Footwear Manufacturing
Companies in this industry make footwear, including athletic, casual, and dress shoes, as well as boots, sandals, and slippers. Major companies include Nike, Skechers, and Wolverine Worldwide (all based in the US), along with Adidas and PUMA (both based in Germany), ASICS (Japan), and Yue Yuen (China).
The global footwear market makes about $380 billion annually, and is expected to reach about $470 billion by 2028, according to Statista. Top exporting markets include China, the US, Germany, Japan, and the UK, according to the World Population Review.
The US footwear manufacturing industry consists of about 220 establishments (single-location companies and units of multi-location companies) with sales of about $1.8 billion.
Competitive Landscape
Demand is driven by fashion industry trends, demographics, and consumer disposable income. The profitability of individual companies depends on their ability to design and market shoe models that effectively target consumers' tastes and preferences. Big companies have economies of scale in distribution and marketing. Small companies can compete successfully by specializing.
The US industry is concentrated: the top 50 companies account for about 95% of sales. Many of the major shoe companies in the US are mainly owners of brand names that contract to have shoes made by independent manufacturers in other countries. Because of the lower costs to manufacture footwear abroad, imports account for nearly all of the US market. The largest suppliers to the US are China, Mexico, Canada, Japan, and Germany. Major export markets for US footwear include Canada, Mexico, China, Japan, and the UK. Exports account for about 85% of US production.
Some large US producers, such as New Balance, make a portion of their shoes in the US; some smaller operations manufacture all their shoes in the US. The popularity of American brands around the world has provided a growth opportunity beyond the mature US market. NIKE, for example, receives about 60% of its revenue from international sales.
Competitive Advantages:
Predicting Fashion Trends -- A company's success depends on its ability to make shoes that meet consumer preferences, which can be fickle and difficult to predict. Superior product design and innovation are key differentiators.
Marketing to Demographic Groups -- Companies classify footwear by age, gender, and lifestyle in order to reach the right consumers and grow sales. For example, teenagers are more likely to purchase high-end athletic footwear; baby boomers tend to seek stylish but comfortable shoes.
Managing International Operations -- The majority of the world's footwear is manufactured in Asia. Brands that outsource manufacturing must be able to manage risks associated with doing business abroad, including delays in cross-border shipments and compliance with multiple sets of regulations.
Companies to Watch:
Nike is the world's #1 shoe and apparel company. The company makes shoes for basketball and soccer (football), running, men's and women's training, and other action sports under its namesake brand, as well as brands such as Converse and Hurley.
Adidas sells shoes and apparel in more than 160 countries under the Adidas and Reebok brands. Footwear is the company's biggest and fastest-growing product category.
Wolverine World Wide's long list of footwear brands includes Merrell, Hush Puppies, Sebago, Chaco, Sperry, Saucony, Keds, and Stride Rite, among others.
Products, Operations & Technology
For US manufacturers, major products include women's footwear for more than 50% of sales, other footwear such as slippers account for about 30% and wholesale
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