27 January 2023
Mexico’s footwear sector is facing several challenges this year. Among these are the growing number of illegal imports, the shortage of locally manufactured components, and the practices of chain stores and department stores when it comes to payment, credit and the imposition of unilateral discounts when payment is made.
The two main footwear chambers of the country, CICEG from Guanajuato state and CICEJ from Jalisco, which manufacture almost 80% of national production, are looking to strengthen cooperation to tackle these problems facing the industry.
Mexico manufactures 225 million pairs of shoes per year but at the same time around 90 million pairs enter the country as direct or technical contraband mainly from China and Brazil. Such illegal imports account for 29% of available footwear against 71% which is manufactured nationally.
Low-priced footwear from doubtful sources, is attractive for the retail sector which prejudices Mexican shoe manufacturers as it is unfair competition posed by contraband.
Local manufacturers also face internal problems from larger participants in the retail sector. For example, payment can take anything up to 90 days putting pressure on cash flow especially in the case of small factories. In addition, chain stores and department stores that offer discounts to consumers, apply such discounts to manufacturers’ invoices, making them unwilling participants in the discounted footwear market.
The other challenge facing Mexico’s footwear sector is the dependence on imported supplies and components mainly from China. Both CICEG and CICEJ want to develop the local supply sector, create jobs, and reduce contraband supplies that continue penetrating the industry.