VIETNAM - GembahGembah

Manufacturing

VIETNAM

The hot China alternative post-2018, especially for textiles

See below for why you should manufacture in Vietnam.

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CONSIDERATIONS FOR VIETNAM

WHAT TO EXPECT

IMPORTS TO USA

$67B

SURGING

GROWTH

ATTRACTIVE

CHINA-ALTERNATIVE

Textile & Apparel Hotspot

  • Footwear, knit & woven apparel, furniture, and other textiles 26% of total US imported footwear market

Cost Competitive

  • Labor rates are 54% lower than China High-skilled labor shortages –may increase labor rates

Low-Volume Order Quantities

  • Many suppliers willing to take low initial order quantities, especially for standard product types

STEP-BY-STEP RISK MITIGATION STRATEGY

HOW to Diversify Your VIETNAM-Dependency

01

VIETNAM-DEPENDENT

All of your sourcing, manufacturing and assembly is completed within Vietnam. You are paying approx. 25% import tariffs.

02

Sub-components assembled in new market

All manufacturing is completed within Vietnam and the finished components are sent to alternative country for final assembly. Possible to avoid Section 301 import tariffs.

03

High-value manufacturing in new market

Molds and specialty tooling sent to supplier in alternative country for core manufacturing. High volume and low costparts continue to be supplied from Vietnam.

04

Full transition to new market

All manufacturing and final assembly is fully transitioned to alternative market. Some sub-components or material may still be sourced from Vietnam by your suppliers.

Recommendations for your post-2020 product launch strategy

Gembah’s Predictions for 2021

Sustainable Products

  • Amazon “Climate Pledge Friendly” certification
  • 19 independent certification options
  • Increased consumer demand, increased competitiveness

US-Vietnam Trade War Tariffs

  • Slow change expected over coming years
  • Do not delay implementing a smart supply chain strategy

Pandemic Impact: Ecommerce Expansion

  • Surging Ecommerce growth in traditional brick-and-mortar retails
  • Increased opportunity
  • Increased competition