Footwear Industry

CBI MARKET SURVEY THE FOOTWEAR MARKET IN THE NETHERLANDS Publication date: April 2008 Report summary This CBI market survey discusses the following highlights for the footwear market in the Netherlands: . Dutch consumption of footwear was € 2,413 million in 2006, or 70 million pairs, up by an annual average of 1. 3% over the period, while production fell by 7. 5% to € 82 million or 3 million pairs. . In 2006, the Netherlands imported footwear valued at € 1,793 million, or 191 million pairs. Since 2002 values are up by 3. 2% but volumes are up by an average annual rate of 9%. More than 47% of imports by value (€ 852 million) came from developing countries (76% by volume or 145 million pairs). The share of imports by developing countries is up from 41% in 2002 in value (€ 653 million), and up from 64% (86 million pairs) in volume terms. The Netherlands?? reliance on imports and its important role as an entry point for onward supplies to other EU countries makes this an important country for exporters. This survey provides exporters of footwear with sector-specific market information related to gaining access to the Netherlands.

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By focusing on a specific country, this survey provides additional information, complementary to the more general information and data provided in the CBI market survey ? ®The footwear market in the EU?? , which covers the EU market in general. That survey also contains an overview and explanation of the selected products dealt with, some general remarks on the statistics used, as well as information on other available documents for this sector. It can be downloaded from http://www. cbi. eu/marketinfo 1 Market description: consumption and production Consumption

The Dutch market for footwear was worth € 2,413 million in 2006, equivalent to 70 million pairs. The Netherlands is the sixth largest EU market for footwear. It is smaller in size than the five largest markets, Germany, France, the UK, Italy and Spain. The Netherlands accounts for 4. 8% of EU footwear consumption (3. 3% by volume). Over the review period the market has increased by an annual average of 1. 3% in value but increased by 2. 2% in volume. This was below the EU average of 1. 9% in value, and virtually equal to the average market volume increase of 2. 3%. 006 was a very good year for the Dutch footwear market. It increased strongly after reversals in earlier years. Table 1. 1 Consumption of footwear in the Netherlands, 2002-2006, € million / millions of pairs 2002 2004 2006 Population (million) Consumption per capita € value volume value volume value volume 2,290 64 2,160 65 2,413 70 16. 3 148 Source: Euromonitor, HBD, Mitex (2007) Per capita consumption of € 148 is well above the EU average of € 102. However Dutch volume consumption was similar to the EU average, indicating higher than average prices, or a demand for higher quality footwear in the Netherlands.

Compared to the average EU consumer, the Dutch are quite sensitive to fashion trends and style. At the same time, footwear should be practical and they regard comfort most highly. However, there are indications that fashion and style are gradually becoming more important in purchasing decisions. ? The major driver of the market growth in 2006 was increased sales of luxury and quality footwear, as men in particular have shown more interest in the high end of the market. Men?? s footwear saw the strongest growth in 2006, as it is most sensitive to the general economic conditions.

The peak periods in the Netherlands for footwear sales usually occur in April/May and in September. There is a particular peak for children?? s footwear in September as this is the ? °back to school? ± period. Euromonitor is forecasting the market will grow by an annual average 2. 1% in volume between 2006 and 2011. However, the market for children?? s footwear will grow at half this rate. This represents an annual average 1. 3% increase in value. Men?? s footwear will grow by 1. 8%, but children?? s footwear will only grow by 0. 4%. This is lower than figures quoted by the Dutch retail industry. They quote a growth figure of 2. % for 2007, lower than 2006, but higher than Euromonitor estimates. They both agree that increases in sales of men?? s footwear will be the main source of growth. Market segmentation The most common way to segment the market is by gender. As Figure 1. 1 indicates, women?? s footwear is the largest segment. Men?? s footwear was valued at € 637 million, an increasing share since 2002. Women?? s footwear accounted for a slightly decreasing share since 2005, and was valued at € 1,400 million in 2006. Children?? s footwear was valued at € 376 million in 2006, providing the greatest decrease in share since 2002.

Note that segmentation by gender in terms of footwear volume produces different figures. In this case, men?? s footwear accounted for 15% of volume, women?? s footwear 66% and children?? s footwear 19%. This indicates that the average price of women?? s shoes is lower than the price of men?? s shoes. Figure 1. 1 Dutch footwear consumption by gender, % value 2006 Women58. 0% Men26. 4% Children15. 6% Source: Mitex (2007) Another way to segment the Dutch footwear market is by type of footwear. Sports footwear accounted for over 20% of the market, or € 488 million, a slightly smaller share compared to 2002.

The other main footwear types are casual footwear, with a gradually increasing share, now accounting for 47% of the market, or € 1,138 million; formal footwear, with a decreasing share, now accounting for 28% of the market, or € 678 million, and evening footwear, an increasing segment, now accounting for 4% of the market, or € 97 million. Geographic segmentation is less important in the Netherlands due to the relatively small size of the country. However, differences in age and lifestyle can highlight interesting contrasts when trying to understand the Dutch market.

