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  • EXPORTNEWS / Ditjen PEN/MJL/XXIII/10/2014 1

    INDONESIAexport

    Ditjen PEN/MJL/XXIII/10/2014

    What's InsideThe Indonesian footwear industry was once

    considered as a sunset industry due to lack of new investment. However, because footwear is a necessity

    for daily activities and any occassions, the demands will remain for the foreseen future. Recently, Indonesia has seen a new wave of investments especially in

    sports shoes sector where many well-known international brands are relocating their

    factories to Indonesia.

    Sports ShoesSports ShoesPromising industry with myriad Benefits

  • FROMEDITORSDESK

    Dear Valued Readers,

    The month of October has already come, which means only two months left to welcome the year of 2015. For the Directorate General of National Export Development, Ministry of Trade of the Republic of Indonesia, the remaining two months this year must be used optimally to increase Indonesian export performance. One of the main business sectors to bring Indonesia as a recognized exporter in the world is footwear industry.

    The Government of Indonesia puts the footwear industry as one of the primary industries, since it can absorb a large number of workers. On the other hand, as the third largest footwear exporter in the world, Indonesia also has the opportunities to improve its national export performance. Subsequently, this industry can also be empowered further to increase economic development in Indonesia.

    However, there are still some obstacles faced by the Indonesian government and also exporters in sustainably building footwear industry. Therefore, the role of the government is to assist exporters by providing actual information about the latest development in the international markets. In addition, the government also functions to build cooperation with related associations in formulating strategies needed to remedy the obstacles.

    Prior to the implementation of ASEAN Economic Community (AEC), more preparation are needed to step into the new era in the Southeast Asia region, which will be initiated next year. With sufficient preparation and good skills, there are opportunities for Indonesia to become the winner in the regional free market. It is possible to achieve such objective. Thus, in two months ahead, all stakeholders involved in regional and global trade activities, need to prepare better to face stiffer competition in ASEAN and other overseas markets.

    Thank You

    Advisor : Nus Nuzulia Ishak

    Editor in Chief : Ari Satria

    Managing Editor : RA. Marlena

    Editor : Sugiarti

    Writer : Roesfitawati

    Design : Dewi

    Editorial Addresses :DIRECTORATE GENERAL FOR NATIONAL EXPORT DEVELOPMENTMinistry of Trade Republic of IndonesiaJl. MI. Ridwan Rais No. 5Jakarta 10110 IndonesiaPhone : +62 21 3858171Fax : +62 21 23528652Email : p2ie@kemendag.go.idWebsite : http://djpen.kemendag.go.id

    Published by :DIRECTORATE GENERAL FORNATIONAL EXPORT DEVELOPMENTMinistry of Trade Republic of Indonesia

    Ditjen PEN/MJL/86/X/2014

    2 EXPORTNEWS / Ditjen PEN/MJL/XXIII/10/2014

  • In this issue

    hot issueThe ProsPecT of IndonesIan fooTwear IndusTry

    In asean economIc communITy

    From the Editors Desk 2

    Hot Issue 3

    Market Review : The Indonesian Footwear Industry

    6

    List of Exporters 10

    Commercial Attaches 11

    Indonesian Trade Promotion Center (ITPC) 12

    Footwear industry is a never-ending business, since it has become a part of peoples daily lives. Not only for outdoor events, there are some people who also use footwear for indoor activities. In other words, the necessity of footwear has altered from a secondary need to a primary one.

    The variety of activities that need footwear reflects a niche market for footwear business players. The implementation of the ASEAN Economic Community (AEC), which will be implemented in 2015, is predicted to bring about a bigger market for this business sector. In AEC scheme, each ASEAN country

    EXPORTNEWS / Ditjen PEN/MJL/XXIII/10/2014 3

    EXPORTNEWS / Ditjen PEN/MJL/XXIII/10/2014 1

    INDONESIAexport

    Ditjen PEN/MJL/XXIII/10/2014

    What's InsideThe Indonesian footwear industry was once

    considered as a sunset industry due to lack of new investment. However, because footwear is a necessity

    for daily activities and any occassions, the demands will remain for the foreseen future. Recently, Indonesia has seen a new wave of investments especially in

    sports shoes sector where many well-known international brands are relocating their

    factories to Indonesia.

