Vietnam’s garment exports in the first 11 months of this year were up nearly eight per cent year-on-year. But Vietnamese textile manufacturers are seeing orders decline, with buyers moving to other, cheaper developing countries. Normally, by the end of a year, manufacturers have enough orders for the whole of the following year. But this year many do not have enough orders for 2020, with some reporting a 20 per cent drop in orders from last year.

Moreover, many have not signed long-term contracts for products, only monthly or quarterly. Many orders have shifted to emerging countries in Africa, while competition with textiles superpowers like China, India and Bangladesh is becoming increasingly fierce. Even China’s orders are being transferred to countries with preferential tariff rates such as Bangladesh and Cambodia. Not only Vietnamese textile and garment producers, but also its fiber industry is facing increasing competition from foreign businesses and rivals in countries such as India, Thailand and Indonesia.

The difficulties being faced by Vietnam’s textile industry include rising costs of raw materials from China and lower prices demanded by foreign buyers. Vietnam is losing its low labor cost edge over other countries even as its use of technology in production remains limited, leading to reduced competitiveness.