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Exporting specialty footwear to Europe

Takes 26 minutes to read

The current health and fitness trend among European consumers, combined with growing environmental awareness, is pushing up demand for specialty footwear. Because of the specific functionalities and qualities of this footwear, the techniques you use for making it are key selling points. This specialisation makes the segment less competitive than the mainstream footwear market, with less pressure on margins. It is an interesting segment for you to focus on as a supplier from a developing country.

1. Product description

The specialty footwear market can be divided into several different categories. The two most prominent ones today are specialised footwear and eco-friendly footwear.

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Specialised footwear

Specialised footwear is one-of-a-kind footwear worn only on special occasions, or by small, specific target groups. Demand in this segment is limited and usually steady. This footwear is characterised by special requirements, often related to a specific user group (for example, a region or a profession).

Examples: traditional footwear, such as clogs and genuine cowboy boots (not to be confused with the mass-produced cowboy boots that were widely popular for a long time in Europe); health footwear (for example, orthopaedic footwear or shoes for diabetics); customised footwear; or work footwear.

Eco-friendly footwear

Eco-friendly footwear is characterised mainly by the use of environment-friendly materials, production methods, dying techniques and packaging. The aim of the producers is to minimise the environmental impact of production. Demand in this segment is limited, but growing.

In some cases, the use of chemicals is reduced to zero and dyes used are natural and free of chemicals. Examples: tea dye, vegetable dye. Another typical feature of eco-friendly footwear production is waste reduction through the use of biodegradable materials. Users are idealists keen on contributing to environmental preservation.

HS Codes

The footwear in this market segment generally falls under HS Code 64 and its respective numbers. The coding is based on the type of material of which the upper is made. For more information on HS Codes, check this section of Foreign Trade Online.

Key technical specifications

The specialty footwear niche is challenging to access. One main reason is that this segment is characterised by highly demanding product specifications. Another reason is that it has stricter-than-average regulations, aimed at ensuring and verifying minimal environmental impact.

This means that succeeding in this segment requires the very best (eco) performance from producers. It also means you have to develop a customised supply chain, because usually the sole, the last, the specific quality or the technology for making eco footwear has been specially developed. To meet eco standards, you have to develop almost every element of your product according to eco specifications.

Specialised footwear

Specialised footwear, in most cases, is produced manually. Also, production tends to take place in the direct vicinity of the sales market or in a neighbouring country, as local or traditional footwear models are important in this niche. Sometimes local footwear is also sold to tourists.

If the volume of a given product grows, production can be shifted to a seasoned footwear production country, for instance in Asia. Work shoes are a good example of this: while they represent a niche market in terms of volume, they are produced both in Europe and in Asia at highly professionalised production plants. The Netherlands’ wooden clogs traditionally worn by farmers and sold in interesting volumes to tourists, are also largely produced in China.

Eco-friendly footwear

A legal certification framework for eco-friendly footwear does not yet exist. Neither are there any fixed market standards in place for determining whether or not a footwear product can be marketed as eco-friendly. This often causes confusion, as some players will use even the slightest step towards reducing environmental impact to adopt the term eco-friendly.

In footwear, the emphasis until now is on the eco-friendliness of products – that is, materials – rather than on production facilities. Leather tanneries are subject to legislation on the use of chemicals, of course, but these standards do not relate directly to eco-friendly labelling.

Tips

  • By developing your own method or quality – or sourcing a good existing technique – you can create a unique product, benefiting from exclusivity and market protection.
  • Watch how even leading brands are tapping into the eco niche. For example, Nike’s Trash Talk, presented in 2008 as the world’s first performance basketball shoe manufactured from waste, was a prime example. In 2016, it was announced that most Nike shoes are being made from Nike’s waste. Also in 2016, sports brand Adidas and environmental initiative Parley for the Oceans released a pair of running shoes made from recycled ocean waste (see also the section below on sustainability).

Materials, production methods, dying techniques

In the eco-friendly niche, several current developments with regard to materials and production or dying techniques are important:

  • Eco-friendly materials are growing, for example bio-cotton, hemp, seaweed, wool and also recycled and upcycled materials, such as wool, polyester, polyethylene terephthalate (PET), bamboo and hemp.
  • Biodegradable materials also represent an interesting trend in the niche footwear market, with many players actively seeking new, biodegradable materials that offer the same properties as conventional footwear materials.

