The following research report contains market research, analysis, statistics and business intelligence relating to research on Footwear In Poland.

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ABSTRACT
With a population of 38.7 million, Poland offers a significant and promising market for footwear. The footwear market in Poland was worth USD 465 million in 1999 and is expected (according to data published for the first 9 months of 2000) to remain at the same level in 2000. The majority of footwear sold in Poland is produced domestically, and prices are in the medium to low range. Domestic production in 1999 was USD 450 million and is estimated to be USD 445 million in 2000. About 44% of Polish footwear in 1999 was exported and the remaining 56% was sold domestically. The same trend appeared in the first nine months of 2000.

In 1999, imports of footwear amounted to USD 215 million, a 5% decrease from 1998. The largest suppliers were: Italy, China, Spain, Vietnam, Indonesia, Thailand and Germany. The U.S. share was very limited, only USD 2 million. EU countries supplied almost 44% (USD 95 million) and developing countries over 53%( USD 114 million) of total imports. Similar or slightly lower results are expected for 2000.

The key competitive factors for suppliers are price, quality, modern and innovation design and strong brand recognition. Also very important is market promotion. A. MARKET HIGHLIGHTS & BEST PROSPECTS

Market Profile

Poland is a growing economy, having enjoyed a GDP growth of 5.6% in 1998, 4.1% in 1999, and 4.1% in 2000. At the same time, inflation has been steadily decreasing (17.8% in 1997, 13.6% in 1998, 10% in 1999, and 8.2% in 2000). Statistical data

MARKET SIZE TABLE (U.S. DOLLARS MILLIONS)

1998 1999 2000 * Growth Rate

Import Market 226 215 217 0-1% Local Production 475 450 445 0% Exports 194 200 202
0-1% Total Market 447 465 460 0%
Imports from U.S. 1.4 2.0
2.0 0%

Exchange Rate: 1998 USD 1= PLN 3.5 1999 USD 1= PLN 3.8 2000 USD 1= PLN 4.3
Estimated inflation rate in 2000 is 8%.
* 2000 data are estimated based on January-September 2000 data published by GUS (Main Statistical Office)

1999 Import Market Share:
Italy, 29%; China, 19,5; Spain, 6.8%; Vietnam, 5%, Indonesia, 3.6%; Thailand and Germany 2.1% each.

Best Sales Prospects

The following imported items are expected to be successful in the next three years:

- shoes with leather uppers over leather or other soles
- shoes with textile uppers over leather or other soles
- footwear for children and teenagers

The Polish footwear market is still quite conservative. Most customers prefer traditional colors and patterns. However, younger consumers with higher income are more receptive to the latest trends and fashions. There is a growing demand for modern designs. Shoes produced of python, crocodile, lizard or snake leather (or imitation), as well those made in very loud and intense colors, are enjoying a great demand currently. B. COMPETITIVE ANALYSIS

Marketing Strategies and Business Practices

According to GUS the percentage share of footwear and leather industry in the total sale amounted to 1,8% in 1999. The market for footwear has achieved a steady level. There is a tendency consumer demand for higher quality and more fashionable products. Macroeconomic improvements have narrowed the price differential between domestically made and foreign products.
The key competitive factors for suppliers are price, quality, innovative fashion and brand recognition. Also very important is market promotion. Price disadvantages faced by imports can be overcome when foreign suppliers are able to meet delivery commitments and negotiate attractive financing terms.
Domestic production and exports

According to data released by the Central Statistical Office (GUS), the 1999 footwear market in Poland was worth USD 465 million, a 7-8% increase over 1988. About 44% of Polish footwear in 1999 was exported and the remaining 56% was sold domestically. Mostly the same trend appeared in the first nine months of 2000.