For example, the increasing number of older people in the Dutch population will generate increased demand for casual and sports footwear. ? In the last ten years, the proportion of Dutch people between the ages of 50 and 79 has increased from 25 to 30% of the population. There has been similar levels of decreases in the number of people aged between 25 and 49. Lifestyle segmentation can reveal buying motivations based on how people live their lives, but the growing trend of individualism in Dutch society makes it more difficult to categorise different lifestyles and draw conclusions about footwear demand.

Market trends The structure of the Dutch retail trade for footwear has been going through changes, which are shaping consumer trends. In 2006, the female consumer proved to be particularly fickle. For example, one week they may buy discount shoes, while the next week they may spend a lot on designer pumps. This makes demand harder to predict and increases the pressure on retailers to rotate their product ranges more frequently in order to keep consumers interested. The growth of clothing retailers that sell footwear is also changing the way the Dutch buy shoes.

Previously not known for a great interest in fashion, this is changing and consumers are now starting to consider their total look when buying footwear, rather than making it an isolated purchase. An interesting new development on the market was the collaboration of Reebok with the world famous Dutch DJ Tiesto who has been voted best DJ in the world several times. The Reebok Tiesto shoes are stylish and perfectly suited for dancing. The shoes incorporate a special Tiesto logo with headphones. This development may herald other initiatives in the market that attracts specialist or specific interest.

Another trend is the re-emergence of brands that existed some time ago, which have been brought back to life in another form. A good example of this is the well-known Dutch sports shoe called Quick. They used to be football boots. Now the name has been reintroduced and a whole new range of fashion-related footwear designs have been introduced using the name. This fits perfectly well with the growing sports lifestyle segment. New designs look something between a sports shoe and a boot. These products are sold by boutiques and specialist shoe shops. This trend will soon also be applied to jackets and other accessories such as bags.

Production Total production The Netherlands has a relatively small footwear industry compared to many other EU countries. Although production has been decreasing over the years, in line with the general trend seen in many EU countries, the remaining Dutch footwear industry produces high quality footwear of good repute. The value of footwear production in the Netherlands in 2006 was € 82 million, or less than 3 million pairs. As Table 1. 2 indicates, this is down from € 112 million in 2002. This represents an average annual decrease of 7. 5% in value. Table 1. 2 Production of footwear in the Netherlands, 2002-2006, million / millions of pairs 2002 2004 2006 Number of companies 2005 Number of employees 2005 value volume value volume value volume 112 3 92 3 82 3 105 885 Source: Eurostat (2007) An indication of the concentration and shrinking nature of the industry can be demonstrated by the reduction in numbers of enterprises and fall in employment in the industry. There were 165 companies as recently as 2002, employing 1,262 people. ? According to Eurostat, all Dutch footwear production was for outdoor leather footwear, although similar to some other EU countries, some production data is kept confidential. Main and interesting players Durea BV, located in Drunen, (http://www. durea. nl). Comfortable women?? s shoes. Durea reached the limit of 200,000 pairs in 1999. Since 1995 production has been spread over different countries like India and Tunisia and of course the Netherlands. Durea employs 70 people in the Netherlands and around 300 in the foreign production units. . Schoenfabriek Wed. J P Van Bommel BV, located in Moergestel (http://www. vanbommel. nl), producing men?? s formal footwear of high quality. . Verhulst, located in Tilburg, (http://www. verhulstshoes. nl). Comfortable and quality footwear for older people. . Van Lier, (http://www. anlier. nl), producing classic and outdoor footwear for men of a good quality. . Loints, (http://www. loints. com), producing comfortable footwear of natural tanned leather. Trends in production In order to survive, Dutch companies have had to specialise in products which provide added value and higher margins. This has been essential for survival as costs of production make it impossible for Dutch manufacturers to compete with low cost imports. Manufacturers have not been able to rely on the loyalty of Dutch consumers. With some notable exceptions such as van Bommel, there is no great loyalty towards Dutch-made shoes.

Hence, manufacturers have looked to export markets to maintain and develop their business. Part of this process has been to invest in training and new technologies, as well as increasing the perceived value of Dutch-produced footwear by means of branding campaigns. Some manufacturers have outsourced some or all of their production, and have perhaps retained the design and marketing specialisms at home. Most of this outsourcing has gone to Asia as costs of production are so much lower here than other parts of the world, particularly as quality standards can be high.

An example of this is the Manufacturer Van Lier. Although production of its shoes is increasing, remaining Dutch production is being transferred to India and Portugal. Increases in production of men?? s shoes is as a result of a joint venture with a company in Poland, where most manufacturing of these products takes place. Opportunities and threats + The growth of the footwear market again will provide opportunities for exporters from developing countries. The increasing variety of types of footwear outlet is creating demand for new styles to be supplied to the market more frequently.

Whereas previously a retailer may change his footwear range twice a year, now it is four times or more. The Dutch are open-minded and are receptive to new products and new design ideas, but they are also very critical consumers. Nevertheless, they are an entry point to the EU and as such can also provide good connections to other countries. + There is increasing use of the Internet for purchasing footwear. This is mainly for the purpose of making price comparisons, but it also makes the Dutch very well informed about different products.

Direct selling therefore could become a possibility for exporters from developing countries. – The growing market for fashionable footwear provides opportunities for exporters if they can produce at the prices demanded. However there is a danger in becoming too reliant on this sector of the market. If you are not able to supply quickly and change production at the short-term whim of the fashion market, you could find yourself exposed to the dangers of overtrading. The same development or trend can be an opportunity for one exporter and a threat for another.

