Europe’s economy is slowly picking up, with moderate growth expected for the footwear market. E-commerce calls for quicker service and more digital (and visual) data from you as a supplier. Growing social and environmental awareness is influencing market requirements and free trade negotiations. Technological innovations, such as wearable tech and three-dimensional (3D) printing, will influence shapes and styles and increase speed. Health consciousness is pushing sports footwear sales and innovation.

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1 . Moderate 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. European Commission forecasts suggest a modest growth of around 2% in 2016 and 2017. The biggest growth in 2017 is forecast for the edges of Europe, with Romania (+3.7%), Ireland (+3.7%), Poland (+3.6%), Spain (+3.5%) and Slovakia (+3.3%) topping the charts.

The recovery is positively affecting the footwear market. According to a study by Transparency Market Research, the European footwear market will show a moderate compound annual growth rate of 1.5% between 2015 and 2021. Major drivers are the growth of eco fashion footwear, changing lifestyles – for example more health-consciousness and exercise – and increased e-commerce.

While buyers remain cautious and price-conscious, they are eager to tap into growth opportunities and many of them will be looking for new suppliers, especially in lower-cost countries.

2 . Terrorist threats cause temporary pressure on sourcing to Turkey

Garment exports from Turkey to Europe and elsewhere suffered slightly in the first half of 2016 due to terrorist attacks and a coup. Turkish government and sector representatives passed the slowdown off as a temporary dip. It does illustrate how terrorism can make consumers and buyers feel unsafe. Travel has suffered following attacks in France, Belgium, Germany and Turkey. Some European companies have stopped sending staff to countries perceived as ‘high-risk’, such as Turkey or Bangladesh.

The threat of terrorism can also affect transport. For example, import inspections are stricter, especially for products and containers coming from countries associated with terrorism. Road transport within Europe may also suffer delays because of more rigid inspections.

For footwear suppliers from developing countries, the presence of terrorist threats in Europe creates both opportunities and threats. Buyers may want to avoid countries – or transport routes – associated with (Islamic) extremism. On the other hand, the instability of Turkey – or a decrease in its supply capacity – may cause some of them to look for alternative sourcing destinations.

3 . Brexit may affect your shipments to the United Kingdom

Brexit, or the exit of the United Kingdom from the European Union, has caused a lot of consternation in Europe’s political and corporate world. It is not yet directly influencing trade, but you can expect changes as trade agreements between the United Kingdom and other countries inside and outside of Europe are renegotiated.

For example, imports into Europe from the United Kingdom will face stricter regulations. This will be a challenge to footwear players who currently distribute to their stores throughout Europe from the United Kingdom. Another factor to take into account is that the exchange rate of the British pound and the euro may strongly affect the behaviour of United Kingdom-based buyers.

The effects of Brexit on you as a supplier in a developing country will be greatest if you do a lot of direct business with British footwear players. Your trade with other European companies may also be influenced, for instance if they depend on the United Kingdom for shipping.

4 . E-commerce is forcing players to change their game

European consumers increasingly buy their footwear online. Sellers can be big and small brands, multi-brand web shops, retailers and apparel chains. 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, according to an Ecommerce News Europe report. Almost every footwear brand has a web shop or uses existing online sales channels. Some retailers are struggling to keep up with e-commerce and are losing traffic to their physical shops.

5 . Social media are shaking up the market

Like e-commerce, the growth of social media is also shaking up the market. Many footwear brands have stepped up their social media activity. For example, media reports say Adidas is taking over the sneaker world through social media. TOMS is another brand with a strong (social) media presence.

Facebook is a leading social media platform in footwear. For example, Nike Football has over 42 million Facebook followers and Converse over 37 million – placing the two among the world’s top eight brands on Facebook. Youtube, of course, is also a hot spot for consumers, trend watchers and brands. Brands like Steve Madden, Crocs, and Sam Edelman are using Instagram and other social media to give followers direct access to their ad campaign shoots, fashion shows and front rows.

The growth of e-commerce does not mean Europe will no longer have offline footwear shops. E-commerce cannot survive on its own: companies that combine e-commerce and online activities with offline commerce will be the most successful.

The growing use of the Internet, e-commerce and social media also offers you opportunities as a small to medium-sized exporter based in a developing country. It may be too early to open up your own web shop in order to sell directly to European consumers, but you can certainly use the Internet and social media to your advantage.

