Vietnam’s textile exports saw an annual expansion of 5.42 per cent in 2016, the highest among apparel exporting countries. Still last year was a difficult one for Vietnam’s apparel industry. Annual apparel imports of the United States decreased 4.8 per cent and those of Japan and South Korea dropped by 1.7 per cent and four per cent.

In addition, major textile exporting countries devalued their currencies at a high rate, about ten per cent, while the Vietnamese currency depreciated by just one per cent, making the country’s garment products more expensive than those of its rivals.

Many foreign investors who invested in production in Vietnam with the hope of reaping Trans-Pacific Partnership benefits began to cut orders and move back to their factories. So the pressure to find new customers and alternative orders at Vietnamese enterprises was huge last year. The Brexit vote and the US Presidential election also had negative impacts on the country’s apparel exports.

There are shortcomings in Vietnamese garment companies. They are not proactive in search of new customers and markets. Businesses sign contracts with intermediary agents without directly contacting big customers.

More importantly, Vietnamese companies are unable to exercise any supplier power to influence the decision of buyers and are easily replaced by other suppliers.