Clothing manufacturing is moving from China to Vietnam
Thanks to the benefits of both the Trans-Pacific Partnership (TPP) and the EU Free Trade Agreement, Vietnam has become the world’s fourth-largest exporter of apparel, and trade is likely to develop rapidly.
Nike is a telling example. In 2010, Vietnam overtook China as the leading supplier of Nike-branded apparel, accounting for 37% of total manufacturing. China was a close second at 34%. In 2018, Vietnam had expanded to 47 percent of this market, while China had declined to only 26 percent.
Additionally, the clothing manufacturing industry in Vietnam is on track to become a key import market for China. In its 14th five-year plan, China stated that it will not focus on textile and apparel production from 2021 to 2025. Vietnam’s textile and garment exports to China grew the fastest in Q1 among the five major textile and garment export markets (the United States, Japan, South Korea, the European Union, and China). The value of textile and garment exports to China during this period was $680 million, which was equal to the number of exports to the European Union.
3 benefits of choosing clothing factories in Vietnam
Reasonable Labor Cost for Clothing Manufacturing
It comes as no surprise that one of Vietnam’s most appealing advantages to businesses is its reasonable labor costs. In 2020, Vietnam’s monthly minimum wages by regions range from $121 to $190 per month, with the highest rates in major locations such as Ho Chi Minh City and Hanoi. These earnings are often half of those in China, which range from $250 to $346.
Many Vietnamese, particularly those who are financially unstable, believe working in textile factories for minimum salaries to be a good way to make a living. Manufacturers who hire them can benefit from low expenses as well as government tax breaks. This practice can result in price reductions for units, providing investors and enterprises with a huge opportunity for high returns.
In addition, the growth of Vietnam’s minimum wage is exhibiting signs of stability. In 2019, minimum wages climbed by an average of 5.3 percent, lower than the 6.5 percent increase in 2018 and the 6.5 percent increase in 2017 (7.3 percent). Thus, Vietnam and specifically Vietnamese clothing factories can be a long-term destination for investors as well as businesses.
Political Stability to support clothing production
Vietnam is a one-party state ruled by the Communist Party of Vietnam (CPV), which sets policies and provides strategic direction. Thanks to this political model, Vietnam is one of the most politically stable countries in Southeast Asia, where some countries remain prone to political and economic turmoil. This feature has made the country a suitable location for capital investment in manufacturing, including manufacturing clothes in Vietnam.
In particular, Vietnam and the clothing manufacturing industry in Vietnam have benefited from its stable government and societal system. Compared to other Asian countries such as Thailand, widespread unrest and large-scale protests are uncommon in Vietnam, as a result of effective government control. Mr. Trong, the newly re-elected General Secretary, is recognized for his anti-corruption stance and has expressed support for Vietnam’s further integration into the global economy. These policies and events will continue to highlight Vietnam’s stable political environment, which has provided favorable conditions for enterprises.
Business-friendly environment for clothing manufacturers in Vietnam
In terms of ease of doing business, Vietnam outperforms many of its counterparts like China. In fact, the country came in at number 70 on the 20th World Bank’s rankings. Moreover, Vietnam was also one of 34 countries that improved the most from 2018 to 2019, particularly in the areas of:
- Taxes: Eliminating the requirements of a physical copy of employers’ value-added tax returns & cutting their contributions to the labor fund.
- Launching a business: Reducing the cost of starting a business and making incorporation notices available online.
- Contract enforcement: Posting online all judgments rendered in business situations at all levels.
Furthermore, throughout the previous few decades, openness and trade have been one of the pillars of the country’s economic restructuring. In 2007, Vietnam, for example, became a member of the World Trade Organization (WTO), marking a significant step toward integration with the global economy. Several international trade agreements have followed since then to offer beneficial tax and investment circumstances.
Among these agreements are the Free trade agreements (FTA) with some developed countries in the world, such as all nations in ASEAN, Australia, and South Korea. In 2019, the country signed the EU – Vietnam Free trade agreement (EVFTA), following the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018. Consequently, this has opened up a range of opportunities for international investors and clothing manufacturers in Vietnam.