In 1999, the domestic footwear manufacturing base was worth USD 450 million (44 million pairs of shoes). Manufacturers substantially improved productivity and quality. Footwear with leather uppers on non-leather soles accounted for 43% of domestic production. About 52% of the domestic production consisted of man-made uppers on non-leather soles. Industry experts estimate that footwear production could grow by 5-10% in 2000, especially in the shoes-with-leather-uppers segment. 1999 retail sales of shoes increased significantly over 1998, especially in small and medium-sized footwear retailers. The Polish footwear industry continues to develop promotional strategies, distribution channels and modern technologies. The top Polish footwear manufacturers are Krisbut, San-Dal, Lukbut, BUT-S (these three manufacturers have 8-10% of the footwear market), Lider, Neptun, Ariel, Eksbut, CSZ Buty, Brylko PPHU, Alka, Bartek, and Escott. Some footwear manufacturers cooperate with foreign companies: Chelmek with Melita/Great Britain and Radoskor with Salamander and Marc from Germany. Gino Rossi has established a factory in Slupsk.

Recently, domestic manufacturers have begun to respond to market demands for more sophisticated products. They follow international fashion trends and exhibit at the international shows. These manufacturers choose their retailers carefully and stay in close touch with their customers. Domestic footwear manufacturers are making a considerable effort to meet the demands of the new market and copy the techniques of their competitors. The Polish firms' prices are very competitive, and their products are quite fashionable. In 1999, the average retail price for pair of women's shoes with non-leather soles was $30, and that for boots was $60. The average retail price for a pair of men's shoes was $32, and a pair of children's shoes averaged $21.
Polish Exports

According to GUS, 1999 Polish footwear exports amounted to USD 200 million and grew by 3 - 4% over 1998. More than 60% of these exports went to European Union markets (EU) and 31% to Central & Eastern European markets (CEE). Shoes with leather upper on leather or other soles dominated Polish shoe exports. The main importers of Polish footwear were Germany, Italy, Great Britain and the Netherlands, as well as the USA and Ukraine. Textile upper shoes on leather or non-leather soles represented 9% of total exports. The major importers were Germany, the Czech Republic, Belgium, and France. Polish exports of footwear accessories and components, as a separate group, were worth USD 80 million in 1999. Over 77% of these exports were directed to EU countries (mainly Germany, Italy and Denmark) and about 18% to CEE countries, particularly Ukraine and Belarus. Exports for 2000 are expected to total USD 202 million.

Third Country Imports

Footwear imports into Poland for 1999 amounted to USD 215 million, a 5% decrease from 1998. China and other developing countries were the major shoe suppliers (over 54% of Polish footwear imports). China alone accounts for 19.5% (USD 40.8 million) of the Polish shoe market. EU countries represent 43% of Polish footwear imports, mainly from Italy (29% and USD 62.3 million), Spain (6.8% and USD 14.62 million), Germany (2.1% and USD 4.5 million), Portugal, France and Great Britain. Only 3% of imports arrived from CEE countries and developed non-EU countries. Brazil and Hungary have increased their sales of footwear in Poland. Leather shoes and low cost shoes made with rubber and man-made materials represented more than 50% of Polish imports. Foreign textile shoes on leather or non-leather soles were also popular in Poland. The latter were primarily from China and Vietnam. The U.S. share in the total 1999 imports was very limited, only 0.01%. In 1999, Polish footwear manufacturers imported footwear components worth about USD 44 million. About 94% of these imports came from EU countries (mainly Italy and Germany). Similar results are estimated (based on 9 months' data) are expected for 2000.

The major shoe importers in Poland are: Chrispol, Kazar, Renoma, Greenpol, Bosso, CDS, Baratto, Victor, DAB, Exclusiv, Limex, and Venturi.
Several well known brands are present in Poland, mostly from Italian, German and French manufacturers (e.g. Bata, Salamander, Sergio Rossi, Armando Pollini, Charles Jourdan, Romano Mazzante, Fratelli Rossetti, Colette, Galizio, Toressi, Gianrico Meri, Paul Tissi, Marino Fabiani, Guliano Venzani, Scholl, Hogl, Gabor, Lloyd, Rieker, Helix, Remonte, Dorndorf and others).
U.S. Market Position

American footwear is little known in Poland. Imports of footwear from the United States amounted to USD 2 million in 1999 and constituted a very small portion of imports to Poland (0.01%). American brand products are very often imported from Far Eastern factories owned or used by U.S. companies. The real share of American footwear on the Polish market is higher than reported, because when a U.S. company in China manufactures a product, imports of this product to Poland are considered to be imports from China, not from the U.S.

