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Outsourcing orders shifting to Vietnam

There is a growing trend of orders shifting from China and Bangladesh to Vietnam.Multinational groups have realized that outsourcing in China is no more the optimal solution. Production costs in Vietnam are obviously lower than in China. A Vietnamese worker earns half of what a Chinese worker earns.

Brands have been scaling down production in China while expanding in Vietnam. The largest technology groups of the world have also poured billions of dollars into their production bases in Vietnam, though they also have large scale factories in China.

The percentage of Japanese enterprises in China planning to scale up production in China dropped from 73 per cent in 2010 to 57 per cent in 2013. Meanwhile, the figure increased from 27 per cent to 30 per cent in Vietnam.

From humble beginnings since the reunification of its northern and southern regions, Vietnam has become a strong player in the global textile market. State-owned enterprises make up just 0.5 per cent of Vietnam's businesses; however, 75 per cent are joint stock or limited companies.

Vietnam has advantages: only small investment capital required; a quick payback period because of short capital turnover; and lots of preferential policies from the state.





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