The local market is flooded with imported footwear, which is expected to make up 78.6% of domestic demand
Melbourne, Australia (PRWEB) April 27, 2015
The Australian Footwear Manufacturing industry has faced a tough operating environment over the past decade. The dominance of low-cost foreign competitors, tariff reductions and import penetration have significantly changed the industry's structure. According to IBISWorld industry analyst Lauren Magner, “The industry has also been dealing with skilled-labour shortages, accelerated industry reforms and companies outsourcing production overseas.” Finding a significant low-cost footwear producer based in Australia is now a difficult task. However, several larger footwear manufacturers still produce industrial and safety boots, while sheepskin footwear such as ugg boots has retained stable domestic output levels over the past five years. In 2014-15, industry revenue is estimated to decline by 3.6% to $486.5 million, as the number of firms operating in the industry also declines. IBISWorld estimates revenue will decline by an annualised 0.5% over the five years through 2014-15, largely due to the closure of several domestic manufacturing facilities and lower prices on industry products.
Companies surviving in the industry have been able to adapt to changing conditions, such as lower tariffs and increasing international competition. “The local market is already flooded with imported footwear, which is expected to make up 78.6% of domestic demand in 2014-15,” says Magner. In response to extensive problems across Australia's textile, clothing and footwear (TCF) sectors, the Federal Government implemented a $406.0 million TCF Innovation Package to run from 2010-11 through 2014-15. Industry players that meet government requirements are eligible to receive this assistance. Operators that have taken advantage of technology and government subsidies to produce higher value-added or niche products, or have significantly improved process efficiencies, are expected to make some revenue gains over the next five years. However, lower output and prices are projected to result in overall revenue decreasing over the five years through 2019-20.
The Footwear Manufacturing industry is characterised by a low level of market share concentration, with RM Williams Proprietary Limited the only major player. The high labour requirement of most of the industry's production lends itself to small operations. As a result, the industry is a mix of a few large firms and many small establishments. Market share concentration has fallen over the past five years as mid-size firms have left the industry or moved production offshore. Domestic manufacturers have struggled to compete with imported goods produced in countries such as China that have significantly lower operating costs. The high degree of import penetration in the industry makes it very difficult for a manufacturer to capture significant market share.
For more information, visit IBISWorld’s Footwear Manufacturing industry in Australia report page.
The Footwear Manufacturing industry consists of operators that manufacture footwear or footwear components. These products are then purchased by footwear wholesalers and retailers that resell them to consumers.
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Products & Services
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