Exporters should therefore analyse if the developments and trends discussed in this ? chapter provide opportunities or threats. The outcome of this analysis depends on each exporter?? s specific circumstances. See chapter 7 of the EU survey ? °The footwear market in the EU? ± for more information on opportunities and threats. Useful sources . There are a number of commercial research organisations that produce reports on the Dutch footwear market, but these can only be obtained at a cost. They include Mitex (http://www. mitex. nl), Euromonitor (http://www. euromonitor. com), Mintel (http://www. intel. co. uk) and Just Style (http://www. just-style. com). . Production information can be obtained from Eurostat as well as Dutch National Statistics (http://www. cbs. nl). . See chapter 6 for details of trade associations and other information sources. 2 Trade channels for market entry Trade channels The footwear distribution in the Netherlands is becoming more concentrated, but more sales are channeled through footwear specialists in this country than in any other major EU market. However specialist chains dominate the trade. Independent footwear specialists are not significant any longer.

The role of importers, wholesalers and agents continues to be important, although more large retailers are now buying directly from manufacturers and bypassing this channel. Hence exporters from developing countries would be advised to identify suitable organisations in this channel in order to reach the retail market. There are 960 agents involved in the sale of textile, clothing, footwear and leather goods. To find an agent, you should contact the Association of Intermediaries (http://www. vnt. org). They have a bulletin where you can find contacts.

There are over 3,000 wholesale enterprises involved in clothing and footwear. Interesting importers and wholesalers for developing country exporters include: o Hengst Footwear (http://www. hengstfootwear. nl). Hengst footwear sells more than 10 million pairs of shoes each year all over the world. They import direct from their production plants in China, and supply through various distribution centres in Europe. o Seelen Import, located in Rijen (http://www. seelenimport. nl). Wholesaler. Brands like Fidelio, Hallux, Softline, Lomer, Giorgio Ricci, Dunlop, Emma, Grisport, No Risk, Sanita, Sika, Smefa, Str. els. o Wijdeman Alkmaar B. V. , located in Alkmaar (http://www. wijdeman. nl). They also operate an Internet shop and deal in comfortabel and quality shoes for men and women. o Sieben, located in Kessel (http://www. sieben. nl), importer of footwear under the Carmen brand. Besides the Carmen collection own brands like Anita, Vision, Inscription and Tapas. o E. B. Shoes BV, located in Nieuwengein (http://www. ebshoes. nl). o Emmen schoenen, located in Eindhoven (http://www. emmenmode. nl), A virtual shoe and fashion shop. They offer comfortable men?? s, women?? and children?? s shoes, wedding shoes, bags and accessories and also kids fashion and various items. Retail trade The major footwear chains and buying groups dominate the market, as indicated in Table 2. 1. In 2006, there were 1,360 retail footwear businesses with a total of 3,135 outlets. In terms of numbers of outlets, 40% of these companies belong to buying groups; 40% are chain or franchised stores and 20% are independents. ? Leading buying groups Euroshoes Nederland with 337 outlets; the German buying groups Garant Schuh and Ariston Nord West Ring (http://www. anwr. de).

Garant Schuh buys on behalf of many sports footwear chains such as http://www. outdoorcenter. nl, http://www. runningcenter. nl, http://www. fairplayinternational. nl, and general footwear retailers such as Line Footwear (http://www. linefootwear. nl) and Podo Linea (http://www. podolinea. nl). There has been speculation that Intres, a clothing buying group, was planning to enter the footwear sector and introducing its own brand. Table 2. 1 Share of footwear retail distribution in the Netherlands, % value 2006 Outlet type % share Footwear specialists 77% Chain stores (incl. discounters) Buying groups (incl. iscounters) Independent stores 38% 29% 10% Non-specialists 23% Department stores/hypermarkets Sports retailers Home Shopping Others (factory outlets, clothing retailers etc. ) 5% 11% 1% 6% Total 100% Source: Euromonitor, HBD (2007) The Macintosh Group (http://www. macintosh. nl) is the largest retail chain with 228 specialist outlets of which Dolcis (90 outlets), Manfield (72 outlets), and Invito (39 outlets) are footwear outlets, while PRO Sport (27 outlets) is a sports footwear specialist. A significant development at the end of 2007 saw them bid to purchase the major Belgian retailer Brantano.

The extensive Dutch footwear retailers are divided into different sizes as indicated in Table 2. 2 below: Table 2. 2 Footwear retailers in the Netherlands, by size, 2006 7 to 10 outlets 10 to 25 outlets 25 to 50 outlets 50 to 100 outlets More than 100 outlets Albert Nolten Bovendeert Ecco Ardenberg Bristol Axi Schoenen Cinderella Invito Dolcis Scapino Dungelman Dr Adams Nelson Manfield Schoenreus Fred de la Bretoniere Durlinger Sacha Shoes Ziengs Van Haren Mevio Hessels Shoetime/Massa Schoen & Mode Munnichs Leemans Van Woensel O?? Moda Schoenen Piet Kerhof Poco Loco

Schuurman Pourvous Shoeline Van der Pluijm Shoe Outlet Van Vorst Taft Schoenen Tango Source: Locatus (2007) Sports retailers have increased their share of the trade, despite the dominance of footwear specialists. Other non-specialists such as department stores (Bijenkorf, V&D) and hypermarkets are not significantly increasing share. Clothing retailers such as Zara and H&M have a small share at the moment, but they are forecast to become much more influential in the future as fashion plays a greater part in the footwear purchase decision by more people. ?

