National footwear businesses urge the government to help businesses in enlarging domination of domestic market share. Market portion of local shoes in the domestic market is only around 50%, and it is considered less profitable for footwear industry. “Imported shoes, especially from china, dominated 50% of domestic market share”, said Djimanto, member of Advisory Council of Indonesian shoe Association (APRISINDO).
According to Djimanto, in a condition where global shoe market has been fully recovered from global crisis, enlarging shoe market share in the domestic market is a right strategy. He explained that some main export destination countries of Indonesian footwear such as United States, Europe, and Japan, have not yet fully recovered. While, doing market diversification to other countries is not easy.
Djimanto said that diversification of export market to other countries has already been performed. But, again, we come face-to-face with China. China will still become Indonesia’s competitor, as market diversification is most possible to be done on middle to lower class products. “In these segments, we are surpassed by China. So, the best strategy is to strengthen domination of domestic market”, he said.
Djimanto explained that market value of footwear domestically reaches Rp 25 trillions per year. If the local businesses are able to enlarge domestic market share, it will promote national footwear industry. And, it could also become an alternative market when some export destination countries are sluggish and market diversification has not yet been fully established. He also expects the businesses to be more creative in making strategies in the midst of tight competition, for example by developing design and quality.
One of the weaknesses of Indonesian-made shoes, according to him, is the design which is unfashionable and monotonous. If compared to China and Vietnam, Indonesian shoes are more qualified. But, world’s shoe design which is changing rapidly is not balanced with creativity of local shoe businesses.
While, shoe is a kind of fashion which should always be fashionable. Moreover, woman shoes, their development is very fast. Trend of women shoe models could change every day. Djimanto said that even though from the aspect of quality Indonesian shoes are better, but if from the aspect of trend or model it does not follow the latest trend, Indonesian shoes will become uncompetitive in the market. “There should be a cooperation between the businesses and designers in order to produce shoes which meet buyers’ expectation”, he said.
In addition to model and design, from the aspect of price, Indonesian shoes are less competitive if compared to imported products, especially from China. To make Indonesian shoes competitive in the market, the government should remove the unnecessary levies which have become a burden to the businesses.
Illegal levies are distorting the industries. When there is an additional cost of production, businessmen will add it to selling price. It means that the additional cost is imposed on buyers in the from of price increase.