2022-04-13 | By Brazilian Footwear
Since the second half of 2021, the Brazilian footwear industry experiences a resumption that has as its main factor the increase in exports. Last year, 123.6 million pairs were shipped, 32% more than in 2020 and 7.3% more than in the year leading up to the Covid-19 pandemic (2019). In the first two months of 2022, footwear sales abroad followed the upward pace, adding more than 27.5 million pairs shipped abroad, 40% more than in the same period of 2021. According to the Brazilian Association of Footwear Industries (Abicalçados), in addition to the cooling of Covid-19, among the determining factors for performance are exports with brands of international customers, a model called private label.
The CEO of Abicalçados, Haroldo Ferreira, highlights that the demand for products for major international retail brands, especially from the United States, has been fundamental for the resumption of exports of Brazilian footwear. “It is the resumption of an important and historical moment of the Brazilian industry. Until the mid-2000s, when China emerged as the most important supplier of footwear in the world, Brazil was a major exporter of private label, especially for the United States, our historical main destination abroad,” says the executive, pointing out that at that time US demand migrated to Asia. After a hiatus of almost two decades, the demand of buyers from the United States for new footwear suppliers, alternative to Asian ones, has changed the “rule of the game”.
According to Ferreira, adds up to the new configuration in the international context, the evolution of the national production chain, much more prepared and competitive today than in the mid-2000s. "Today we have a complete chain, which has from components to the final product, all this with technology, quality, sustainability and design. In addition, attributes such as productive flexibility for sales of smaller batches, as well as the preparation for personalized service in the international market put us on another competitive level,” the executive evaluates, adding that China, although it is still the main footwear supplier on the planet, has been losing strength in the face of the needs of more demanding and conscious consumers, specially in North America and Europe. "The world consumer, increasingly, has paid attention to the origins of the product consumed, especially the issues of environmental, social and economic sustainability. In this context, Brazil stands out as the main supplier of footwear in the world,” he says.
In this scenario of increasing international demand for green-yellow shoes, the search for products with customer brands have been generating opportunities for Brazilian factories specialized in servicing the market of private label. Report generated by Abicalçados Market Intelligence points out that, in 2019, 15.8% of footwear shipped abroad were with brands of international customers, a number that rose to 18.2% last year. ”And it is a percentage that should grow in the coming years," projects Ferreira
One of the Brazilian companies that has specialized in exports with brands of international customers is Killana, from Três Coroas / RS. Founded in 1997 and currently with more than 70 employees, the industry produces from 650 to 700 pairs of women's shoes per day, of which 60% are exported to countries such as the United States, Italy, Chile, Bolivia, Colombia, Uruguay, Poland, Russia, Portugal and Romania. Of the total exported, according to the commercial director of the company, Marcos Huff, 90% is in the model of private label. "An Italian customer recently ordered five exclusive collections with us" he says, pointing out that they are common demands and that Killana has know-how for the service.
According to Huff, the market for exports with customers' brands has been growing and the outlook is the most positive. Huff also lists some important advantages in the export model, such as greater proximity to the end customer, in the face of retail notes, greater assertiveness of collections and learning from the relationship. “We end up absorbing the knowledge of our end consumer in different markets to improve internal processes in the company," he adds.
After registering difficulties in 2020, in the face of the difficulties imposed by the Covid-19 pandemic, Huff says that 2021 closed with a growth of 28% in exports. “We have not yet recovered all the losses, which should occur by the end of this year, when we should resume 2019 levels,” projects the director.
Exporting almost all their produced amount, Calçados Status, from Igrejinha/RS, is another example of acting in the international market, especially through the model of private label. Founded in 1977, the traditional industry of the Paranhana Valley footwear pole directly employs more than 200 employees and produces an average of 1.2 thousand pairs per day, almost all shipped to 35 countries, especially Russia, Chile and Eastern European countries.
The company's export manager, Juliana Behrend, points out that Status, from its first steps, focused on exports. "Like most companies in southern Brazil, exports started with the private label with customers from the United States. Over the years, US participation has reduced and there has been the expansion of sales to other markets that are not as usual, such as Eastern Europe and Africa,” she says. Currently, according to Juliana, 80% of exports are with the customer's brand. "There are two models of private label, one focused on the development of customers - construction, model and materials - and the other when buyers put their brands on the models in our collection”, explains the manager.
