The national footwear industry believes that the Regional Comprehensive Economic Partnership (RCEP) will open up opportunities to increase export share. RCEP participating countries are listed as one of the largest footwear export markets. Executive Director of the Indonesian Shoe Association (Aprisindo) Firman Bakrie explained that shoe exports to RCEP countries reached 29 percent of total exports in 2020 which reached US$ 4.80 billion, or around US$1.39 billion. The export value places RCEP participating countries as the second largest footwear export destination after the European Union.
“The European Union without the United Kingdom is the destination for 30 percent of exports. It turns out that RCEP countries are quite large, reaching 29 percent in 2020 and followed by the United States at around 27 percent," said Firman, Monday (12/13/2021).
Firman said, RCEP countries became an important market, especially China which showed a large increase in imports in the period 2019 and 2020.
Data from the Central Statistics Agency (BPS) shows that footwear exports to China and Hong Kong rose from US$563.11 million in 2019 to US$765.26 million in 2020.
“So for the footwear industry, the ratification of the RCEP is quite urgent. The fastest growing market is China and in 2020 it will reach 24 percent, and from this export contribution we are quite optimistic about the role of RCEP to encourage exports," he continued.
Firman is also not too worried about competition with other producing countries, such as Vietnam and China. In terms of market segment, Indonesian footwear products have a branded sports shoe market segment, while China dominates the export of cheap footwear which also enters various countries.
Apart from the opportunity to increase RCEP's exports in the future, Firman said, the footwear industry faces challenges in maintaining competitiveness for the domestic market.
The free trade commitment contained in the RCEP will directly allow the entry of cheap products from abroad.
Efforts to maintain competitiveness, he continued, have also not been followed by the readiness of the domestic upstream industry in supplying raw materials.
Firman explained, most of the raw materials are still imported from abroad, because the domestic textile industry has not fully met the needs.
“In terms of value, we actually still have a surplus, but on the other hand, when cheap foreign products come in, we will face local products. Of course we hope that in the context of increasing exports, we must also maintain the domestic market, and one way to do that is to maintain competitiveness," he said.
