Vietnam's advantages in labor costs and vaccine coverage
The textile and garment industry is a labor-intensive industry, in which Vietnam has a young population structure, good skills and high learning ability, and the average salary of the textile industry is among the lowest in the world. Vaccine coverage in Vietnam is increasing rapidly (67% of the population gets at least 1 dose, the 19th highest in the world). Up to now, Vietnam is the only supplier with high scores on all 5 main factors among the top 27 textile and garment supplying countries.
Prospects and core operational challenges
Sustainability trends in the supply chain – the deadline for Vietnamese businesses to transform
Enterprises focus on the "green" production process in the factory and produce cotton and recycled yarns such as ADS, STK or use input materials mainly cotton and recycled yarns such as TNG, TCM, etc. … is expected to attract more orders from major partners who are interested in global issues such as H&M, Uniqlo, Nike, Adidas, etc.
It is expected that in 2023, the textile and garment market will return to the threshold before the Covid-19 epidemic
According to the Ministry of Industry and Trade, in the first 10 months of the year, the textile and garment industry recorded an export value of 32 billion USD and it is forecasted that by the end of this year, it can achieve a turnover of 38.5 billion USD.
The Ministry of Industry and Trade has set an export turnover target of 43 billion USD in 2022. Challenges: the situation of the Covid 19 epidemic, the demand for non-essential goods such as clothes is slowing down, consumers are tightening their spending...
Chance:
The EVFTA and CPTPP Agreements actively support Vietnam's textile and garment export activities. Vietnam's textile and garment market in the US, EU and US is still expanding.
The trend of shifting the world's textile and garment supply out of China and Vietnam is one of the destinations for importers and retailers.
Covid also changed some trends. That is driving demand for sports products. It also drives digitalisation across the industry with nearly 40% of all sales currently generated from digital channels.
The rising daily consumption index will bring opportunities for the textile industry: October CPI in the US reached 276 points, up 6.15%, in the EU it was 110 points, up 4.76% over the same period last year. (according to Tradingeconomics, data accessed on 11/22/2021)
The deployment of vaccines in key export markets such as the US and EU is increasing, leading to an increase in the consumption index (the rate of vaccination with at least 2 doses in the US and some countries in the EVFTA and CPTPP agreements is higher than 50%, the US 68%, Spain 82%, France 76%, Canada 66%, Japan 79%, Singapore 93%)
Real estate development – New direction
Many textile and garment enterprises are taking a new direction in implementing more real estate businesses such as TNG, VGT, GIL, ADS, etc. with industrial park and residential real estate projects being handed over or in the process license application.
