Argentina focuses on high-end products for the European market

With its 130 million pairs of shoes produced annually, Argentina ranks third among producing countries in the Americas after Brazil, with 849 million pairs, and Mexico, 205 million pairs, according to data released by the Argentine footwear association Cámara de la Industria del Calzado (CIC), as well as its Portuguese and Brazilian peers Apiccaps and Abicalçados. The Americas are the second largest region in terms of footwear production with 5.6 percent of the total.

However, nearly all Argentine shoes are destined to the domestic market, and exports mainly target the Western hemisphere.

“All but a few of the 130 million pairs produced in Argentina, around one million, are sold to foreign countries that are geographically close, such as Uruguay, Chile, Peru or Bolivia. It costs us a lot in terms of effort to go to globally to compete with countries like Brazil or the Far East,” explained Daniel Risafi, the president of CIC, which groups about 350 small and medium-sized companies.

The country’s production however does not match domestic consumption, which reaches 172 million pairs annually, and the shortfall is covered by imports.

CIC was present at Expo Riva Schuh & Gardabags, an Italian trade show specializing in footwear, bags and accessories whose 101st edition was held from June 15 to 18 in Riva del Garda. The fair “is very attractive for Argentine companies because here you can find products from many countries and international buyers who come to do business to sell and buy footwear. There are large, small and artisan companies and buyers who have a single shop or a large chain. Something that you don’t see in all the fairs in the world,” he told Shoe Intelligence.

Argentine manufacturers focus on niche segments for exports

When competing on international markets, Argentine manufacturers face a number of challenges prompting them to focus on market niches.

“To produce mid-range footwear, the cost of labor and raw materials is very high. That’s why what we are presenting here (at Expo Riva Schuh & Gardabags) is a high-quality product that is the result of special handicraft work that our companies can also produce for other brands and is essentially aimed at foreign customers,” commented Risafi.

The association was presenting an artisanal product made from quality Argentine leather that can sell at a retail price of $180 a pair.

“We are coming from years of heavy inflation and a depreciating national currency. We must first achieve macroeconomic stability at a country level and build an export base from there,” Risafi added.

In the meantime, the government of Javier Milei, which took office in December 2023, has removed tariffs on footwear, and the domestic market has had to “adjust itself” especially at a moment when consumer spending is weak, he noted.

Confident in the Milei government

“In the past, we have always been favorable towards new governments and I don’t think that the new administration will hinder exports. We are aware that the current government is doing everything it can to make the economy work but we are suffering from bad past economic policies. We are confident that the situation can change but these aren’t things that can be fixed quickly, they go at a slow pace. We want to produce and we want to export,” Risafi stated. Hence the idea of coming to trade fairs such as Expo Riva Schuh & Gardabags with some companies to offer, for the time being, high-end products.

“I’m convinced that it’s convenient to come here to target the European market to export a few pairs of shoes. I prefer to go step by step and grow pair by pair. It doesn’t pay off to produce thousands of pairs for export if I can’t do it viably because of the economic situation we have in Argentina. Taxes on production are high and we have an increase in energy costs: even if payments are made in dollars, the exchange rate is subject to the fluctuation of the Argentine peso. If the dollar increases, so does the cost of raw materials”.

 Photo: © Angelica Reyes on Unsplash