rising wages and ongoing copyright infringement controversies triggered an exodus of corporations. Vietnam, by contrast, has rapidly emerged as an alternative base for global brands by touting policies friendly to foreign investment and a young demographic profile.
In particular, China's border closures early in the COVID-19 pandemic accelerated the shift. As global supply chains were disrupted, shoe companies did not hesitate to move production bases to Vietnam. Tony Lee, a sneaker industry executive who moved to Ho Chi Minh City after working in Oregon, said, "Vietnam's opening was reminiscent of China's opening in the 1980s," adding, "the industry's center of gravity has shifted."
For local Vietnamese workers, the booming shoe industry is serving as an opportunity to improve quality of life. Workers who joined the first factory that opened in the rice fields on the outskirts of Ho Chi Minh City as teenagers have supported their families for decades. One female worker said, "I didn't even know how to make shoes, but with a stable income I was able to buy a house and land."
However, some say it will be difficult for Vietnam to fully replace the stature China once held as the "world's factory." That is because a significant portion of the global supply chain still depends on China. A substantial amount of key components such as running shoe insoles and rubber raw materials is imported from China. Jones & Vining, a U.S. corporation that makes lasts and insoles, set up a large production hub in Vietnam and stressed that its "dependence on China is low," but some materials are still sourced from China.
Political uncertainty has also emerged as a risk factor. President Trump this year threatened to impose a 46% high tariff on Vietnamese shoes, and although a trade deal later lowered it to 20%, industry anxiety intensified. Nike said that global tariffs would result in about $1 billion in additional expense.
A local Vietnamese sneaker industry official said, "The complexity of supply chains and political risks remain a burden for Vietnam's manufacturing sector."