Of all Scandinavians, Norwegians are the highest spenders when it comes to clothing and footwear, writes market trends analyst ViP Consultants. This feature, an extract from ViP's Norway report, gives the lowdown on how to break in to a very profitable footwear market.

In spite of a recent recession and growth in unemployment in Norway, the increase in demand for footwear has continued to grow and has quelled any fears by suppliers that inflation rate increases would affect the sales of footwear.

The average Norwegian spends as much as 7.5 per cent of their annual earnings on clothing and footwear, compared with the 6.8 per cent spent by both the Swedish and Danish consumer and the 5.3 per cent spent by the Finnish consumer. Each year, the Norwegian consumer spends an average of NOK5,000 ($553) on clothing and footwear. This creates a total market demand of about NOK4.3bn on footwear ($475.3m).

Perhaps the most remarkable statistic regarding this market relates to the disproportionate amount of footwear that is currently being manufactured in Norway in relation to the amount imported. Of the small percentage of footwear and clothing that is being manufactured in Norway the majority caters to a highly specialised market including traditional folklore celebrations and military uniforms.

There are also a very small number of Norwegian manufacturers that have successfully established themselves in the mainstream domestic market. Nevertheless, these manufacturers cannot seriously compete with foreign manufacturers wishing to break into the Norwegian market.

This limited domestic production has resulted in an incredible 97 per cent of the Norwegian footwear market being made up of foreign imports and it is from this sector that the greatest competitive threat comes.

Chief competitors
To find the major market competitors in the Norwegian market one must look overseas. As in other international markets these competitors fall into three main price-orientated categories as well as three main footwear categories differentiated by the materials used in their production.
In terms of price and quality, the following categories are identified as follows:

  • Cheap footwear of relatively low quality. This footwear enters Norway largely from Far Eastern countries such as China, Indonesia, Thailand or the Republic of Korea.
  • Expensive footwear that is held in high esteem by the market. This is high quality footwear that depends greatly on reputation and the creation of high fashion labels. Italy leads this segment of the market.
  • Medium-priced footwear of medium/high quality. Manufacturers in this market segment have to excel at combining price/quality ratio with the changing fashions. Footwear in this segment originates largely from countries with strong footwear traditions such as Portugal, Germany, Spain, UK and, once again, Italy.

In general the overall quality found in the Norwegian shops is above average for Western Europe but as the Far Eastern countries are finding ways to improve the overall quality of their products this cheaper footwear is finding an ever greater acceptance in the Norwegian market.

Shoe rules
Young Norwegians are not particularly faithful to any one particular fashion label. This means that they are receptive to new offers. However, it must be noted that they have a mature eye for quality requiring that the manufacturers pay special attention to their price/quality ratio and quality control.

In contrast to the younger Norwegian the more elderly Norwegian consumer is more reluctant to change to buying a different style and brand of footwear.

The sole is an important selling point for the Norwegian buyer. Existing shoe collections designated for the Norwegian market may have to have the thickness of their soles increased. This is largely due to the severe climatic conditions of the country with its high rainfall and long cold winters.

Footwear targeted for the Norwegian market should have a thermal innersole included in the design of the shoe. Norwegians have a habit of buying special thermal innersoles every winter.

Sports footwear should be water resistant, especially for the winter season. It is important to be aware of the Norwegian tendency to wear practical and comfortable sporty-style footwear out of office hours (and sometimes even in office hours). Notable styles that are enjoying growing success are trekking boots/shoes and other all-terrain-style shoes/boots.

Wholesalers/distributors who import
Distributors and wholesalers, unlike agents, purchase in bulk, largely from European sources, and redistribute the goods to clients straight from their own warehouses.

The commercial margin for a typical Norwegian wholesaler is between 30-40 per cent. Obviously there are advantages working with a wholesaler rather than an agent as the wholesaler's often greater sales capacity can ease the pressure of the ever increasing demand on the supplier to speed-source the retailers.

Norway is a very large country with a small population and this has led to there being far fewer wholesalers than agents who import footwear. Footwear exporters looking to penetrate the Norwegian market should also be aware that many importers from Denmark and Sweden operate in this market via subsidiary companies or by collaborating with a Norwegian partner.

A complete and updated list of Norwegian buyer contacts, including all major distributors and agents who import, is included in the ViP Dossier.

Chain stores
One of the biggest factors in the increase in footwear sales in Norway is the growing presence of large and aggressive chain stores in the marketplace. These commercial entities are rapidly increasing their share of the market and by the end of 2001 this could be as high as 70 per cent.

At present there are two major chain store associations that sell footwear: Euro Sko and Skoringen. Both these entities are Danish but Euro Sko operates from its base in Norway and Skoringen operates directly from Denmark.

These chain stores frequently make large orders but also are likely to get involved in the design, distribution and promotion of the footwear. Both the above-mentioned companies have their own design labels but, of course, sell a wide range of footwear.

At the moment these chain stores are buying leather footwear from Portugal and textile, rubber and sports footwear from the Far East. Other chain stores of note include Din Sko (a subsidiary company of a Swedish group) and Okonomisko, whose product offer falls within the medium/low price and quality range. Skoforum is a chain store that offers high quality and high priced collections of footwear.

Footwear trade fairs
In Oslo every March and September, the Norwegian Shoe Fair (Skomessen) is staged. This event is organised by the Norwegian Association of Footwear Wholesalers and Agents (Skogrossister og Agenters Landsforening). The fair is held in the Sko Senteret (Footwear Centre), which is a permanent exhibition centre.

This trade fair is directed principally at the retail sector and comprises stands of exhibits of all the major Norwegian wholesalers and importers. It is an excellent opportunity for prospective exporters to get to know the market trends and potential clients. The fair also provides a good opportunity for suppliers who wish to work directly with the retail sector without having to go through margin cutting Norwegian intermediaries.

To view the full ViP 'Norwegian Footwear Market Entry Report' click on the link below