Tips

  • The market for eco-friendly footwear is constantly developing. This means that if you want to target it, you have to be alert to very specific, current trends.
  • Eco-friendly footwear places the highest possible demands on your environmental performance as a producer. Knowledge of the latest eco-friendly materials and production methods – as well as a willingness and ability to keep learning in this area – are a must.
  • Invest in an eco-friendly supply chain to create new and continuous business.
  • Look for materials that are more environmentally friendly than the ones you are already using, like the ones mentioned above. For example, use adhesives containing natural solvents.
  • For information on an up-and-coming alternative with many different possibilities, see our study on man-made fibres.
  • For further information on sustainable materials and packaging, see the report by the American Apparel & Footwear Association on sustainable footwear.
  • For more inspiration, see this Ethiopian example of a successful sustainable footwear business.

Labelling

All footwear sold in Europe must be fitted with labels offering information on the main materials used for the three main parts of the shoe: the upper, the lining and insock, and the outer sole. Each label must state – in words or pictograms prescribed by the EU Directive on footwear labelling – whether the material is ‘leather’, ‘coated leather, “’textile’ or ‘other’.

Made-in labelling

The European Commission is working on mandatory origin labelling (the ‘made-in label’) in Europe for all non-food products, including footwear. Until now, made-in labelling is optional, but some buyers already require made-in labelling from their suppliers. Others will be seeking to experiment with it in the coming years in anticipation of upcoming legislation.

Tips

Colours and design

In the eco-friendly niche, colours tend to be dominated by natural tones, such as those of undyed cotton or jute. One reason is that bright, flashy colours are not commonly associated with eco-friendliness. Another is that the use of dyes and colorants normally has a negative impact on the environment.

You can avoid environmentally harmful dyes in different ways, for example by avoiding dying altogether or using natural colorants, such as tea dye. Another alternative is to do your dying with CO2 rather than with water, a new technology patented by the Dutch company Dyecoo.

Packaging

Products imported into Europe are subject to European packaging requirements. These requirements aim to promote the reuse of packaging and to reduce waste, as shoeboxes account for millions of tons of waste. Retailers are responsible for the way their products are packed for sale in shops, but they often ask suppliers to do this for them.

There are many innovative packaging concepts on the footwear market. Many of these address environmental impact, while some also are designed for aesthetic purposes or convenience. Puma’s ‘Clever Little Bag’ reduced Puma’s cardboard waste by 65%. Brooks Running Shoes’ bamboo shoe canister offered customers a natural, beautifully designed canister that can be reused for many purposes. Here are more examples of innovative shoe packaging.

Tips

  • Strengthen your competitive position by asking your buyer how you can meet packaging requirements. Find out as many details as you can regarding his needs and wishes.
  • Ask where to place bar codes and data in order to align with the buyer’s processing and storage systems.
  • Look for ways to reduce and reuse packaging waste. If you can improve your performance in this area, use it as a selling point in communicating with buyers.
  • Take into account that you can be held responsible for damage caused by defects to your products or packaging. This is called product liability. For more information, read our study on European liability legislation.
  • Consider alternative inks for printed packaging, such as soy ink.
  • For more information on how eco-friendly packaging is developing, read this article on the evolution of eco-friendly packaging.
  • For information on legislative packaging requirements in Europe, see the section on requirements in this study and our general study on requirements on the European footwear market.

2. What makes Europe an interesting market for specialty footwear?

Eco-footwear is doing well in northern Europe, southern Europe is more innovative

The eco-friendly footwear niche is concentrated in the north of Europe. Germany offers the largest and most stable market for all footwear in Europe, mainly because of its large population (over 80 million). While German consumers are fairly traditional, environmental awareness in this country is influencing demand for eco-friendly footwear.

Other European countries, such as France, Spain or Italy offer exciting opportunities if you are willing to explore and take more risk. Italy is famous for innovation. Working with Italian customers is a good way to access new techniques and trends.

