September 2006, No. 41

Global Economy

Shoe Imports
A Serious Threat to Domestic Market

United Arab Emirates, China, Italy, Thailand, and Turkey account for 96 percent of total shoe exports to Iran by exporting 1.55 million dollars, equivalent to 1.4 billion toman worth of shoes to Iran.

Do you remember Michael Jordan’s feat in the old film, Space Jam, which was screened 10-15 years ago? Experts are sure to remember what shoe he was wearing when he made his strange leap in the concluding scene of the film. Only weeks after the film was screened, that brand of shoe reached its peak sales in the United States and Europe. The name of Michael Jordan as the number one of in the history of basketball was enough to guarantee high sales of those shoes for years to come. If he had known that what effect his leap would have on the market of sport shoes in Iran, he would have certainly leaped two or three meters higher!

Another film, I Robot, also greatly affected the sport shoe market. The “AllStar” shoe brand which was worn in that film by the handsome Hollywood actor, Will Smith, conquered Iran’s market before long. Also, commercials that are made today which are imitations of those successful films, have greatly manipulated the market.

There if no doubt that amazing moves of Ronaldhino for Nike brand, surprising maneuvers of Zeidan and Beckham for Adidas brand and feats of Del Piero and other Italian soccer players for Puma brand, have greatly affected sales of their merchandise. Competition for selling such products was not limited to global markets, but they have also influenced shoe market in Iran.

If you don’t believe this, it is enough to have a look at shops selling such commodities in big shopping malls of Shahrak-e Gharb, Tajrish and Vanak as well as commercial centers in downtown Tehran, and see how many new brands of shoes, most of them carrying six-digit price tags in tomans, are being showcased at those places.

Imported Shoes Sold for 3,000 Tomans: The Public Relations Department of Iran Customs Administration has reported that since the beginning of the current Iranian calendar year (started March 21, 2006), 938 tons of various shoes, worth 1.614 million dollars equivalent to 1.453 billion tomans, have entered Iran from various countries.

If average weight of a pair of imported shoes is taken to be 1-2 kg, its value will stand at a minimum of 1,550 tomans and a maximum of 3,100 tomans. In this calculation, figures have been rounded upward and also, expenses related to customs tariffs and municipality duties, transportation, labor and other instances have not been taken into account.

The report has also noted that the United Arab Emirates, China, Italy, Thailand, and Turkey account for 96 percent of total shoe exports to Iran by exporting 1.55 million dollars, equivalent to 1.4 billion toman worth of shoes to Iran. Also, United Arab Emirates, which stands at the top of the list, exports 666 tons shoes, worth 964,000 dollars to Iran alone, which is equal to about 868 million tomans. According to the previous assumption, if the United Arab Emirates shoes in the Iranian market are sold for 1,300 tomans to 2,600 tomans for every pair of shoes and considering various expenses, the retailers will still reap good profits. This is not surprising because domestically made shoes, apart from their outmoded design, will have no place in the market, because a pairs of plastic slippers produced inside the country will be more expensive than 3,000 tomans and will be less profitable for retail sellers of shoes.

The big question is how much a country like China, which stands second in terms of shoe exports to Iran by accounting for 28.8 percent of shoes exported to Iran over the first four months of the current year, spends on shoes, which can export them at such a low price? What is their solution for reaping such hefty profits? 

Prices at Iran’s Shoe Market: Anyway, the Iranian shoe market (at least sport shoes) is a sales place for imported models of such famous brands as Adidas, Puma, Diesel, Lacoste and many other brands that are offered in the Iranian market according to a rating system. The rating system is based on whether the shoe is original or counterfeit. For example, light and delicate models of Adidas brand, which are usually bought for everyday use, are priced at 70,000-95,000 tomans. At the same time, the second rate models of the same brand, which are usually made in China are not sold more expensive than 40,000 tomans for every pair of shoes.

A shoe seller says, “We recommend customers not to buy second or third rate shoes, because they will be worn out in 4-5 months and their appearance changes even earlier, for example, in two months.”

He said the only way to differentiate among various shoes is resilience as well as being careful about the material they are made of.

Sport Adidas shows with black or dark blue color are usually favorites of customers. One of them is T-Mac model which is worth 70,000 tomans up to 100,000 tomans depending on where you buy it.

Such high prices can, of course, be reduced through bargaining. Therefore, you must not forget that there are no definite prices in the market and the real price depends on bargaining.

Although delicate models of Nike are not original American Nike, they are more expensive than Adidas. They are sold from 80,000 tomans to 110,000 tomans per pair. The point is that the more expensive a show is, the more frequent its counterfeit models can be found in the market.

The original models of Nike brand are still in demand and are more expensive than counterfeits. The original model is sold for 70,000 tomans up to about 90,000 tomans while second rate shoes are sold for about 25,000 tomans up to 40,000 tomans. The famous AllStar brand is still a favorite in the market. Its design is simple and it is presented in varied colors while its resistance to wear-and-tear is relatively high.

Sports shoe market of Iran, unlike many other markets, is not seasonal. A retailer says, “Apart from such periods as the beginning of summer or the beginning of educational year, when our sales are slightly higher, sports shoe sales are relatively good and constant throughout the year. Sports shoes are not merely worn for sporting purposes, but are worn everywhere and even are worn as official shoes in workplaces and in parties.”