China's footwear suppliers are expecting strong sales growth in the next 12 months and are working to improve operating efficiency and lower costs as price competition intensifies, a new report says.

Among the Chinese footwear suppliers who were surveyed, more than half (56%) expect sales to grow by 10-20% over the coming year. Just 14% expect sales to remain flat or to decline.

"While suppliers are optimistic about sales, amid signs of an economic recovery, they are less than positive about export prices," said Livia Yip, associate publisher of Global Sources' 'China Sourcing Report: Footwear.'

"Among suppliers we surveyed, 64% said price competition is their main challenge ahead.

"This comes as exporters struggle to keep costs low, while competing for orders from buyers who remain highly price sensitive."

After price drops in previous quarter, suppliers are investing to become more efficient.

Yip said: "In the past three months, 66% of suppliers either decreased or kept prices steady.

"Suppliers now realise that, going forward, they must look towards improving efficiency or offering value-added services to increase their margins."

Another strategy for suppliers is to move upmarket by developing their own designs.

Until recently, most companies relied on OEM orders, but many are now improving R&D capabilities to create more in-house releases for domestic and international markets.