To find out more about benefits of working with clothing factories in Vietnam, please access: How To Find Vietnam Clothing Manufacturer – An A-Z Guide
Thygesen Textile Company – the perfect solution for your need of clothing factories in Vietnam
Greater flexibility for your business
Without a clothing manufacturer, developing a gorgeous garment design into reality may face many limits, like lack of fabric and expertise. Not every brand has a strong network of suppliers or the necessary equipment that allows testing different kinds of fabric and producing each special detail of new designs. As a result, you will compromise the product quality and the flexibility to create garments.
As a perfect solution to this problem, Thygesen Textile Vietnam provides you with skilled & professional technical and development teams who go above and beyond to assist customers with design suggestions, appropriate materials, accessories, and product performance & aesthetic advice.
Furthermore, as one of the best clothing manufacturers in Vietnam, we have extensive garment manufacturing expertise, giving us a competitive advantage in manufacturing new and high-tech textile items. Thygesen Textile Vietnam has equipped our facility with enough sophisticated machines to handle all aspects of garment production. Having accumulated 85 years of experience in the industry, we have no difficulty meeting all of your requirements with new kinds of fabric and advanced manufacturing techniques. We keep up with the latest trends and innovations in the clothing manufacturing industry in Vietnam to always provide our customers the most up-to-date solutions. Our wide range of clients from the United States, the EU, Japan, Australia, and so on always find efficiency and satisfaction when working with us.
Make your production efficient with ODM and OEM manufacturing
ODM, generally known as a private label clothing manufacturer, stands for Original Design Manufacturer. This technique of clothes manufacturing allows Thygesen Textile Vietnam to make clothing products based on our designs and requirements while also allowing you to add your brand labels.
Before ODM manufacturing, most companies had to make orders in large quantities and at high prices. With the assistance of ODM manufacturers, you will be able to test a wide range of items on the market, making it easier to develop a viable marketing and sales strategy. This not only saves money but also reduces sales risks.
If your business excels at marketing or product distribution but lacks manufacturing expertise, ODM manufacturers’ specialized production lines will save you a lot of time. You can save the time spent on researching, designing, and testing products, as well as installing and familiarizing yourself with the machinery. Instead, your company can devote more time to research, market testing, and product distribution.
Original Equipment Manufacturing (OEM) is a more flexible, albeit more complex principle. Thygesen Textile Vietnam can make clothing based on your designs and specifications using this form of clothing manufacturing. We can label the products with your company’s logo and customize them to your specifications.
Another benefit of OEM manufacturing is the decreased factory costs as well as the elimination of some time-consuming processes and procedures. By adopting OEM, you are offloading production costs, resulting in lower output prices while maintaining premium quality and focusing on core operations.
OEM manufacturing lets your company execute various business ideas while also implementing multiple goods to boost diversity. This practice will help you to penetrate the market and reach clients more quickly and efficiently. Furthermore, OEM manufacturing services allow ordering companies to keep all of their designs’ copyright and intellectual property. As a result, you have complete control over the customization process.
High-quality products assurance
Throughout the manufacturing process, product quality and quality control at clothes manufacturing firms are probably your priorities. High-quality products are always guaranteed at Thygesen Textile Vietnam because our entire production system complies with ISO standards. Beyond that, we inspect 100 percent of the fabric before manufacturing; thereby, no unanticipated material issues arise throughout the manufacturing process. With our expertise and techniques, Thygesen Textile Vietnam optimizes not only quality but also lead time to avoid delivery delays.
Furthermore, rather than using a third-party inspection service, the manufactured clothes will be evaluated using method AQL 2.5. To achieve quality consistency, we use in-line quality control in our manufacturing process, in which our team will immediately identify and resolve a problem or issue as soon as they arise. Our customers rarely need to use a third-party inspection service after seeing how we efficiently manage the quality control system.
Please feel free to contact us to get more information on the manufacturing process and price quotation!