Home shopping is reducing in importance in terms of catalogue shopping, but Internet shopping is set to replace this medium. Recommended distribution channels for exporters in developing countries differ between segments: o For low-medium priced shoes, discounters, department stores and the Internet would be the recommended distribution channel. o For medium priced (designer) footwear and children?? s footwear, specialised retailers and the Internet would be the recommended distribution channel. o These types of footwear can be also sold by mail order companies and department stores. For higher priced (designer) footwear, fashion boutique/chain, the Internet and mail order companies would be the recommended distribution channel. Price structure Due to the intensified competition in footwear, margins have been falling in the Netherlands in recent years. Although there are some national differences, footwear is a global business and margins tend to be similar in most markets. In each trade channel different margins and prices apply, with multiples of 2. 4 up to 2. 9 of the export (CIF) price as is shown in Table 2. 3. These margins will vary depending on which market segment is being approached.

The higher the market segment, the higher the margins that can be commanded. Buying groups ask for large-volume discounts, which are then passed on to their members. Table 2. 3 Overview of margins in footwear Low High Importers/wholesalers’ margins 30% 40% Agents’ margins 10% 15% Retailers’ margins 55% 75% Mark-up Export (CIF) price – Consumer price 2. 4 2. 9 VAT at 19% is added to retail prices. When selling to a new or small retailer or distributor a letter of credit is usual. Sight drafts are often appropriate for larger or well-established firms. Large buyers i. e. department stores, mail-order houses, and buying organizations prefer payment through the use of an open account. In all cases, credit checks through a bank or the Department of Commerce are recommended. More information can be found in chapter 3. 2 of the CBI market survey ? ®The footwear market in the EU??. Selecting a suitable trading partner This is a very important part of the export process. As important as finding a contact that is suitable for you in terms of the range of products that you can supply is the relationship and empathy you can establish between yourself and your partner.

The essential element of any trading relationship is trust. You must satisfy yourself that you will be happy to deal with the organisation in question over a long period. Your own judgement and instincts are most important in this respect. In relation to how you find a trading partner, the usual trade sources are an important point of contact. The Association of Footwear Manufacturers and the Association of Footwear Retailers are important contacts (see chapter 6 for contact details). The best place to meet potential ? rading partners is at a permanent trade fair, such as the National Shoecenter (see chapter 6 for contact details). It would be better to first visit an exhibition a few times before participating yourself. During a visit you can spend time looking at the stands of the main players and get a better idea of the latest fashions. At trade shows you have an opportunity to talk to potential partners on a face- to-face basis and better judge whether you would like to work with them. You could also identify potential partners from the exhibition website beforehand or from a catalogue. When selecting them (e. . importer or wholesaler) try to find out: . What footwear they sell (focussed on sports activity, leisure or fashionable). . To which target groups they sell. . In which areas they are well represented in their country. If they are exporting, to which other EU countries they sell. . To whom they sell e. g. small or large retailers, department stores, buying groups etc.. You could also find this out by looking at their website or try to find a company profile through other hosted sites e. g. of a local Business Support Organisation or trading platform, or by finding their company brochure.

You can contact interesting trade partners by mail or e-mail and follow up by phone a few weeks later. See also chapter 3. 1. 3 of the CBI Export manual ? ®Exporting to the EU??. Although you may initiate a communication by post or email, it is recommended that there is some personal communication before a trading partner is selected. You should also do a credit check of your potential trade partner, especially when an investment from your side is involved. This credit check could be done by a specialist company such as Dun and Bradstreet (http://www. dnb. com). A bank usually does not give credit ratings of its customers.

In this regard, you could also contact Business Support Organisations in the Netherlands or the commercial department of your own embassy to see if they have any useful contacts. They may even have some knowledge of contacts you may have made independently. The Dutch Retail Council for doing business with the Netherlands can be reached at http://www. raadnederlandsedetailhandel. nl. It also includes a link to the Association of Footwear Retailers (VGS). 3 Trade: imports and exports Imports Total imports In 2006, the Netherlands imported footwear valued at € 1,793 million, or 191 million pairs.

This accounted for 6. 8% of all EU imports by value, or 6. 5% by volume. This represented an average annual increase in value of 3. 2% since 2002 from € 1,582 million (9% in volume from 135 million pairs). The Netherlands was the fifth largest importer of footwear after Germany, the UK, Italy and France. Countries with similar levels of imports were Belgium and Spain. It also ranks fifth in volume terms. This growth in imports contrasted with a 4. 7% growth in exports (22% by volume). Import values were almost 30% greater than export values but import volumes were just 16% greater than export volumes.

