Find Manufacturers in Vietnam
The hot China alternative post-2018, especially for textiles.
What to Expect
Considerations for Vietnam
Growth & China Alternative
- Imports to USA $67 billion
- Surging growth
- An attractive alternative to China
1.
Textile & Apparel Hotspot
- Footwear, knit & woven apparel, furniture, and other textiles
- Owns 26% of the total US imported footwear market
2.
Cost Competitive
- Labor rates are 54% lower than China
- High-skilled labor shortages – may increase labor rates
3.
Low-volume Orders
- Many suppliers are willing to take low initial order quantities, especially for standard product types
Lessons Learned
Responding to Supply Chain Trends
01. Don’t go to Vietnam just for cheap labor
- Vietnam’s labor rate has increased 1000% from 2000 to 2020
- 25% cross-border import tariffs on most products
- Go to Vietnam for robust supply network and top engineering talent
02. Diversify to reduce risk
- Custom supply chain strategy solutions
- Low volume strategy vs. high volume strategy
- Newly expanding manufacturing ecosystems in alternative markets
03. Partner with a supply chain expert
- We’re ready to guide you to an optimal solution. Let’s realize your product development together
Mitigation Strategies
How To Diversify Your Vietnam-Dependency
1.
Dependency
All of your sourcing manufacturing and assembly is completed within Vietnam. You are paying appox. 25% import tariffs.
2.
High Value Manufacturing
Molds and speciality tooling sent to supplier in alternative country for core manufacturing. High volume and low cost parts continue to be supplied from Vietnam.
3.
New Market
All manufacturing is completed in Vietnam and the finshed componnts are sent to alternative country for final assembly. Possible to avoid Section 301 import tariffs.
4.
Transition
All manufacturing and final assembly is fully transitioned to alternative market. Some sub compenents or material may still be sourced from Vietnam by your suppliers.
Product Launch Strategies
Trends and Predictions
1.
Sustainable Products
- Amazon “Climate Pledge Friendly” certification
- 18 independent certfication options
- Increased consumer demand, increased competitiveness
2.
US – Vietnam Tarrifs
- Slow change expected over coming years
- Do not delay implementing a smart supply chain strateg
3.
Pandemic Impact
- Surging Ecommerce growth
- Incresead opportunity
- Incresead competition
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