    Sports ShoesSports ShoesPromising industry with myriad Benefits

  • Hot Issue

    is permitted to distribute and sell commodities to other ASEAN countries with less or even no borders and barriers. Hence, the market is bigger in one side and the competition is tighter in another side. Only the best producer will grab the largest portion of market share.

    As on of the world's largest footwear-producing countries, the government of Indonesia has formulated a number of strategies. Basically, Indonesia has bigger potentials than other countries because it has two types of footwear industries, sportss and casual shoes. Some countries in ASEAN region also have big sports shoes industry but they do not have the casual one. On the contrary, other countries have big casual factories but do not have sports shoes industry. Thus, a number or importing countries regard Indonesia as one of the most recommended footwear exporters.

    The only obstacle faced by Indonesian footwear industry under AEC scheme is the import duty of raw materials. To address this problem, the government encourages footwear producers to use raw materials already available in domestic markets.

    From this point, the government would convey that the obstacles would not hamper the development of national footwear industry. Since this sector can absorb huge number of workers, the government seriously commits itself to make this industry as one of the main industries in Indonesia. In turn, this sector is expected to enhance the performance of Indonesian non-oil-and-gas export.

    The 29th Trade Expo IndonesiaIn order to increase the export value of Indonesian footwear, one of the strategies conducted by the DGNED is by organizing exhibitions both in Indonesia and overseas. One of the exhibitions is the Trade Expo Indonesia (TEI), an annual international trade fair. A large number of Indonesian superior and potential products will be displayed during the exhibition, including footwear. The information about other commodities can be seen through its official website.

    This year, the 29th TEI is held on 8-12 October 2014. By undertaking cooperation with the Indonesian Trade Promotion Center (ITPC), Trade Attaches and other Indonesian representatives overseas, thousands of foreign buyers have confirmed their attendance at TEI. Through this event, it is expected the export value of Indonesian footwear can be increased and turn Indonesian footwear industry as the star in the AEC market.

    4 EXPORTNEWS / Ditjen PEN/MJL/XXIII/10/2014

  • Hot Issue

    EXPORTNEWS / Ditjen PEN/MJL/XXIII/10/2014 5

  • The global market share of sports shoes, also commonly known as athletic shoes, keeps growing from 2012. Furthermore, the analysts forecast this positive trend will keep moving upward by 2016. Thus, the Directorate General of National Export Development, Ministry of Trade of the Republic of Indonesia, views the export potentials provided should be optimally used to boost Indonesian export performance.

    The latest growth of sports shoes market is resulted from two factors. The first is the impact of economic recession which hit many major countries, particularly American and European countries, in 2013. The recession has caused the decrease of purchasing power of some citizens, so that they have to select pairs of shoes that are suitable for many occassions. The second factor is the changing of consumers behaviors towards shoes, from stylish shoes as the priority to comfortable and long-lasting shoes.

    The market share for sports shoes is always promising, since there is a lot of sports events organized either regularly or occasionally. The events provide huge opportunities for sports shoes producers in the world. A number of sports brands compete to give sponsorships, mostly in international sports events such as World Cup, Olympics and many others. The sports events yield to the increasing demand of sports items including sports shoes. The real example was when the 2014 World Cup 2014 took place in Brazil. The Director of Indonesian Trade Promotion Centre in Sao Paulo, Brazil, reported that the export performance of Indonesian footwear in Brazil rose. The increasing demand of sports shoes was possibly influenced by many factors such as the higher demand of sports shoes by football enthusiasts. There was a huge number of spectators came to Brazil to support their favorite football teams.

    Beside the number of sports events organized every year, sports shoes producers in Indonesia have

    acknowledged that sports shoes market is promising due to the low price of raw materials needed to make sports shoes. This sector averagely provides 45% of gross margin. The needed raw materials are synthetic rubber, plastic compounds, nylon, leather, polyurethane and canvas. The margin can be higher which can be brought about by the existence of online shops and also company-owned outlets.

    Applying product innovation and implementing effective market strategy are also essential for Indonesian exporters to become the leaders in global sports shoes market. Although comfort is a must, there are also other market segments who prefer st

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