Production fell slightly in the Netherlands and the consumer market has grown at a rate above the EU average. The Dutch market is dominated by imports, but as has been noted elsewhere, most of these imports are bound for onward transit to other EU countries. The increase in the volume of exports is a clear indicator of this as domestic production is negligible. Around 47% of imports came from developing countries (76% by volume or 145 million pairs). China was the largest developing country supplier, with imports valued at € 535 million or 114 million pairs (60% of total volume imports).

The next largest developing country supplier was Vietnam, with imports valued at € 127 million or 14 million pairs (7. 4% of volume). Apart from ? China, the three largest suppliers to France were intra-EU suppliers. Belgium has supplies valued at € 317 million, or 14million pairs (7. 2% of volume). Germany has supplies valued at € 142 million, or 6. 7 million pairs (3. 5% of volume). Italy has supplies valued at € 135 million, or 5. 2 million pairs (2. 7% of volume). The share of imports by developing countries was up from 41% in 2002 in value, and up from 64% or 86 million pairs in volume terms.

China?? s supplies increased by an annual average of 16% from € 293 million (24% by volume from 48 million pairs) over the period, while Vietnam?? s supplies decreased. Indonesian, Brazilian and Indian supplies were up, while Thai supplies were down. Belgian supplies were up. Meanwhile, supplies from Germany were up, while Italian supplies were down. Imports by product group Table 3. 1 Imports by and leading suppliers to the Netherlands 2002 – 2006, share in % of value Product 2002 2004 2006 Leading suppliers in 2006 Share € mln € mln € mln Share in % (%) Total footwear 726 518 809

Intra EU: Belgium (17. 7%), Germany (7. 9%), Italy (7. 5%), Portugal (5. 1%), UK (2. 6%) 45. 1 203 173 132 Extra EU ex. DC*: Romania (2. 9%), Hong Kong (2. 0%), USA (0. 5%), Macao (0. 4%), Taiwan (0. 3%) 7. 4 653 821 852 DC*: China (29. 8%), Vietnam (7. 1%), Indonesia (4. 3%), Brazil (2. 3%), India (1. 6%), Thailand (1. 1%), Turkey (0. 5%), Cambodia (0. 2%), Malaysia (0. 2%), Bangladesh (0. 1%) 47. 5 Leather footwear 494 402 589 Intra EU: Belgium (16. 1%), Italy (10. 7%), Germany (9. 7%), Portugal (7. 5%), UK (3. 0%) 51. 6 140 125 107 Extra EU ex. DC*: Romania (3. 6%), Hong Kong (2. %), Macao (0. 6%), USA (0. 3%), Taiwan (0. 2%) 9. 3 364 431 446 DC*: China (19. 4%), Vietnam (6. 6%), Indonesia (4. 9%), Brazil (3. 0%), India (2. 2%), Thailand (1. 4%), Turkey (0. 6%), Cambodia (0. 3%), Bangladesh (0. 2%), Egypt (0. 1%) 39. 1 Rubber or plastic footwear 84 46 96 Intra EU: Belgium (21. 7%), Germany (4. 1%), Italy (1. 7%), Spain (1. 1%), UK (1. 1%) 30. 9 26 25 11 Extra EU ex. DC*: Romania (2. 1%), Hong Kong (0. 4%), USA (0. 4%), Taiwan (0. 3%), Canada (0. 1%) 3. 5 150 172 204 DC*: China (50. 8%), Vietnam (8. 1%), Indonesia (4. 2%), Thailand (1. 1%), Malaysia (0. %), Brazil (0. 2%), Turkey (0. 2%), Laos (0. 1%), Bangladesh (0. 1%), Cambodia (0. 1%) 65. 6 Textile footwear 124 51 103 Intra EU: Belgium (22. 0%), Germany (5. 3%), UK (3. 3%), Italy (1. 5%), Spain (1. 3%) 36. 0 25 13 8 Extra EU ex. DC*: Hong Kong (1. 1%), Romania (1. 0%), USA (0. 1%), Taiwan (0. 1%), Japan (0. 1%) 2. 8 120 198 175 DC*: China (48. 6%), Vietnam (9. 1%), Indonesia (2. 4%), Thailand (0. 4%), Pakistan (0. 2%), India (0. 1%), Brazil (0. 1%), Turkey (0. 1%), Cambodia, 61. 2 ? Malaysia Other footwear 23 19 21 Intra EU: Portugal (8. 6%), Spain (7. 8%), Germany (7. %), Italy (6. 7%), Belgium (5. 2%) 38. 9 13 10 6 Extra EU ex. DC*: USA (6. 1%), Taiwan (2. 6%), Hong Kong (1. 6%), Romania (1. 2%), S Korea (0. 2%) 11. 1 20 20 27 DC*: China (29. 6%), Brazil (10. 7%), India (4. 6%), Turkey (1. 5%), Indonesia (0. 8%), Pakistan (0. 4%), Serbia (0. 4%), Tunisia (0. 4%), Vietnam (0. 2%), Colombia (0. 2%) 50. 0 Source: Eurostat (2007) *Developing Countries Leather footwear This was the largest footwear product group. Valued at € 1,142 million in 2006, this represented 64% of all footwear imports to the Netherlands (36% by volume or 69 million pairs).

