By D.W.G. Kalani Tharanga, JadeTimes News
Portugal is positioning itself as a formidable competitor to Italy in the luxury footwear industry, announcing a significant investment of €600 million over the next few years. According to EY Parthenon's study, "The Footwear Industry’s Path to Luxury," Portugal could become a key player in the luxury footwear sector by reducing costs and exploring new market segments.
Currently, Portugal's footwear cluster comprises 1,500 companies involved in footwear, components, and leather goods, employing around 40,000 people and exporting 90 percent of its production to 173 countries across five continents. With the new Strategic Plan for the Footwear Cluster 2030, Portugal aims to enhance its production capabilities, commercial development, and innovation.
Miguel Cardoso Pinto of EY Parthenon highlighted the challenges of rising costs and increased competition, emphasizing the need for the sector to "review its positioning" for financial sustainability. The consultancy suggests that Portugal should "increase scale by integrating different players," boost productivity through advanced industrial processes, optimize labor costs, and reduce raw material costs through product innovation.
Portugal's Strategic Advantages Over Italy in Footwear Production
EY Parthenon's report notes that Portugal holds several advantages over Italy, which faces high production costs, a market dominated by intermediaries, and a shortage of skilled labor. Both countries offer high quality footwear production, but Portugal benefits from lower production costs, positioning it as an attractive alternative.
Luis Onofre, president of the Portuguese Footwear, Components, Leather Goods Manufacturers’ Association (APICCAPS), expressed the country's ambitions: “We want to be an important international reference. Every year, 24 billion pairs of shoes are produced, with about 90 percent made in Asia. This dominance is not sustainable. We believe there is ample market space for players like Portugal.”
As Portugal seeks to establish itself as a significant player in the luxury footwear market, its commitment to innovation and cost effective production could reshape the industry's landscape, offering a compelling alternative to traditional Italian craftsmanship.