Between 2009 and 2013, Germany was Europe’s leading footwear importer with an import share of 19% in terms of value. Textile uppers showed particular growth, both from outside Europe (+57%) and from other European countries (+26%). Germany was followed by France (14%), the United Kingdom (13%) and Italy (12%). The Netherlands ranked 6th (8%), followed by Belgium (7%) and Spain (6%).

Germans consumers accounted for per capita footwear sales of € 131 per capita, but per capita consumption in other leading European countries was higher: Italy (€162), the United Kingdom (€157), France (€156) and Spain (€144).

Generally speaking, countries with high imports, such as Germany, are easy to access, as there are a lot of buyers there looking for suppliers. The important thing on entering these markets is to find buyers whose needs in terms of volume match your capacities. Giant retailers like Deichmann may look attractive, but their volume requirements may well be too large for you.

Tips

  • Whichever country you target, make sure you find buyers who match your business.
  • If your volumes are limited, aim for buyers who operate in a single country rather than buyers who need products for a number of countries at the same time.

Strong growth in Central and Eastern Europe

General footwear imports are showing strong growth – 10% and more – in Slovakia, the Baltic states, Poland, Romania and Sweden. These markets are growing and consumers in Central and Eastern Europe are eager to tap into health, fashion and – to a lesser degree – eco trends.

In Greece, Croatia, Ireland, Luxembourg, Cyprus and Malta footwear imports are decreasing. The main reason for this is economic pressure.

Specialty footwear still tends to be a niche emerging in growing economies. The need for transparency and sustainable production within the supply chain is growing. This creates new business opportunities, but it often involves more costs as well, due to special requirements. Per capita sales figures can be a good guideline for selecting your market.

China is a big supplier, but other low-cost countries are growing

Much of the footwear sold in Europe is imported from developing countries in Southeast Asia, in particular China. However, in the period 2011–2013, European imports from China showed a sharp decline. China struggled with rising wages and material costs, while other developing countries succeeded in offering more favourable prices. This development is still continuing.

Many European buyers are currently sourcing alternatives in countries like Bangladesh, Myanmar and Ethiopia. Free trade agreements with these countries are pushing this trend (see also the section below on trade agreements).

A large share of imports in European countries came from other European countries (intra-European trade). Most of these imports are, in fact, re-exports (including transito). In fact, according to the European Confederation of the Footwear Industry, intra-European trade represents one third of the world footwear trade.

Exports from Europe – including re-exports – are rising

Europe exports a lot of shoes. Ten out of the world’s top fifteen exporting countries are European: Italy, Belgium, Germany, Spain, the Netherlands, France, Portugal, the United Kingdom, Romania and Slovakia. The main European production countries – Italy, Portugal and Spain – account for 23% of global leather footwear exports.

Footwear exports from Europe, particularly leather uppers, have continued to rise in recent years. From 2009 until 2014, exports to third countries increased by 46% in quantity and 78% in value, according to the European Confederation of the Footwear Industry.

These exports, again, include re-exports (see also above). Re-exports are the main reason why Europe’s export figures are higher than its import figures. Re-export percentages are highest in Germany, Belgium and the Netherlands.

The largest export markets for European footwear are Russia, the United States, and Switzerland. But other countries – especially China, the United Arab Emirates and Turkey – have seen the biggest growth in recent years, according to data published by the European Commission.

Tips

  • When you do market research, do not just look at the largest markets in Europe, but consider what type of market will benefit your business most: a market known for innovation, such as Italy, or a new growth market, such as those in Central and Eastern Europe.
  • Consider the possibility of re-exports, too. This means you sell your products to a European buyer who re-exports them to another (non-European) market. Germany, Belgium and the Netherlands are Europe’s leading re-exporters.
  • For more information on the market channels and segments in European footwear, see our study on market channels and segments in European footwear.
  • Investigate trends and innovations in Europe, for example special upper materials or outsole uppers that are patented. You can often import and use these in your production. This can be a way of creating another unique selling point for your product.

Signs of renewed growth for Europe’s footwear market

One of the most important European market trends is that the economy is slowly recovering from the recession that began in 2008. The recovery is positively affecting the footwear market. This is another reason why many footwear buyers are looking for new suppliers, especially in lower-cost countries.

One of the main growth drivers is the rising popularity of sports footwear – high-performance, mass-market and functional – as a substitute for more traditional footwear types. Sports as well as specialty footwear sales have benefited from the general trend towards more active and healthier lifestyles among Europeans (see also the next section on the health trend).