Poland has signed customs agreements with the European Union (EU) and Central European Free Trade Agreement (CEFTA). Consequently, footwear imports from EU and CEFTA countries are not subject to customs duties. For items not originating in those areas, duty rates are 12-17%. American products, therefore, are less competitive in the Polish market on the basis of price. Generally though, it is believed that American-made products represent high quality. C. END-USER ANALYSIS

Research on the Polish consumer market, which consists of a variety of end-user profiles, is based on demographic factors such as sex, income, age, lifestyle and neighborhood. The most important factors are income and sex. For example, upper to middle income consumers are not really concerned with price. This group appears to be more conscious of their image and appearance. They are looking for the best and will buy well known brand names. The lower income group of end-users is most comfortable in the mass market, which offers lower-price footwear, both imported and locally produced. But even in this group, customers may decide to purchase more expensive and prestigious products of higher quality.

The purchase of footwear is also influenced by fashion, which in turn is influenced by the consumer's age. All searches prove that young customers and those just above forty years of age are the most active consumers who do not save on footwear and tend to purchase fashionable shoes of high quality and high price. These customers also prefer to purchase in an exclusive footwear retail outlets located in upscale shopping districts.

Demand for footwear is increasing due to the increasing buying power of consumers. Growing demand for footwear is also the result of a well-developed retail network. City shops offer mostly imported footwear while rural shops offer mostly Polish products.
At the end of 1999 the Polish population was 38.7 million , 49% male (18.8 million) and 51% female (19.9 million). Urban dwellers in Poland represent 62% of total population (23.9 million). The average monthly gross wage in 1999 was $450, and the average monthly household income (per capita) was $150. The average household shopping budget in Poland is: food 40%, home maintenance 26%, clothing, shoes and toys 7%, health 6%, cosmetics 5%, and education and insurance 2.5%.
D. MARKET ACCESS

The following are import duties for all footwear and accessories categories:

HS 6401 Waterproof footwear with outer soles and uppers of rubber or plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging 17%

HS 6402 Other footwear with outer soles and uppers of rubber or plastics

17%

HS 6403 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather 12%

HS 6404 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials 17%

HS 6405 Other footwear
12%

HS 6406 Parts of footwear; removable insoles, heel cushions and similar articles; gaiters, leggings and similar articles 9%
A 7% percent value added tax (VAT) applies to all of the above listed products.
VAT is calculated on CIF price increased by customs duty, independent of the country of origin.

Certificates

Footwear does not require special certifications prior to being imported or sold in Poland. "B"certificates issued by Polskie Centrum Badan i Certyfikacji (Polish Center for Research and Certification, or PCBC) do not apply for these products. Certificates issued in the country of origin are usually accepted by Polish customs authorities.
Distribution/Business Practices

