This promotional shopping bag from Vietnam Pack Co. Ltd is made of nonwoven PP and measures 440x400x200mm.

Rapid growth in demand and heavy reliance on imported components are hampering the continued development of the sector.

The promotional gifts industry in Vietnam is facing problems in raw material availability.

Although the wooden products sector has been growing over the years, development has not been sustainable due to timber suppliers’ inability to meet burgeoning demand. The handicrafts segment, furthermore, does not have close coordination with forestry farmers and log companies.

Wood-processing plants have often depended on sourcing from abroad to supplement dwindling local availability. According to the Department of Processing and Trading Agricultural, Forestry, Seafood Products and Salt, in the first seven months alone of 2014, imports of timber had increased by 74 percent compared with the same period last year.

In general, Vietnam annually procures overseas $1.3 billion worth of hardwood. Some suppliers of this material are Laos, Cambodia, Myanmar, the US, mainland China, Malaysia, Thailand, New Zealand, Chile, Germany, France and Brazil, Cameroon, Congo, Togo, Ivory Coast, Mozambique and South Africa.

Aside from timber, some components are imported because the local ancillary industries for packaging, home decor, textiles, garments and fashion accessories are underdeveloped. Some inputs for trimming, including semiprecious stones, ribbons and fabrics, are from China. This practice pushes up quotes of domestic handicrafts by up to 20 percent.

Some buyers, particularly Japan, have high requirements for the types of chemicals used in paints and other finishes. These materials are likewise sourced abroad.

Exports

Vinh Phu Mfg and Trading Co. Ltd manufactures keychains with polyresin attachments in different food designs.

The promotional gifts industry is divided into six major lines. These are paper products, wood products, plastic products, handbags, purses, suitcases, headgear and umbrellas, textiles and garments, and ceramic and porcelain. The largest contributors to total overseas sales are textiles and garments, followed by wooden items.

In general, each category registered considerably higher foreign revenues from January to July in 2014 compared with the previous period. Textiles and garment shipments reached $11.5 billion, jumping by 20 percent. Paper products climbed by 25 percent, handbags and other fashion accessories by 38 percent, plastic models by 16 percent, ceramics by 11 percent, and wooden models by 15 percent.

The US, Japan, Taiwan, South Korea, Germany and the Netherlands are the biggest importers of items made from textiles, wood, plastic, paper, and ceramics and porcelain.

According to the Vietnam Ministry of Agriculture and Rural Development, the handicrafts sector is targeting $6.2 billion worth of exports for timber products this year. This is a 13 percent increase compared with 2013’s levels. It is forecast that shipments of textiles and apparel could rise by 12 percent to about $20 billion.

The country’s plastic industry is expecting to hit its target of 16.5 percent jump in sales. To meet this number, the Vietnam Plastic Association said that enterprises need to establish subcommittees to coordinate training and projects among companies, particularly for designing and promotionl of sustainability.

The Vietnam Leather and Footwear Association anticipates a 30 percent increase for shipments of bags and suitcases. This positive outlook is caused by some large companies moving their factories from China and taking advantage of the local supply of skilled and low-cost laborers.

Competitive advantages

Aside from availability of natural materials from across the country, the continued development of traditional handicraft villages is a strength of the industry. Some of these villages have been around for centuries and have been passing woodwork and embroidery skills from one generation to the next. This has resulted in a large pool of artisans capable of creating intricate models. These handmade, environment-friendly items are increasingly preferred over mass-produced ones from other sourcing hubs by buyers from the EU and the US.

Technology upgrades are also present for some categories, particularly garments and textiles. Large enterprises import assembly lines and embossing machines to ensure that clients’ specifications and QC standards are met.

This article is an excerpt from Vietnam Sourcing: Promotional Gifts, published by the Hinrich Foundation. For the full report with complete Industry Overview and 18 suppliers, click here.

Product gallery

The following is a selection of home and garden decor models made by Vietnam suppliers. For detailed industry and production information, and supplier outlook over the next 12 months, visit Sourcing: Promotional Gifts. For information on related industries in Vietnam and other emerging economies in Asia, go to www.developingcountrysourcing.com.

Artex Gobelins

Model: CS2
Description: Promotional throw pillow; cotton and velvet fabric; embroidered motif; 45x45cm

Artex Gobelins

Model: ST01
Description: Embroidered art; ivory fabric base and cotton thread embroidery; 26x32cm

Artex Gobelins

Model: SP
Description: Promotional eyeglass case; cotton shell, platinum-plated copper frame and cotton thread embroidery; 8x17cm;

Artex Gobelins

Model: 912
Description: Promotional jewelry box; cardboard base and velvet covering; 12x9x7cm

Bobi Craft Co. Ltd

Model: WT-011WHI-H-L
Description: Promotional stuffed toy; acrylic, cotton and polyester base, and acrylic fiber fur; white and brown

Dai An Binh Co. Ltd

Model: HB12
Price: $5
Description: Promotional pen case; maple wood; holds two pens; 20x6x3cm

DVN Group

Model: DVN 04
Price: $5.52
Description: Promotional umbrella; polyester cover; two-fold and automatic mechanism; 110x60cm

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This article and its contents are provided by the Hinrich Foundation, a partner of Global Sources in promoting trade across Asia. The products and the suppliers featured in this article are export assistance program beneficiaries of the Hinrich Foundation.