4 Good Reasons to Source from Vietnam

by Stef Calimlim (Content Editor)

Image source: Getty

Why are Products Made and Sourced in Vietnam?

It is no surprise that Vietnam is considered one of the fastest emerging economies in Asia. The country’s resilient economy, strong macro-economic foundation, flexible labor market, trade openness, and pursuit of green and sustainable development have turned Vietnam into an attractive global manufacturing base.

Whether a rookie or an established enterprise planning to work with Vietnamese manufacturers, the ability to navigate Vietnam’s supply chain is critically important for any entrant to the Vietnam market. It is crucial for businesses to understand Vietnam’s economic policies, geopolitical landscape and trade agreements for a successful entry into the country.

Reason 1. Low-cost manufacturing

Known for its competitive labor costs, businesses interested in investing in Vietnam and working with its suppliers can save as much as half the labor costs they would spend in China. Vietnam has been enjoying an influx of foreign investment in the wake of the China–US trade war and pandemic-related supply chain challenges.

Reason 2. Regional production hubs

From north to south, investment opportunities abound, making Vietnam a popular investment destination for foreign companies. Investment zones within Vietnam can integrate into supply chains that service Europe, China and the Pacific. Each destination has its specialization and unique incentive programs.

The North Key Economic Zone (NKEZ), for instance, is suitable for businesses that want to transfer their manufacturing operations to Vietnam but also keep operating in China, as this location is in close proximity to China. The NKEZ comprises Hanoi, Hai Phong, Bac Ninh, Hai Duong, Hung Yen, Vinh Phuc and Quang Ninh.

The Central Key Economic Zone focuses on developing light industry in apparel, construction materials, food processing, and paper and forest products manufacture. The CKEZ consists of Thua Thien Hue, Da Nang, Quang Nam, Quang Ngai and Binh Dinh.

The Southern Key Economic Zone, which offers a diversity of materials and human resources, is considered the backbone of industries such as rubber, plastics, and apparel. It is also a leading zone for advanced manufacturing, and the electronics, IT, telecom, software, hi-tech agriculture production, and processing sectors. The SKEZ includes Ho Chi Minh City, Binh Duong, Dong Nai, Long An, Ba Ria – Vung Tau, Binh Phuoc, Tay Ninh and Tien Giang.

Reason 3. Development-friendly trade agreements

Vietnam has a variety of trade agreements with countries such as China, the US, Canada, Chile, Mexico, South Korea, Australia, New Zealand, India, Japan, Singapore, Malaysia, Indonesia, the Philippines, and Thailand, among others. Vietnam’s participation in international free trade agreements has allowed it to export more complex high-tech goods instead of low-tech manufacturing products, guaranteed its increased economic power and financial security, and reduced its tariff rates significantly.

Reason 4. Reliable suppliers from our 2023 Vietnam Show

As economies recover and rebuild from the COVID-19 pandemic, borders and markets are opening to the world. With safety at the top of mind, Global Sources is gearing up to provide buyers, retailers and other sourcing professionals new sourcing opportunities via its upcoming 2023 Vietnam Show.

Find new Vietnam suppliers and factories to work with, network with customers and other show visitors to grow your business, source high-quality and innovative made-from-Vietnam products, look for new business ideas, learn more about the Vietnam market,  keep abreast of industry trends and trade legislations, and more when you attend the 2023 Global Sources Vietnam Show.

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