Pricing is an important factor at the wholesale level. High prices might discourage a buyer from engaging in any trade discussions and preclude any opportunity for the presentation of product advantages. Moderate prices and favorable conditions of payment can help make products attractive on the Polish market. Despite the strong position of European companies, there are good prospects for American products.
Poles hold the United States in very high regard and believe U.S. made products to be more reliable than products from other countries. U.S. companies interested in establishing business ties with Poland should take advantage of this environment. Manufacturers of footwear that are interested in expanding into the Polish market should devote adequate time and effort toward promoting their products.
The most common method of entering the Polish footwear market is to establish a local distributor or authorized representative. American companies are advised to ensure that their potential partner is familiar with the sector and is able to organize and develop effective sales network. U.S. firms should also consider opening branch offices and/or setting up their own distribution network.
Footwear is distributed by manufacturers straight to retailers or through wholesalers who offer both foreign and locally produced products. Shoes are usually sold in specialty retail shops for footwear and leather products. The number of retail outlets selling shoes has increased from 6,409 in 1996 (7,872 in 1998) to about 8,500 in 2000. The number of footwear companies which own more than two retail stores has also increased. Footwear networks are well developed in Poland. There are big footwear departments in every supermarket, department store and shopping center. A substantial role in the distribution of footwear, especially the cheapest products, is played by chains of supermarkets and hypermarkets, which often are included in large shopping centers. The most prominent hypermarkets in Poland are: Makro Cash & Carry, Selgros Cash & Carry, Geant Polska, Auchan Polska, Carrefour Polska, E. Leclerc and Hit Hypermarkets. Sixteen percent of Poles regularly shop at hypermarkets and supermarkets.

There are also networks of exclusive footwear retail shops located in large cities. Many local and foreign manufactures have developed their own retail chains, e.g. Bata, Ecco, Gino Rossi, Sergio Rossi, Pollini, Salamander, But Hala, Gabor and Kazar.

Financing

The recommended method of payment for imported goods is an Irrevocable Letter of Credit (L/C). Polish banks require that Polish customers deposit the entire amount of the transaction into the bank before issuance of the L/C. Typically, L/C's are opened for a period to cover production and shipping, and they are normally paid within seven working days of receipt of the goods. Cash payment or down payments provide an extra measure of security for export sales.

When both partners cooperate successfully and gain mutual trust and confidence, some importers are offered payment terms of 30 or 60 days after delivery. In some cases, trade cooperation in this sector is made on a commission basis in Poland, where the importer pays as sales are made and product delivered. This method of payment is generally made when a foreign firm has an exclusive representative or agent in Poland.

KEY CONTACTS

Polska Izba Przemyslu Skorzanego
(Polish Chamber of Leather Industry)
ul. Piotrkowska 148/150
90-965 Lodz
tel/fax: 48/42/636 12 21
e-mail: skorpol@ld.onet.pl
Ms. Aleksandra Krysiak, Director

Centralne Laboratorium Przemyslu Obuwniczego
ul. Zakopianska 9
30-418 Krakow
tel: 48/12/266 35 11
fax: 48/12/266 91 54
Mr. Andrzej Sliwa, Director

Polska Izba Przemyslu Tekstylnego
(Polish Chamber of Textile Industry)
ul. Traugutta 25
90-950 Lodz
tel/fax: 48/42/632 36 15
Polska Izba Mody
(National Chamber of Fashion)
ul. Piotrkowska 282 A
93-034 Lodz
tel: 48/42/683 21 40, 683 21 41
fax: 48/42/683 21 44
Ms. Barbara Wandachowicz, President

Domestic manufacturers of footwear:

ALEXA PPh
ul. Mieszka I 30
26-600 Radom
tel; 48/48/384 75 27

BUT-S S.A.
ul. Boczna 22/24
95-050 Konstantynow Lodzki
tel/fax: 48/42/211 26 13

EKSBUT Produkcja Obuwia
ul. Kosciuszki 40
06-500 Mlawa
tel: 48/23/654 41 96, 654 33 86; fax: 48/23/654 33 86

GINO ROSSI Sp. z o.o.
ul. Owocowa 24
76-200 Slupsk
tel: 48/59/842 26 08
fax: 48/59/842 26 12
Trade Office:
ul. Felinskiego 32/1
01-569 Warszawa
tel/fax: 48/22/839 80 22

KRISSBUT S.A.
ul. Slowackiego 50
42-300 Myszkow
tel; 48/34/313 17 39; fax: 48/34/313 72 01
e-mail: krisbut@krisbut.pl
www.krisbut.pl

LIDER S.C. PPHU
ul. Sloneczna 8
42-310 Zarki
tel: 48/34/314 95 41

LUKBUT S.A.
ul. Wojtostwo 23
21-400 Lukow
tel: 48/25/798 24 71; fax: 48/25/798 37 42
www.lokbut.com.pl

