What contributes to Vietnam’s continued strong apparel export growth?

While many apparel exporting countries are struggling with the export performance, Vietnam is different. Strong growth is recorded for Vietnam’s textile and clothing industry in the last couple of years.

The first eight months of 2017 saw strong growth of Vietnam’s main exports. Exports of phones and components were up 14.8 per cent, garments were up 7.2 per cent, footwear up 13 per cent, seafood up 19.2 per cent, wood and wooden products up 10.6 per cent and vegetables and fruits up 48 per cent.

During the same time, Bangladesh recorded slowest growth in 15 years in 2016/2017. Bangladesh’s exports in the fiscal year ended in June rose nearly 1.7 percent from a year earlier while pivotal garment sales posted only 0.2 percent growth.

Between 2016 and 2020, production is forecast to rise by an average of 12-14% per annum. Exports are expected to rise by 15% per annum and, as a result, they are set to reach US$50 billion by 2020 — up from US$28 billion in 2016.

Rapid growth from new markets :

General Director of the Vietnam Textile and Garment Group (Vinatex) Le Tien Truong reportedly said that the country’s good results last quarter was due to rapid growth from new markets.

Statistics show that exports to Eurasian Economic Union (EAEU) grew 115 per cent and the Asian Economic Community (AEC) saw growth of 17 per cent.

The industry earned $6.75 billion from exports in the first quarter of this year, up 12.4 per cent from the same quarter last year.  Data showed that although there were many challenges in key export markets, including low growth rates of exports to the European Union and the United States of 6.3-6.4 per cent, traditional markets such as South Korea, Brazil and India maintained high growth 14-34 per cent. It is worth mentioning that, the export of Vietnam’s garment strong growth in new markets, not the traditional market of Vietnam. Specifically, exports of textiles and garments to the ASEAN market increased 44.4% over the same period last year. Cambodia is a leader in imports of textiles and garments in Vietnam in ASEAN, with a turnover increase of 103% over the same period of 2012. In addition, the textile exports of Vietnam in a number of other markets strong growth increased 134.6% to Norway, to New Zealand increased by 120%, increased 37% to Australia.

New products

Le Tien said that there was good growth in exports of new products like swimsuits and raincoats at 29 per cent and 41 per cent respectively.

Political stability and skilled workers

In addition to the advantages of political stability, labor costs are still lower than in competing countries like China, Indonesia, India, Vietnam’s partners can meet the the diversity of kinds of garments and implementation of social responsibility to employees guaranteed. This is one of the attractive factors importers because they can be found or ordered so many kinds of products. Furthermore Vietnam enterprises always comply with the standards of international clients posing as labor, production environment, social responsibility … The non-governmental organizations and large customers of textile Vietnam will evaluate Vietnam as an example of the textile industry healthy, associated with labor law clear and equitable salary. Program director of the Better Work project in Vietnam under the International Labour Organization (ILO), said: “Vietnam is determined to compete long-term path is next to the supply of low cost labor services is increasing strengthen and improve the legal system. In the past decade, the working conditions in the factories has improved, and workers are respected. These companies are always happy to retain employees and workers are to enjoy the benefits as well as professional training, housing and free meals.

 

 

 

 

 

 

 

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