Vietnam Country Manager
MBA in Grenoble Business School (TOP 6 French Business School)
5 year experience in Quality Control industry
Multiple languages speaking (French, English, Spanish, Mandarin)
Jun 02, 2017
Since the 90’s, Vietnam has become a strong player in the global manufacturing market, with export industries greatly participating in the country’s prosperity. Vietnam’s key consumer goods exports include textile/garment, footwear, furniture/hard goods and now electronics. Let’s have a look at the geography of suppliers for each of these 4 product categories.
Vietnamese textile and footwear industry, with over 4000 companies, is one of the leading industries for exports of the country. Vietnamese textile and apparel industry’s customers include top worldwide labels, such as Nike, Gap, C&A and H&M to name a few.
This industry even now comes second to China as the top clothing supplier of the USA with a share of over 10% of the whole US market.
Given the large number of companies related to this industry and the widespread network of suppliers, manufacturing locations are located both in North and South Vietnam. As such it would be hard to narrow down this industry to some specific locations.
The footwear industry in Vietnam dates back to the 90’s with early bird key players such as Nike, who still today produces the majority of its sneakers in the country.
This industry is currently the fourth export product category for Vietnam with $15 billion worth of exports in 2015 and with a growth of 20% in 2016. The current network of suppliers includes over 1100 factories.
This strong growth of the industry is not going to stop soon, boosted by numerous bilateral agreements and China’s increasing labor cost.
As for the locations of the footwear industry, it is mainly concentrated in 2 regions. The first region is in the north around Hanoi and the northern coast (Ha Nam, Hai Phong and Ninh Binh). The second region is in the south, around HCM City and Long An.
Thanks to free trade agreements and labor costs, Vietnam’s wood working industry is now one of the key export industries of the country.
The industry can rely on abundant wood resources (Vietnam being the largest wood exporter in Southeast Asia), low labor cost and long tradition of wooden products and art crafts.
In 2014, overseas revenue of Vietnamese wood and wooden products reached $6.20 billion.
Vietnamese wooden furniture suppliers are mainly based in the Red River Delta, Central Coast, central highland and the southeast parts of Vietnam.
Among all these clusters, the HCM City (Saigon) region is the biggest one. The north region, including Ha Noi, mainly includes wooden art objects, handicrafts and some hardwood furniture, while the central region (mainly Da Nang, the Highlands and Binh Dinh) is a hub for less formal hardwood furniture and art objects.
Vietnam’s accomplishment of becoming major electronics manufacturing center was far from being obvious. Yet today it is the leading industry and now leads the country’s total exports, even overtaking the textile industry as Vietnam’s largest export.
However, and unlike the textile and furniture industries, the network of suppliers is much more concentrated and controlled by foreign manufacturers. Samsung has for example invested over $2 billion in one single plant and produces over 240 million handsets per year. Other international electronic manufacturers include LG, Intel, Canon, Sony, etc. This predominance of multinational manufacturers greatly reduces sourcing opportunities for international buyers; in addition most electronics factories are assembling factories, importing parts from China and other countries.
Major electronics industries are located in 3 regions: Hanoi, HCM City and Haiphong.
For more information about Vietnam and V-Trust operation in Vietnam. You may have a look at our other webpage: https://www.v-trust.com/AboutUs/Vietnam.aspx