NEPTUN Sp. z o.o.
Starogardzka Fabryka Butow
ul. Pomorska 5
83-200 Starogard Gdanski
tel: 48/58/562 34 51

SANDAL-2 PPH
ul. Reymonta 10
62-200 Gniezno
tel: 48/61/426 33 62; fax: 48/61/426 46 81

Importers/distributors of footwear:

ANPI Import-Export
ul. Zrodlana 1
78-132 Grzybowow-Kolobrzeg
tel: 48/94/358 11 30; fax: 48/94/352 74 05
http://priv5.onet.pl/szc/anpistatus

CHRISPOL
ul. Parowcowa 2/8
02-445
tel: 48/22/863 20 45

ECCO POLSKA Sp. z o.o.
ul. Kolejowa 100
05-092 Lomianki
tel: 48/22/751 21 48, 751 09 73; fax: 48/22/751 21 48
e-mail: eccopl@pro.onet.pl
www.ecco.com

EXCLUSIV Sp. z o.o.
ul. Ruska 3Ú4
50-079 Wroclaw
tel/fax: 48/71/342 13 15

FALC POLAND Sp. z o.o.
ul. H. Szafran 1
60-693 Poznan
tel: 48/61/842 55 66; fax: 48/61/842 55 77

GREENPOL Sp. z o.o.
ul. Pulawska 352 A
02-819 Warszawa
tel; 48/22/648 07 96; fax: 48/22/648 07 98
e-mail; greenpol@wa.onet.pl
www.bonmax.com.pl

KAZAR S.C.
ul. Lwowska 154
37-700 Przemysl
tel: 48/16/678 02 12; fax: 48/16/678 02 13

LIMEX S.C.
ul. Zmigrodzka 224
51-129 Wroclaw
tel; 48/71/352 93 38; fax: 48/71/352 96 33

VENTURI ul. Pana Tadeusza 10
02-494 Warszawa
tel/fax; 48/22/863 22 44
mobile: 0 601-23 68 55

WORTMANN POLSKA Sp. z o.o.
ul. Startowa 15
60-408 Poznan
tel: 48/61/84 77 3131; fax: 48/61/84 77 314
e-mail: biuro@wortmann.pl
www.wortmann-schue.de

Trade Promotion Opportunities

Participation in Polish trade fairs has proven to be a rewarding vehicle for new entrants into this market. For the underwear sector the major events are:

EVENT POZNAN FASHION WEEK SITE Poznan, MTP DATES March 6-9, 2001 and August 27-30, 2001
ORGANIZER International Poznan Fair Sp. z o.o. ADDRESS ul. Glogowska 14, 60-734 Poznan PHONE 48/61/869 24 75, 866 69 22
FAX 48/61/866 06 90
E-MAIL ptm@mtp.com.pl
INTERNET www.mtp.pol.pl
EVENT OBUWIE-SKORA Jesien-Zima
SITE Lodz, Miedzynarodowe Targi Lodzkie
DATES May 16-18, 2001
ORGANIZER Polish Chamber of Leather Industry
PHONE 48/42/636 12 21
FAX 48/42/636 12 21
E-MAIL skorpol@ld.onet.pl

The major professional trade magazines are:

SWIAT BUTOW
(FOOTWEAR WORLD)
and
THE POLISH FOOTWEAR MARKET CATALOGUE 2001
Publisher:
UNIT Wydawnictwo Informacje Branzowe Sp. z o.o.
ul. Powsinska 28A
02-903 Warszawa
Ms. Karolina A. Wirowska, Publishing Director
tel: 48/22/642 22 70 ext 133, 858 90 09
fax: 48/22/651 73 95
e-mail: unit2@unit.com.pl
http://www.unit.com.pl

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

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Published: 2006 August
Market: Womens
Region: Poland
Industry: Accessories
Pages: 45
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