Other drivers include changes in fashion and technological innovations in comfortable footwear.

Tip

  • Be bold in contacting prospective buyers. With the economy picking up and alternatives for China in high demand, they will be willing to listen to any good offer.

The health trend is fuelling specialty footwear sales

An important trend affecting footwear is the health trend. Europeans are more health-conscious than ever nowadays. This means there are exciting opportunities for many kinds of footwear, including many specialty variations, such as sports, health and outdoor shoes.

More and more European consumers are realising that the shoes they wear can significantly affect their foot health and general wellbeing. This means choosing good shoes and being aware of good fit is essential. For example, the United Kingdom’s Healthy Footwear Guide offers manufacturers and consumers help in this area; the initiative is backed by a growing number of footwear companies.

Tips

  • Study examples of healthy footwear. For some examples, see this article’s ‘healthy shoe review’.
  • Find out what features European buyers and consumers look for in healthy footwear.
  • Clearly emphasise any health benefits your specialty footwear may offer, so that you can tap into the health trend.

Ageing is leading to more demand for specialty footwear for seniors

Surveys suggest that in the next 50 years increasing lifespans and low fertility levels will contribute to an ageing population in Europe. Seniors represent a significant footwear market opportunity, as many Europeans over the age of 65 have both purchasing power and leisure time.

On top of that, these consumers often also have special needs with regard to footwear. This creates good opportunities for you as a supplier, for instance in the use of healthy materials or special shaping and sizing.

Tips

  • Make an effort to understand the needs of seniors by monitoring the media and major retailers.
  • Consider creating specialty collections that cater specifically to seniors and their (health) needs.
  • Consider common ageing factors in the design of products for seniors, for instance, incorporating elements like simple closures and fasteners, easy–to-read labels, easy care, and comfortable fabrics.

E-commerce and social media are shaking up the market

European consumers increasingly buy their footwear online. Apart from shopping online, consumers also use the Internet and social media to follow trends and develop their own styles and preferences. In Europe, consumers buy more footwear (and clothing) than anything else online. Companies that combine e-commerce and online activities with offline commerce will be the most successful.

Online buying is not likely to be as advanced in specialty footwear as it is in the wider footwear sector. One reason is that consumers looking for specialty footwear want extra information and service in trying on new shoes. On the other hand, the Internet does offer good opportunities for advertising and promoting specialty footwear.

Tips

  • Find out what is happening on the footwear market with regard to e-commerce and social media. For example, look at this social media overview to find out what there is and how to use it.
  • Become an active user. Follow brands within and outside your segment, use social media for your own communication, marketing and/or branding.
  • Find out what your buyers are doing online and ask how you can support them, for example by supplying good photo and video material of products.

Technology and new materials are creating new opportunities

Technological developments are changing almost every industry, including footwear. Think of new manufacturing techniques involving robotics, or new and faster machines. Footwear manufacturers in China are major drivers of this trend. Rising wages and labour shortages are forcing them to push efficiency and technology to their limits to minimise labour and maximise output.

Technology is progressing in several areas: fabrics technology (sustainability, durability, weather resistance); technology aimed at cost-price reduction; and technology based on alternative materials.

For example, more and more synthetic materials are entering the footwear market. Many of these are just as attractive as – and almost impossible to distinguish from – leather.

New materials, especially, are interesting for the specialty footwear niche, as they offer added benefits, such as increased comfort, breathability, improved performance or environment-friendliness.

Tips

  • Look for ways to offer specialty footwear buyers special functionalities and benefits using (low-cost) synthetic or alternative materials.
  • Monitor trends and developments in the field of recycled, upcycled and environment-friendly materials and techniques.
  • Experiment with these new possibilities.
  • Get your factory certified for using these materials or processes.
  • Communicate with your buyers about your companies competencies and ambitions in this area.
  • For more ideas and information, see our study on man-made fibres.
  • For more information on these and other important trends affecting European and global footwear, see our study on trends in European footwear.

The footwear market is becoming more professional

Another important trend that will eventually affect the whole footwear branch is that the industry is becoming more professional. Having lagged behind the fashion industry for many years in terms of speed, efficiency, transparency and overall performance, footwear players around the world are beginning to step forward and take control of their business and supply chains.