The private label model for exports, although strategically effective, requires special care on the part of the company. Juliana says that Status maintains an export department focused on customer service, which occurs both at international fairs and through physical visits or remote contacts, via telephone, social networks and emails. “We are able to maintain communication in English, Spanish and Italian. All the follow up in service, as well as after-sales, is part of the customer service process”, she highlights. Another important point, according to the manager, are the possible adaptations requested by customers. "Each market has particularities, such as fit, for example, and sometimes conversions of sizes are necessary. Custom heel or sole developments are also requested," says Juliana, adding that the company offers a wide range of material possibilities and combinations.
Faced with the current scenario and already glimpsing the post-pandemic context, Juliana says that the company projects the resumption and growth of sales in the next two years. ”The projection of growth in exports is 25% to 30% in 2022, in relation to 2021", evaluates the manager, highlighting that Brazil has become a potential international supplier of footwear in the face global demand's growth
Founded in 2007, PG4 Galleria, from Franca/SP, specializes in high added-value men's shoes and has a 100% private label model, both for domestic and international supply. With a production of more than a thousand pairs per day, of which it exports between 55% and 60% to about 20 international destinations, especially to the United States and Latin American countries, the company is a “chameleon”, according to the words of director Giuliano Gera. According to him, who accumulates the know-how of over 30 years in the footwear sector - before founding PG4 Galleria he's worked with a large exporting company in the Franca pole -, the private label production and export is like a "Lego piece". “We customize our production according to customer demand, whether domestic or international. It is quite intense work, but it brings great results,” he says. According to him, the company, which employs more than 140 employees, does not have commercial representatives and acts in the direct relationship with buyers, through physical visits and periodic meetings in digital media.
Gera points out that the sales with the customer's brand model brings competitive advantages to the company, especially in the international market. "The fight of brands, especially in the foreign market, is a duel of Titans. The private label model facilitates sales and gives more robustness to the company. In addition, it provides us with greater proximity to our client, bringing us relevant information from different markets, information that we use to improve all processes in the company", evaluates the director.
After a 2020 that registered a drop of 50% in the company's business, Gera expects a gradual recovery, which according to him should happen precisely through exports. "By 2022, our estimate is to exceed pre-pandemic results by 5% to 10%,” he projects.
With factories in Picada Café/RS, Capela de Santana/RS, Senador Pompeu/CE (two), Solonópole / CE and Cratéus / CE, the sugar Shoes group is one of the most important players in Brazil, with exclusive licenses for brands such as Coca-Cola, Aramis, Hurley, among other major brands. Founded in 1998, it employs more than three thousand people directly who produce, daily, more than 54 thousand pairs of shoes, of which they ship about 15% to more than 15 countries.
The group's International Business Manager, Mariana Martins, says that exports via private label account for more than 70% of the company's business. "Today we have clients, in this modality, in Latin American countries and in the United States, where we work in partnership with international brands recognized in the fashion market,” he says. According to her, the company carries out a continuous monitoring of the partners, especially in view of the different calendars and needs. "For the work, we maintain an internal development and sales team dedicated to the international market”, informs the manager, pointing out that some private label customers buy products from the collection without adaptations and others request specific developments according to the local market and their needs in terms of design and constructions. "Exports are of great importance for the company and guarantee a balance in the seasonality that ends up happening in the domestic market. The manufacturing year of the industries is formed by periods in which the domestic market is heated, and in other months the foreign market supplies demand", Mariana assesses.
For 2022, Mariana says that there is a growth prospect in the company's exports, especially given the higher demand from the United States and Latin American countries, following a trajectory identified in 2021, when the group grew more than 50% in gross revenue. There is a fragile environment in the international scene, especially for imports from Asia, which, according to her, should continue to help in the prospecting of international customers. “We predict expansion of at least 30% in 2022 in exports, being able to say that 20% will be via private label”, she projects.
Since 2000, Abicalçados has had the fundamental partnership of the Brazilian Agency for the Promotion of Exports and Investments (ApexBrasil). In that year was signed for the first time the agreement that gave rise to Brazilian Footwear, a program to support footwear exports that promotes the Brazilian product in the world through commercial and image actions. From the first signing until 2021, the number of international destinations went from 99 to more than 170, confirming the importance of the program not only for the increase, but for the qualification of green-yellow exports.
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