VIETNAM GARMENT FACTORY
For many years, garment manufacturing plays an important roles in Vietnam’s export values. As one of the leading knitted fabric & garment manufacturer in the North of Vietnam, We deeply understand both advantages and disadvantages of a typical Vietnam garment factory.
– Large labor force at low cost
The majority of population of Vietnam lives in countrysides where garment manufacturing is the most popular industry. They are a really good craftsmanship labor force. In poor countrysides, people live very poor lives. Their income totally depend on their harvest which are very low in value and unstable. They are very willing to work as a garment manufacturing worker at very low wage. In fact, about 2.5 millions Vietnamese people are working in this industry. The majority of that are experienced labors. Compared to Chinese, Vietnamese labor cost in garment industry is relatively lower. That’s why a lot of garment factories have moved from China to Vietnam recently. Textile and garment manufacturing can be considered as a traditional industry of Vietnam which is so familiar with almost population there. It implies that the expense and effort of training to have a good labor force for this industry in Vietnam. Recent years, fabric & garment manufacturing industry has account for about 20% of GDP of Vietnam. Aiming to build up an export-oriented economy, The government of Vietnam at the same time invested in developed high quality and skillful labor force for this industry. In practices, technicians university graduates in Vietnam are qualified enough to deal with every technical requirement in this industry. Therefore, it can be seen that labor force is actually an advantage of any Vietnam garment factory.
– Government incentives
As mentioned above, the Government of Vietnam are trying its best to support the garment manufacturers. Manufacturers who locate their factories in poor areas and create jobs for local residents will receive big tax incentives and favorable conditions like tax exemption, tax reduction, or tax payment extension…In addition, local administrators help enterprises connect with organizations and association who can help them to promote their business. The administrative procedures are also simplified thoroughly to save enterprises’ time and effort. There is no obstacle but encouragement to become a Vietnam garment factory in both iconomic and administrative perspectives. The Government is trying their best to reduce corruption. With the development of social media in Vietnam, Any negative can be revealed. Administration are positively acting not only as a regulatory authorities but also as a public service in term of creating favorable conditions to every enterprises. In this new socio-economic context, private sector plays a fundamental roles in the country’s development. The Government of Vietnam also orient to prioritize private sector with the most favorable conditions. It can be say that locating a garment factory in Vietnam has never been benefited like it at this time. That’s also how small and medium Vietnam garment factory compete well with manufacturers from other countries.
– Beneficial FTAs
Vietnam now has important Free Trade Agreements and Strategic Partnership Agreement with almost main garment markets like USA, EU, Japan, Korea, Australia… Garment products, which are of Vietnam origin will enjoy benefit from low or even zero importing tariff while it’s normally about 10-20%. An other advantage Vietnam garment factories will have is that Vietnam is a member of ASEAN economic community – ACE which has signed FTAs with Australia, New Zealand, Korea, China so that garments made of ASEAN orgin materials can be treated with importing tax incentives as if they are of Vietnam origin. Thailand has developed a strong industry of manufacturing high quality fabric and accessories especially they are able to supply for even small order. This is also a big help for Vietnam garment factories in term of importing tariff.
Not only reduce tariff barriers, FTAs reduce also non-tariff barriers. Vietnam garment factories gain a big opportunity to access into new bigger markets. FTAs also create a strong media effect as customers from member countries will also gain benefits from those FTAs. Therefore, FTAs also bring more customers from potential markets to Vietnam. Vietnam garment factories have an opportunity to stabilize their productions and develop as well as challenge themselves with new obstacle especially higher requirement from their new customers.
– Logsitics system
Transportation infrastructure in Vietnam for garment manufacturing in dustry are quite developed. Almost of basic logistics services from sea transportation, internal transportation, customer clearance, warehouses…are available here in Vietnam. From logistics perspective, there is no limitation for materials from other country to come to Vietnam and cargo from Vietnam go to other markets. International express shipping service is also available here. In garment manufacturing industry, sample development is very important. Garment samples should be transferred across countries in the fastest way. International express shipping service is essential in this case. Information logistics is also an advantage of Vietnam as internet are also very popular here.
Compared to other countries, Vietnam are considered as trustworthy partners in international trade relationship. Vietnam company are also trustworthy partners in international business relationship too. They bet their reputation on their customer’s trust. Vietnam is a very stable country. There is no risk of politics, law, wars.. or any similar risk. Vietnam laws are also quite friendly with international trade law and business law. There not too much difference or conflicts between Vietnam laws and international trade law. The Government do not protect companies who have intend of cheating their foreign customers so that those kinds of risk are not much. Many of Vietnam garment factory in Vietnam are perfect themselves to meet well with international quality and manufacturing standards. They know that they need to build their reputation and gain their customers’ trust right from their capacity.
Don not have huge capacity but Vietnam garment companies know how to perfect their capability to be able to meet well with customer’s requirement. Almost Vietnam garment factories are small and medium manufacturers. However, it doesn’t mean that they can’t not carry out big order or provide an ONE-STOP-SHOP service for manufacturing garment products. Many Vietnam garment factories do not pursuing the business model of economy of scale. They focus on their services instead. Firstly, they can serve customers with small order quantities. Nowadays, the boom of e-commerce bring small business another big opportunity. E-commerce platforms help seller and buyer across the globe connect with each other. A clothing shop in EU do not need to buy from a local wholesaler at high price and then retails for very small margins, They now can directly contact to a manufacturer in Vietnam to ask for service supplied. The point is that, those kind of customers usually do not have a big order quantity. Big manufacturers ignore those order while many factories in Vietnam are willing to help. In this case, Vietnam garment factory has a better suitable manufacturing capacity. Secondly, garment factories in Vietnam build very close-knit cooperating relationship together to have stronger manufacturing capacity. Not many garment factories in Vietnam have printing or embroidery systems of machines in their house. They choose to cooperate with a professional printing or embroidery service supplier instead to save their capacity from expensive investment.