This compared with a share of 63% in 2002 or € 998 million (43% by volume or 58million pairs). Hence this product group was increasing in significance in its value but decreasing in its volume contribution to imports. Intra-EU trade dominated the value supply (also 31% by volume or 22 million pairs), but this increased from 50% in 2002 (35% by volume or 20 million pairs). Belgium?? s share was up from 9. 8% in 2002. Conversely, the share of supplies from Italy and Portugal decreased, while German supplies increased. Developing country suppliers represented 47. % of all imports by value (76% by volume or 145 million pairs), up from 41% in 2002 (64% by volume or 86 million pairs). China (€ 222 million or 22 million pairs) and Vietnam (€ 75 million or 6. 6 million pairs) dominated the developing country supply of leather footwear. However, whereas China?? s supplies increased significantly, those of Vietnam declined. The other change to note was that Vietnam had similar volume supplies in 2002 but they have been clearly overtaken by China by 2006. Of the other major developing country suppliers, values and volumes from Indonesia, Brazil and India all increased.

In terms of individual products, outdoor leather footwear with other outdoor soles was the largest sub-sector, accounting for € 998 million or 87% of all leather footwear in 2006 (89% by volume or 62 million pairs). This compared with € 858 million or 86% in 2002 (88% by volume or 51 million pairs). Hence this sub-group was increasing in importance. Outdoor leather footwear with leather outer soles was the next largest sub-sector, accounting for € 95 million or 8. 3% of all leather footwear in 2006 (5. 1% by volume or 3. 5 million pairs), down from € 93 million or 9. 3% in 2002 (6. 1% by volume or 3. 5 million pairs).

Rubber or plastic footwear This group was valued at € 311 million in 2006, accounting for 17% of all footwear imports to the Netherlands (32% by volume or 61 million pairs). This compared with a share of 16% in 2002 or € 260 million (28% by volume or 35 million pairs). This group has increased its importance. Intra-EU trade accounted for 31% of imports by value (11% by volume or 6. 8 million pairs). This compared with 32% by value in 2002 (15% by volume or 5. 6 million pairs). Belgium increased its supplies, but supplies from Germany and Italy decreased. Supplies from the UK increased, while supplies from Spain were unchanged.

Developing country suppliers represented 66% of all imports by value in 2006 (86% by volume or 52 million pairs), up from 58% in 2002 (76% by volume or 29 million pairs). China was the largest supplier (€ 158 million or 45 million pairs), followed by Vietnam (€ 25 million or 3. 9 million pairs). Imports from China were up significantly, whereas Vietnamese supplies have fallen. Imports from Indonesia and Thailand increased. ? In terms of individual products, rubber or plastic outdoor footwear was the largest sub-sector, accounting for € 273 million or 88% of this group in 2006 (93% by volume or 57 million pairs).

This compares with € 237 million or 91% in 2002 (94% by volume or 36 million pairs). Rubber or plastic sports footwear increased its volume significance over the period, increasing from 7. 3% or € 19 million in 2002 (4. 2% by volume or 1. 6 million pairs) to 12% or € 36 million in 2006 (5. 2% by volume or 3. 2 million pairs). Textile footwear This group was valued at € 286 million in 2006, accounting for 16% of all footwear imports to the Netherlands (30% by volume or 56 million pairs). This compared with a share of 17% or € 269 million in 2002 (27% by volume or 36 million pairs).

This group has decreased in importance in terms of value but increased in terms of volume. Intra-EU trade accounted for 36% of imports by value (11% by volume or 5. 9 million pairs). This position compared with 47% by value in 2002 (16% by volume or 5. 6 million pairs). Belgium decreased its supplies, but German supplies increased. Supplies from the UK increased, but volume supplies from Italy decreased. Developing country suppliers represented 61% of all imports by value in 2006 (88% by volume or 48 million pairs), up from 45% in 2002 (77% by volume or 28 million pairs).

China was the largest developing country supplier (€ 139 million or 45 million pairs), followed by Vietnam (€ 26 million or 3. 6 million pairs). While China?? s supplies have gone up over the period, Vietnam?? s supplies were broadly unchanged. Supplies from Indonesia and Pakistan were up, while supplies from Thailand were down. In terms of individual products, textile sports footwear was the largest sub-sector, accounting for € 149 million or 52% of this group in 2006 (17% by volume or 9. 4 million pairs), compared with € 196 million or 73% in 2002 (30% by volume or 11 million pairs).

Hence its share has decreased significantly. Textile outdoor footwear with rubber or plastic outer soles increased its significance over the period, increasing from € 43 million or 16% in 2002 (28% by volume or 10 million pairs) to € 100 million or 35% in 2006 (50% by volume or 28 million pairs). Other footwear This was the smallest product group, valued at just € 54 million in 2006 (3% by value and 2. 3% by volume or 44 million pairs). This has been in decline since 2002. Intra-EU supplies accounted for 39% of the value of this group (36% of volume), and that share has declined over the period.

China and Brazil dominated the developing country value supplies while China dominated the developing country volume supply. Exports In 2006, the Netherlands exported footwear valued at € 1,386 million, or 164 million pairs. This represented an average annual increase in value of 4. 7% from € 1,152 million, and an average annual increase of 22% in volume since 2002 from 74 million pairs. In 2006, the Netherlands was the fourth largest exporter by value after Italy, Belgium and Germany. Its value was also close to France, Romania and Portugal. It was third largest in volume, after Italy and Belgium and similar to Belgium in volume.