6 . Sustainability and corporate social responsibility are gaining ground

Sustainability and corporate social responsibility are major concerns to many non-governmental organisations in Europe – and therefore also to consumers and buyers. Reducing the use of hazardous chemicals and improving labour conditions are key issues. Other concerns range from animal welfare, waste management and traceability to child labour and fair wages.

As a result of this trend, European buyers will increasingly be looking for innovative sustainable footwear solutions, for example environmental-friendly materials and production methods. They will also be keen to find suppliers who have a strong social and environmental record.

One effect of this trend is that some Europeans prefer footwear produced in Europe to non-European products. They feel the social performance of European manufacturers is easier to monitor than that of producers in faraway countries. This means that as a supplier you have to offer clear evidence of your performance if you want to convince buyers to work with you.

7 . Eco footwear is a small, but exciting growth market

The push for more sustainability and corporate social responsibility is fuelling the eco fashion niche. Eco-friendly shops are growing in numbers. Eco shoes, once considered eccentric, are now quite fashionable, especially in the north and west of Europe. Eco footwear is all about ‘clean’, responsible materials and production methods.

This niche can involve recycled leather, organic cotton, chemical-free production, clean leather tanneries and more. Eco footwear might be made of upholstered leather from cars, trains or subways, or natural products, such as canvas, hemp or rope. Some brands have soles made of recycled tyres, cork or wood. Examples: El Naturalista, Terra Plana, Eco Vegan shoes, Planet Shoes, Ecouterre. Alibaba’s used shoes are also a good example.

8 . Favourable trade agreements can heavily influence your pricing

Politicians are as concerned about environmental and social issues as consumers are. Import duties are a common means for European politicians either to restrict or to encourage imports from certain countries, often on the basis of their political, social and environmental performance. This is how Europe’s Generalised Scheme of Preferences (GSP) has caused some shifts in global supply chains. Effective since 2014, this scheme allows some developing countries to pay less or no duties on exports to Europe.

The GSP countries that in the past did not have to pay import tariffs in Europe – such as China, Morocco and Tunisia – no longer have that advantage under the new scheme. This has improved the competitive position of countries still 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.

9 . Technology is accelerating production and reducing labour

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.

Both individual machines and entire production lines are constantly being fine-tuned, improved and renewed in footwear. Technology is progressing in several areas:

10 . Technology is blending footwear with other industries

Technology is opening up opportunities for many new market cross-overs and co-creation initiatives. It is linking footwear to health, for example with smart shoes for runners. Adidas’ partnership with Kanye West is one of many examples of music and entertainment brands embracing footwear production.

The health hype in Europe is a major driver of this technological trend. New health applications for consumers are appearing almost daily, ranging from identification (ID) tags for runners to measuring equipment for the wearer’s heartbeat and other health factors. Footwear is an ideal carrier for many new applications and gadgets.

The footwear market, particularly the sports, casual and outdoors segments, is also keen on new, high-tech materials. For example, new waterproof and breathable materials are in high demand, as well as materials with cooling properties.

11 . Consumers like products they can personalise

Personalisation is an important trend in Europe, with individual consumers increasingly demanding their own, unique ‘look’. Some brands tap into this desire by offering personal designing or customising a product. With today’s camera and software technology, consumers looking for products on the Internet can watch the actual production process, or personalise products on brand websites. Vans Custom Shoes and iShoes by iTailor are among many examples in this area.

12 . Ageing is leading to more demand for health-related 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.

Seniors may be underserved in the footwear market, as few prominent brands currently address this group of consumers. If you want to serve this segment, you have to understand the lifestyle of today’s seniors in Europe. For instance, many seniors continue to work. They also tend to have a more physically active lifestyle than their predecessors, and are spending more on travel and tourism.

A lot of younger-generation entrepreneurs in Asia and other developing countries are starting up factories on a higher CSR level than was common. These young entrepreneurs are often well-educated and well-travelled – many have studied in North America or Europe – and have returned to their native countries with a keen understanding of global markets and a drive to make a difference. Antonio Barberi Ettaro, Modint, Dutch fashion branch association

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Updated on Wednesday, October 19, 2016 - 12:00

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