Tips

  • Decide how you can make a more professional impression on buyers, for example, by offering maximum transparency and traceability; above-average design and collection development skills; shorter delivery times; or a quicker response to fashion trends.

Sustainability, transparency and waste management are strong selling points

With numerous European governments tending towards a circular economy, more and more companies are exploring commercially viable ways to use all waste caused within the supply chain and to develop eco-friendlier products. In the future, it seems, everybody manufacturing fashion and footwear will be held responsible for the waste they create.

There are many examples. Fashion brand H&M is investing heavily in recycling. TOMS Shoes matches every pair of shoes purchased with a new pair of shoes for a child in need. Many African shoe brands are combining sustainability and local job creation with slow fashion and high profits. In 2016, the Plastic Soup Foundation and G-Star RAW launched the Ocean Clean Wash campaign to stop microfibres from synthetic clothing from ending up in rivers and oceans through washing.

The biggest challenge for new supplier countries is to create a low-waste, transparent – and, if possible, certified – supply chain. Suppliers who succeed in this have a very strong selling point. This does not just mean you must have a transparent, safe factory that is free of child labour, but also that your waste management system is effective and your environmental impact is as low as possible.

There are many ways of exploring new sustainability and transparency opportunities. One example is the online course on sustainable footwear manufacturing launched by the European Confederation of the Footwear Industry in 2016.

Tips

  • Invest in transparency and sustainability. Aim for co-developing realistic policies together with your buyer(s) to avoid missteps and to strengthen your business relationship.
  • Embrace gradual change, targeting small, one-step-at-a-time improvements, rather than thinking you can change the world overnight.
  • Set clear priorities: you cannot tackle child labour, human rights violation, unfair labour practices, health and safety risks, environmental harm, corruption and supply chain traceability all at once.
  • Do everything you can to make your transparency and sustainability performance as good as you can. A good performance means less risk for your buyers. This is perhaps a stronger argument than the argument of actual environmental or social impact.
  • Decide whether you want to be among the early adopters or whether it suits you better to follow the trend and wait until best practices are widely established.
  • Read up on the ideas behind the circular economy in this presentation of the circular economy by the Ellen MacArthur Foundation, or this article on the circular economy in the Guardian.
  • For more information, see our study on buyer requirements on the European footwear market.

4. What requirements must specialty footwear comply with on the European market?

Legal requirements: product safety, health and labelling

Buyer requirements can be divided into three categories: 1) musts, requirements you must meet in order to enter the market, such as legal requirements; 2) common requirements, or those you have to comply with in order to keep up with your competitors; and 3) niche market requirements for specific segments.

There are many requirements your footwear products have to comply with by law in order to be sold in Europe. The main areas they cover are product safety (all products); use of chemicals (in textiles, leather and accessories); labelling (there are specific rules for textiles); and use of materials derived from wild plants and animals.

Product safety

Europe’s General Product Safety Directive basically states that all products marketed in Europe must be safe to use. The directive forms a framework for all legislation aimed at specific products and issues. Even if there are no specific legal requirements for your footwear product and its uses, the General Product Safety Directive always applies.

Tip

  • Use your common sense to ensure your product does not tear, catch fire or cause any other danger in its normal use. These requirements may not be outlined in specific legislation, only in the General Product Safety Directive. For more information, see the section on the General Product Safety Directive in the EU Export Helpdesk.

Chemicals and restricted substances

The European Union has restricted a great number of chemicals in products marketed in Europe. These are listed in the so called Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation (Regulation (EC) 1907/2006). The rules laid down in this regulation are mandatory. If you do not follow them, you cannot compete in Europe.

Tips

Common requirements: care labelling, sizing standards and sustainability

In addition to the legal requirements you will face as a developing-country supplier exporting specialty footwear to Europe, you will also face requirements that are not mandatory, yet unavoidable.

Care labelling

Care labels attached to garments offering care and cleaning instructions are important to European consumers. In most European countries, the care labelling system of the International Association for Textile Care Labelling, GINETEX, is used. This system uses easily recognisable symbols to recommend garment care. According to the GINETEX standards, your footwear labels should include instructions on general care and warnings; washing; drying; ironing; and/or professional textile care (dry-cleaning).

