In recent years, Vietnam has emerged as a key player in the global textile and garment supply chain, transitioning from a low-cost manufacturing hub to one of the world’s leading exporters of clothing and textiles. Its strategic location, competitive labor costs, and steadily improving production capabilities have made Vietnam a trusted sourcing destination for many international brands.
Today, the textile and garment industry plays an important role in Vietnam’s economy, contributing nearly 44 billion USD to the export revenues and providing employment for millions. However, the sector is undergoing major changes, driven by global trends such as the growing adoption of the “China Plus One” strategy and the rising demand for sustainable and responsible production.
These developments present both opportunities and challenges that Vietnam must navigate to maintain its long-term competitiveness.
Opportunities for Vietnam’s Textile and Garment Industry
Vietnam is well-positioned to capitalize on the global supply chain shift, driven by the growing demand for sustainable and responsible production. Many manufacturers are adopting eco-friendly practices and securing certifications such as GOTS, OEKO-TEX, ISO 9001, and WRAP, opening access to premium markets and strengthening partnerships with international buyers.
Vietnam also offers diversified garment production, catering to both mass-market retailers and niche brands with services ranging from basic apparel to customized and small-batch orders. Its strategic location enables collaboration with neighboring countries, enhancing regional supply chain resilience and cost-efficiency. Additionally, Vietnam benefits from key free trade agreements like the CPTPP and EVFTA, providing tariff advantages and improved market access.
In the video below, we will explore in detail the opportunities within Vietnam’s garment and textile industry and explain why companies should consider investing here.
Vietnam’s Integration into Global Value Chains
Vietnam’s strong position in the textile and garment industry is the result of its successful integration into international supply chains. The country has built a comprehensive system of textile mills, garment factories, and workshops, producing both finished garments and intermediate products used across Southeast Asia.
This capability has allowed Vietnam to become a key supplier not only for ready-made garments but also for textile components.
Moreover, leading international brands such as Nike, Adidas, and Uniqlo have established major production bases in Vietnam, further proving the country’s ability to meet international standards, adapt to market trends, and deliver quality products.
>> Related article: Vietnam as a Key Player in the China Plus One Strategy
Vietnam and the China Plus One Strategy
A major factor shaping the future of Vietnam’s garment and textile industry is the growing adoption of the “China Plus One” strategy. Companies worldwide are reducing their reliance on China due to rising labor costs, trade tensions between the U.S. and China, and the need for greater supply chain flexibility. Vietnam stands out as a preferred alternative thanks to its geographical proximity to China, political stability, and manufacturing expertise.
While Vietnam still depends on China for raw materials such as fabrics and yarns, it plays a crucial role in the final stages of garment assembly and export. This cooperation allows brands to combine China’s upstream raw material supply with Vietnam’s downstream production capabilities, creating an efficient regional production network.
Challenges Facing Vietnam’s Textile and Garment Industry
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Despite these advantages, Vietnam faces several challenges that could affect its long-term competitiveness. One of the most pressing issues is the country’s dependence on imported raw materials, particularly from China. This reliance makes Vietnam’s supply chain vulnerable to disruptions and limits its control over production costs and timelines.
Meeting international sustainability and social responsibility standards is another demanding task, particularly for small and medium-sized manufacturers. While larger factories are successfully adopting sustainable practices, many smaller companies lack the financial capacity to upgrade their production methods. This constraint could limit their ability to meet the stricter requirements imposed by international buyers.
Infrastructure limitations further complicate the situation. Despite improvements in transportation networks, ports, and customs procedures, bottlenecks and inefficiencies still persist. These challenges increase logistics costs and reduce the competitiveness of Vietnamese exports, particularly as neighboring countries continue to enhance their infrastructure.
Final Thought
Vietnam has established itself as a vital hub in the global textile and garment industry. Its competitive manufacturing base, strategic location, participation in trade agreements, and role in regional production networks have made it a favored destination for international brands, especially amid the rise of the China Plus One strategy.
However, to sustain and enhance its position, Vietnam must address key challenges such as raw material dependence, rising labor costs, infrastructure gaps, and the uneven ability of manufacturers to comply with sustainability standards. By investing in supply chain improvements, sustainable production, and capacity building, Vietnam can secure its role as a key player in the global garment and textile sector for years to come.
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Source: Vietnam Insider