Re-exports from the Netherlands accounted for a significant proportion of exports. 94% of Dutch exports were intra-EU (97% by volume). Major destinations were Germany, France, UK and Belgium. Outside the EU, exports were destined for USA and Switzerland. In terms of product groups, leather footwear accounted for € 942 million or 44 million pairs, up 6. 6% from € 729 million and up 8. 5% by volume from 32 million pairs in 2002. Outdoor leather footwear with other outer soles dominated this group of exports. The main destinations were Germany, France, the UK and Italy.

The next largest group of exports were rubber or plastic footwear, which accounted for € 210 million or 28 million pairs, down 1. 8% from € 226 million but up 8. 5% by volume from 20 million pairs in 2002. Outdoor rubber or plastic footwear dominated this group. Germany, France and Belgium were the main destinations. ? Textile footwear was valued at € 198 million or 90 million pairs. This was up 4. 8% from € 164 million but up 44% by volume from 21 million pairs in 2002. Textile sports footwear was the largest sub-group but its share has fallen while the group as a whole has increased.

Germany and France were the principle destination countries. Other footwear was valued at € 36 million or 2. 3 million pairs. This was up 1. 4% from € 34 million and up 17. 7% by volume from 1. 2 million pairs in 2002. Germany and France were the main destinations. Opportunities and threats + The Netherlands should be viewed as a potentially interesting market for exporters from developing countries. It has a mature domestic retail market, combined with the fact that local production plays a very small part of this.

The mature market implies that consumers already have an enhanced demand for footwear, and local producers are no longer supplying that demand. Hence the Dutch market is reliant on imports. A market such as the Netherlands, in which re-exports play such a major part, needs to be considered in a different way to other export markets, where only the consumption of that country is important. For the Netherlands, an exporter needs to understand the dynamics and the linkages with the other countries to which the exports are ultimately destined. In this case Germany is the principle onward destination. Although leather is the largest sub-sector, the fastest growth rates have been seen in rubber and plastic and textile footwear. – The fact that the value share of imports from developing countries is up over the period while the volume share is up by even more indicates strong downward pressure on prices. Exporters should take care not to trade at a loss or with unsustainably low margins over a prolonged period. This may be justifiable for a limited period to gain market entry, but it is neither advisable nor feasible to trade in this way in the long run. It is also important to note that an opportunity for one developing country an also be a threat to another. Many EU countries switch country sources purely for competitive advantage, rather than moving supplier because of changes in demand for other reasons. Exporters should read carefully the trends and developments outlines on other parts of this survey before establishing whether the Netherlands offers a genuine export opportunity. See also chapter 7 of the EU survey for a more general analysis. Useful sources . EU Expanding Exports Helpdesk .. http://exporthelp. europa. eu/ .. go to: trade statistics . Eurostat ? C official statistical office of the EU .. ttp://epp. eurostat. ec. europa. eu; .. go to ? ®themes?? on the left side of the home page .. go to ? ®external trade?? .. go to ? ®data ? C full view?? .. go to ? ®external trade – detailed data?? . Understanding eurostat: Quick guide to easy comext .. http://epp. eurostat. ec. europa. eu/newxtweb/assets/User_guide_Easy_Comext_20080117. pdf 4 Price developments Footwear prices in the Netherlands have increased by less than consumer prices as a whole. Prices have not changed much in the last couple of years. In 2006, the consumer price index stood at 1. 1% (compared with the EU figure of 2. 2%).

At the same time, clothing and footwear prices in the Netherlands increased by 1%. In the same year, footwear prices fell by 0. 2%, although men?? s footwear increased by 1. 7% and women?? s footwear prices decreased by 1. 6%. In 2007, the consumer price index stood at 1. 6%, while clothing and footwear prices increased by 1. 2%. At the same time, footwear prices increased by 0. 6%, although men?? s ? footwear prices increased by 1. 4% and women?? s footwear prices fell by 0. 5%. Using a base figure of 1995 as 100, footwear prices were then indexed at 120. 4 in 2002, but had fallen to 111 in 2006. . 4% of all household expenditure in the Netherlands was spent of clothing and footwear, compared to an EU27 average of 5. 8%. Footwear prices in the Netherlands were above the EU average, but they have been falling relative to other countries. The prices here are similar to those in Italy, Belgium and Denmark. Children?? s footwear prices were close to the EU average, and women?? s footwear prices were well above the EU average. On the broader measure of clothing and footwear, in 2006 prices in the Netherlands were indexed at 87. 2 compared to the EU average of 100. Table 4. highlights how footwear prices vary very significantly between retailers, depending on the style of shoe and the target audience that the respective shoes are intended for. Prices quoted are not promotional prices. Table 4. 1 Prices of various types of footwear, €, different retailers, 2007 Dolcis Scapino Manfield Men?? s leather shoe 69. 95 44. 95 99. 95 Men?? s leather boot 89. 95 54. 95 119. 95 Ladies?? heeled fashion shoe 59. 95 19. 95 69. 95 Ladies?? fashion boot 79. 95 74. 95 139. 95 Source: Retailer websites Import prices to the Netherlands have been falling during the period, as Table 4. 2 indicates.