Sustainability performance

Sustainability requirements, though still widely differing, are becoming very common on the European apparel market. Many buyers have non-negotiable standards in this area. A strong sustainability performance is perhaps not yet vital to doing business in Europe, but it certainly offers you a competitive advantage (see also the section on trends earlier in this study).

Niche requirements: certified sustainable products

While sustainability is gaining ground, the actual use of certification is still a niche in this sector. If you can offer it, you have a good chance of reaching higher segments with bigger margins. Think, for example, of fair trade cotton, or eco-labelled products.

Tip

  • Collaborate with your suppliers and sub-contractors on developing transparency and sustainability in the entire supply chain.
  • Develop an open costing structure so that buyers will better understand price differences and profits made. More and more buyers will expect this from you.
  • If your environmental performance is already at a high level, consider building on this quality to specialise in eco-friendly footwear.
  • For detailed information on niche sustainability requirements and standards as well as tips on how to enter this niche, see our study on buyer requirements on the European footwear market.

5. What competition do you face on the European specialty footwear market?

Market growth means you can compete with European producers

As specialty footwear is a niche market, a lot of it is produced in Europe. This makes production more expensive, but it ensures delivery speed and high quality. However, as the market for specialty footwear grows, both consumers and manufacturers are looking for sources offering the same quality levels at lower prices.

Competing with European producers on quality and specific functionalities is not easy. The ‘Made in Germany’ quality label and Portugal Footwear are good examples of how Europeans associate European production with high quality. This article on how Portuguese shoemakers have raised the quality bar to compete with China also illustrates the point.

A good way of entering this market is to collaborate with a European factory. The European partner can share knowledge and your company can reduce production costs.

Favourable trade agreements can help you compete with other supplier countries

Europe’s Generalised Scheme of Preferences (GSP) has caused some shifts in global supply chains since 2014. The scheme allows some countries to pay less or no duties on exports to Europe. This has improved the competitive position of countries benefiting from GSP arrangements, such as Cambodia, Bangladesh and Pakistan.

If you are based in a country listed in Europe’s current GSP, you have a strong competitive advantage over suppliers in non-GSP countries. Your prices, by default, are several percent lower.

Tips

  • If your country enjoys free trade under the GSP, make sure you communicate this with potential buyers, as it means you can offer very competitive prices.
  • The GSP is scheduled for review after 31 December 2016. Check the European Union’s GSP pages regularly (see the link above) using the link provided above. Changes may impact your competitive position.
  • Find out more about import duties using this online duty calculator.
  • For more information on the main competitive factors you will face in this and other footwear segments, see our study on competition in the European footwear market.

6. Through what channels can you get your specialty footwear products onto the European market?

In niche markets like specialty footwear, most of the products are sold in smaller stores in the middle and upper middle segments. These shops are usually independent or single-brand shops. Online shops are also gradually increasing their sales of specialty footwear.

Specialty footwear shops require a different kind of service than retailers and other large buyers. For example, they need stock service, they prefer to have the right to return unsold stock and they also prefer extended payment conditions.

Because of their small size, they can only buy directly from a factory if they buy collectively, in a buying organisation. Examples: Katag, Euretco.

As a supplier, the best way to do business with these smaller players is also to form a collective of suppliers. Another option is to work with an intermediate trader who knows the market and can represent your interests effectively. Margins will be lower, but marketing and distribution costs will be, too. You also have more visibility as a group than as an individual company.

Tips

7. What are the end prices for specialty footwear products?

Prices in specialty footwear vary considerably. Low-end products, such as clogs or other specialties for local users or tourists, will usually sell in Europe for around 10 to 50 euros. Higher-quality specialty footwear, such as certified steel-nosed work shoes or hand-crafted leather cowboy boots, can easily reach prices between 50 and 150 euros.

In mainstream footwear, the cost price can very roughly be broken down as follows:

Raw material  59.5%
Labour costs   24%
Packaging 8%
Shipping 3.5%
Import & processing 15%

However, specialty footwear usually involves higher labour costs and higher shipping costs. This is because these products are more difficult to manufacture and because shipping volumes are usually smaller and not Full Container Loads.

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