Designing is a big disadvantage of Vietnam garment factory. For many years, garment manufacturing industry in Vietnam focuses on outsourcing orders or CM or CMPT services. Designing stage was not included in Vietnam garment factories’ service. Among so many reasons which lead to that practice, the lack of talented designers are the main one. There is neither professional education or training academy nor business environment for garment designing. The lack of professional garment designer in Vietnam is also understandable.
Vietnam garment factories don’t have good international business and marketing knowledge as well as experience. This is also a typical weak point of Vietnam enterprises. Not many Vietnam garment factory develop their own collection, promote and distribute for their own brand. Therefore, almost of them do not really have demand of designing. Or almost of them don’t want to pursuing such risky project. They are too busy with outsourcing orders.
However, it’s not absolutely that there is not any Vietnam garment factory as in-house designers. ONE-STOP-SHOP service suppliers often have talented designer. They are able to help their customer bring raw idea of garment product to life in a very delighted look while their design are still be very friendly with industrial manufacturing environment. They are also have a solid knowledge and experience about materials. They know exactly which is the best kind of material for a specific designs with desired properties.
As mentioned above, marketing is a Achilles’s heel of Vietnam garment factories. They are mainly focused on a very narrow stage of global value chain – CM or CMPT or FOB. Most of them do not have enough capability to carry out full professional marketing campaigns for their own branded products. There fore, the knowledge about market and consumers are very limited and, of course, they don’t have their potential distribution channel for those products too.
– Customer service
How good a customer service is depends a lot on its supplier capability and orientation. This is also a Vietnam garment companies’s weakness. Almost Vietnam garment factory do not invest in a professional sales team who has both technical knowledge of garment industry and business experience as well as necessary skills. In Vietnam, there are a lot of garment factory do not know anything about the foreign market. They even do not work directly with foreign customers. Fortunately, e-commerce has re-defined how the world implement marketing campaigns. This’s a rare opportunity for Vietnam garment factories to take off.
The lack of knowledge about international trade makes Vietnam garment factory do not really good at sourcing for input materials.
People may argue that it’s not too hard nowadays to find a good suppliers for any kind of material. Yes. They are right. But many of Vietnam garment factories do not want to risk their finance in input materials. Both 2 those reasons make Vietnam garment factories not really good at sourcing. That makes them find difficult in providing their customers a full-package garment manufacturing service.
– Certificate of Origin
The majority of materials used by a typical Vietnam garment factory is of China origin while additional value created by their outsourcing service is relatively low. Consequently, lots of Vietnam garment factories are struggling with the localization of their supplies in order to benefit from FTAs. However, supporting industry is developing quite fast in Vietnam opening a bright future for garment manufacturing industry.
– The fail of TPP
The fail of TPP was a fail of big opportunity of Vietnam garment industry. If TPP had been was passed by American Congress, any Vietnam garment factory would have had a chance to exploit the biggest market under the most favorable condition which main competitors of Vietnam garment factories do not have.
THYGESEN TEXTILE VIETNAM – RELIABLE VIETNAM GARMENT FACTORY PROVIDING OEM, ONE-STOP-SHOP SERVICE
Among so many of Vietnam garment factory, Thygesen Textile Vietnam is considered as a leading knitted fabric and garment manufacturer in the North of Vietnam. Started in Denmark in 1931 and place its first factory in Vietnam in 2004, Thygesen Textile Vietnam is now the best investment from Denmark into Vietnam. We are now providing ONE-STOP-SHOP for manufacturing almost kind of high functional knitted garment from Activewear, Workwear to Kidswear, Underwear, Hospitalwear, casual fashion and bandage.
Thygesen own a modern factory located in Phu Tho province where an abundant labor force are available at very low cost. Being the first investor in that area and creating many new jobs, we benefit a lot from tax incentives and favorable conditions.
We focus on training our labor very well to master all modest machines equipped in a LEAN system in our factory as well as to be experts in garment techniques. We do every thing to assure that all of our garment products must be produced in highest level of quality.
We make all of our quality controlling system as well as materials & completed product test comply to international standards like OEKO-TEX, ISO… We inspect 100% of materials before manufacturing and have in-line Q/C to prevent every technical issue from arising.
We built up professional teams for each stage of manufacturing from Marketing, sales, designers & sample developer, technicians, sourcing, merchandiser, logistics… For decades working with so many customers across the globe, we are confident to be capable and experienced enough to provide a flexible and adaptive one-stop-shop service which can meet well with all of customers requirement.
Backed with a close-knit relationship with a broad network of material suppliers and sub-contractors, Thygesen Textile Vietnam is totally free in helping its customers developing new kind of materials and samples as well as deal with special requirement.
Our vision is satisfying our customers with best quality products and supportive service at the most reasonable cost and shortest lead-time.