Mexico’s Footwear Industry: Navigating a Closed Border Landscape

Mexican footwear, from the inside. Despite the fact that footwear consumption has already recorded several years with double-digit increases, a trend driven by the continued growth of the population, the footwear industry in Mexico has suffered an even greater setback. The country, which remains one of the world’s leading footwear producers, recorded a drop of up to 15% in annual production in 2024 compared to the previous year, according to data from Icex España Exportación e Inversiones accessed by Modaes. Now, the country has launched a renewed protectionist strategy to return the domestic industry to growth.

Last August, the Mexican government temporarily suspended part of the imports of finished footwear, a measure aimed mainly at alleviating the negative effects of the arrival of these products from China at a much lower price. In addition, Mexico has also announced a “compensatory” tax on all footwear produced in the Asian giant.

In 2024, domestic footwear companies produced 214 million pairs of shoes, while industrial capacity utilization did not even reach half of the total, with a utilization of 46% of installed capacity. This decline is due to the continued growth of imports, above that of exports.

Specifically, footwear imports reached US$2,163 million in 2024, 12.7% more than the previous year. The sector has registered this upward pattern since the pandemic, with increases in 2023 (5.2%), 2022 (31.9%) and 2021 (28.3%), higher than those recorded by exports. Compared to an increase of almost 13% in imports, sales of Mexican footwear abroad amounted to 1,305 million dollars in 2024, 7.25% more than the previous year.

Mexico exported footwear for 1,305 million dollars and imported another 2,163 million dollars.

Despite also maintaining an upward trend, imports have grown at a slower rate than imports: 1.7% in 2023, 29% in 2022 and 34.3% in 2021. Faced with this fall, the country has launched a series of incentives to boost the recovery of the footwear industry, which is expected to return to growth in 2025, with an increase of up to 5% at the end of the year, according to Euromonitor data collected by Icex.

Improvements in exchange rates or strategies to differentiate domestic supply are some of the strategies planned for this year, together with protectionism, the last great commercial trump card. At the end of August, the Mexican government announced the temporary suspension of part of the footwear imports under the special tax regime of the Manufacturing, Maquiladora and Export Services Industry (Immex) program. As explained last week by the country’s Secretary of Economy, Marcelo Ebrard, the companies were bringing footwear into the country without being subject to VAT, as the products were finished in Mexico and exported later.

Many companies, however, ended up keeping the product, most of which was produced in Asia, and marketing it in Mexico, adding a strain on the prices of the national product, the president denounced. Despite the initial alarm within the international footwear sector, including the Spanish one, this limitation targets imports of goods destined to be exported again, and not those that remain in circulation in the country .

The government has implemented protectionist measures for the industry.

Exports from the European Union to the country, in fact, recalls the Federation of Spanish Footwear Industries (Fice), are still subject to a 0% tariff. At the same time, the Mexican government has announced a new special levy, known as “compensatory”, on Chinese footwear exports, with the aim of balancing the costs of Asian products with those of domestic products. Thus, imports with a value of less than US$22.58 entering the country over the next five years will be subject to a tax of between US$0.54 and US$22.50.

Sourcing and consumption

Mexico currently has 130.8 million inhabitants, with a Gross Domestic Product (GDP) per capita of US$14,158. The continued population growth, which since 2020 has recorded an increase of 3.1%, has boosted consumption in the country, including in footwear. At the close of 2024, footwear sales growth was 10.7% over the previous year, with 341 million pairs of shoes sold in Mexico. In the last two years, total footwear sales increased another 12.4% in 2022 and 23.8% in 2023.

Some 84.8% of the footwear sold in the country last year was marketed through the physical channel. Of this total, 26.1% was sold in specialty stores, followed by department stores and sports stores, with a market share of 10.2% and 8.7%, respectively.

Spain exported almost 40 million euros worth of footwear to Mexico.

Within the Mexican market, a large part of imports, 41.6%, comes from China, followed, although far behind, by the other two Asian giants, Vietnam, with 28.8% of exports, and Indonesia, with another 11.15%. Spain, for its part, sold 39.7 million euros worth of footwear to Mexico, 1.8% of the total, the second largest European country, behind only Italy.

On the other hand, Mexican footwear exports are mainly destined for the United States, receiving up to 90.1% of sales abroad. Countries such as Belize, El Salvador, Panama and Guatemala are the next largest destinations for Mexican footwear sales abroad, although with much smaller shares, ranging from 3% to less than 1%.

The share of Mexican footwear sales abroad ranges from 3% to less than 1%.