Prices from developing countries have been falling at a marginally faster rate than import prices from elsewhere. Import prices to the Netherlands are marginally above the EU average of € 8. 92, and developing country prices are also slightly above the EU average. Import prices from developing countries are just one quarter of the level of intra-EU import prices. Nevertheless, these price movements reinforce the trend seen elsewhere of increasing purchases of lower-priced footwear from Asian manufacturers. Large re-exports from the Netherlands indicate that the influence of these prices on consumer prices will be limited.

Please note that these trends should be interpreted with care, as changes in imports do not reflect the demand in the Netherlands. There are quite different import prices for the different product groups. For example, the import price for leather footwear was significantly higher than import prices for other types of footwear. This was € 28. 27 per pair in 2002, and this had fallen to € 20. 47 in 2004, then reached € 26. 37 in 2006. This was almost three times the import price of all footwear. Table 4. 2 Development in Dutch average import values/prices, 2002 ? C 2006, € 2002 2004 2006 ave.

Annual ave price ave price ave price % change per pair per pair per pair Total imports 11. 72 7. 95 9. 40 -5. 4 Intra-EU 21. 73 17. 91 22. 44 0. 8 Developing countries 7. 62 5. 69 5. 86 -6. 4 Source: Eurostat (2007) Consumer price indices can also be found on the Dutch National Statistical website (http://www. cbs. nl). The Dutch National Bank also provides information on prices (http://www. dnb. nl). See chapter 2 for a list of main retailers, many of which feature prices on ? their websites. Dolcis feature prices on their website for a wide range of footwear products (http://www. dolcis. l). Scapino, part of the Macintosh Group, also publishes prices on their website (http://www. scapino. nl). Manfield supply a more expensive range of footwear (http://www. manfield. nl). 5 Market access requirements As a manufacturer in a developing country preparing to access the Netherlands, you should be aware of the market access requirements of your trading partners and the Dutch government. Requirements are demanded through legislation and through labels, codes and management systems. These requirements are based on environmental, consumer health and safety and social concerns.

You need to comply with EU legislation and have to be aware of the additional non-legislative requirements that your trading partners in the EU might request. For information on legislative and non-legislative requirements, go to ? ®Search CBI database?? at http://www. cbi. eu/marketinfo, select footwear and the Netherlands in the category search, click on the search button and click on market access requirements. Additional information on packaging can be found at the website of ITC on export packaging: http://www. intracen. org/ep/packit. htm Information on tariffs and quota can be found at http://exporthelp. europa. u/. 6 Doing business Information General information on doing business like approaching potential business partners, building up a relationship, drawing up an offer, handling the contract (methods of payment, and terms of delivery) can be found in CBI?? s export manuals ? ®Export Planner?? and ? ®Your image builder??. Furthermore cultural awareness is a critical skill in securing success as an exporter. Information on cultural differences in the EU can be found in chapter 3 of CBI?? s export manual ? ®Exporting to the EU??. These manuals can be downloaded from http://www. cbi. eu/marketinfo – go to search publications.

Developing a relationship The most important ways to develop a business relationship are to either exhibit at one of the main footwear trade fairs, or to make a direct approach to wholesalers or major retailers. In the Netherlands, many business people still prefer a formal style of communication, both in the way a presentation is put together, although the Dutch are friendly and will be receptive to a professional approach. A very aggressive price driven approach will not be effective, although price is very important in the Dutch market. Trade fairs There is a permanent exhibition of footwear in the Netherlands at the

National Shoecenter (http://www. schoenencentrum. nl). In addition, the Modefabriek exhibition, which takes place twice a year each January and July, also includes some footwear (http://www. modefabriek. nl). Promotion Advertising in trade magazines can sometimes be an effective means of reaching a small target group. The main trade publication for the footwear industry is called Schoenvisie (http://www. schoenvisie. nl). Another important publication is Tred, published by Blauwmedia (http://www. blauwmedia. com). Schoenwereld is another publication, published by the Dutch Shoemakers Association in Zijdewind.

Useful sources There is information on the footwear industry in the Netherlands at the website of the Dutch Footwear Manufacturers Federation (http://www. shoeplaza. nl). Some manufacturers featured ? may be looking to develop relationships with developing country exporters. Other useful contacts are: . The Association of Footwear Retailers (Vereniging van Grootwinkelbedrijven in Schoenen) at http://www. rndweb. nl). . The Dutch Shoemakers Association (http://www. schoenmaker. nl and http://www. schoenmaker. com) is also accessed via the Dutch Craft Board at http://www. hba. nl. There is a website dedicated to shoes (http://www. shoes. nl). The Dutch Fashion portal http://www. fashion. nl, also includes information on footwear trends. . The Dutch Chamber of Commerce dedicates a branch specifically to footwear (http://www. kvk. nl/branches/? bik=1930=Produktie%20schoenenzaken). . The Federation of Footwear Wholesalers, Importers, Exporters and Agents, Vimagro at http://www. vnt. org. . The Dutch Retail Association covers footwear (http://www. mitex. nl and http://www. hbd. nl). This survey was compiled for CBI by Searce Disclaimer CBI market information tools: http://www. cbi. eu/disclaimer

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