VIETNAM
UNDERSTANDING THE APPAREL AND TEXTILE INDUSTRY BY: MAGGIE FORD
THE SOCIALIST REPUBLIC OF VIETNAM
LOCATION: SOUTHEASTERN ASIA, BORDERING THE GULF OF THAILAND, GULF OF TONKIN, AND SOUTH CHINA SEA, AS WELL AS CHINA, LAOS, AND CAMBODIA CAPITOL: HANOI SIZE: 331,210 KM, THREE TIMES THE SIZE OF TENNESEE, SLIGHTLY LARGER THAN NEW MEXICO POPULATION: 94,348,835 PEOPLE
COUNTRY OVERVIEW VIETNAM, A ONE-PARTY COMMUNIST STATE, HAS ONE OF SOUTH-EAST ASIA’S FASTEST-GROWING ECONOMIES AND IS SET ON BECOMING A DEVELOPED NATION BY 2020. IT BECAME A UNIFIED COUNTRY ONCE MORE IN 1975 WHEN THE ARMED FORCES OF THE COMMUNIST NORTH SEIZED THE SOUTH. THIS FOLLOWED THREE DECADES OF BITTER WARS, BUT NOW VIETNAM IS BEGINNING TO BUILD BACK UP AGAIN.
IMPORTS $150.4 BILLION A YEAR
COUNTRY TRAITS GOVERNMENT:COMMUNIST STATE CHIEF OF STATE: PRESIDENT TRAN DAI QUANG HEAD OF GOVERNMENT: PRIME MINISTER NGUYEN XUAN PHUC LANGUAGE: VIETNAMESE (OFFICIAL), ENGLISH (INCREASINGLY FAVORED AS A SECOND LANGUAGE) RELIGION:BUDDHIST 9.3%, CATHOLIC 6.7%, HOA HAO 1.5%, CAO DAI 1.1%, PROTESTANT 0.5%, MUSLIM 0.1%, NONE 80.8%
APPAREL INDUSTRY MATERIELS MACHINERY AND EQUIPMENT PETROLEUM PRODUCTS STEEL PRODUCTS AUTOMOBILES ELECTRONICS PLASTICS
ETHNIC COMPOSITION: KINH (VIET) 85.7%, TAY 1.9%, THAI 1.8%, MUONG 1.5%, KHMER 1.5%, MONG 1.2%, NUNG 1.1%, OTHERS 5.3% TOTAL POPULATION THAT HAVE RECIEVED EDUCATION: 94.5% MALE: 96.3% FEMALE: 92.8% EDUCATION EXPENDITURES: 6.3% OF GDP GENDER BREAKDOWN: 0-14 YEARS: 24.1% (MALE 11,948,130/FEMALE 10,786,381) 15-24 YEARS: 17.22% (MALE 8,411,108/FEMALE 7,833,327) 25-54 YEARS: 45.05% (MALE 21,358,647/FEMALE 21,145,416) 55-64 YEARS: 7.81% (MALE 3,376,706/FEMALE 3,995,035) 65 YEARS AND OVER: 5.82% (MALE 2,115,057/FEMALE 3,379,028) MEDIAN AGE: 29.6 YEARS MALE: 28.5 YEARS FEMALE: 30.7 YEARS CURRENCY: DONG NATIONAL HOLIDAYS: NEW YEARS DAY, 1 JANUARY TET EVE, 6 & 7 FEBRUARY TET NGUYEN DAN, 8 FEBRUARY KINGS COMMEMORATION DAY, 28 APRIL INTERNATIONAL LABOR DAY, 1 MAY INDEPENDENCE DAY, 2 SEPTEMBER
IMPORT PARTNERS: CHINA 30.4% SOUTH KOREA 15% JAPAN 8.9% THAILAND 4.9% SINGAPORE 4.7% US 4.4%
EXPORTS $158.7 BILLION A YEAR WOODEN PRODUCTS ELECTRONICS MACHINERY CRUDE OIL SEAFOOD CLOTHES COFFEE SHOES RICE
EXPORT PARTNERS: US 20% CHINA 10.4% JAPAN 10.3% SOUTH KOREA 5%
APPAREL AND TEXTILES HIGHEST EXPORTS: ACTIVE WEAR WOVEN KNITS COTTON YARN FABRIC
ECONOMIC OVERVIEW INDUSTRIAL PRODUCTION GROWTH RATE: 7.5% LABOR FORCE: 54.93 MILLION LABOR FORCE: AGRICULTURE: 48% INDUSTRY: 21% SERVICES: 31% UNEMPLOYMENT RATE: 3% BUDGET REVENUES: $39.61 BILLION BUDGET EXPENDITURES: $47.39 BILLION BUDGET DEFICIT: -3.9% OF GDP INFLATION RATE: 0.9% (2015 EST.) 4.1% (2014 EST.) CURRENCY EXCHANGE RATE: DONG (VND) PER US DOLLAR -21,928
VIETNAM GDP GROWTH RATE
VIETNAM IS A DEVELOPMENT SUCCESS STORY. POLITICAL AND ECONOMIC REFORMS LAUNCHED IN 1986 HAVE TRANSFORMED THE COUNTRY FROM ONE OF THE POOREST IN THE WORLD, WITH PER CAPITA INCOME AROUND $100 USD, TO LOWER MIDDLE INCOME STATUS WITHIN A QUARTER OF A CENTURY WITH PER CAPITA INCOME OF AROUND $2,100 USD BY THE END OF 2015. VIETNAM’S PER CAPITA GDP GROWTH SINCE 1990 HAS BEEN AMONG THE FASTEST GROWING IN THE WORLD, AVERAGING 6.4 PERCENT PER YEAR IN THE 2000S. VIETNAM’S ECONOMY CONTINUED TO STRENGTHEN IN 2015, WITH A GDP GROWTH RATE OF 6.7 PERCENT FOR THE WHOLE YEAR. VIETNAM’S SOCIO-ECONOMIC DEVELOPMENT STRATEGY (SEDS) 2011-2020 BRINGS LIGHT TO STRUCTURAL REFORMS, ENVIRONMENTAL SUSTAINABILITY, SOCIAL EQUITY, AND EMERGING ISSUES OF MACROECONOMIC STABILITY. THREE BREAKTHROUGH AREAS TO STRIVE FOR: PROMOTING HUMAN RESOURCES IMPROVING MARKET INSTITUTIONS INFRASTRUCTURE DEVELOPMENT OVER THE LAST FEW DECADES, VIETNAM HAS MADE REMARKABLE PROGRESS IN REDUCING POVERTY AND HAS BECOME A LOWER-MIDDLE INCOME COUNTRY. NOT ONLY ARE INCOMES HIGHER, BUT THE VIETNAMESE POPULATION IS BETTER EDUCATED AND HAS A HIGHER LIFE EXPECTANCY THAN MOST COUNTRIES WITH A SIMILAR PER CAPITA INCOME.
FACTORS TO CONSIDER MINIMUM WAGE IN APPAREL INDUSTRY: $107 USD PER MONTH, SAID TO HELP WORKERS COVER 80 PERCENT OF BASIC DEMANDS UNEMPLOYMENT RATE: 3% FREE TRADE AGREEMENTS & TRADE BARRIERS: EU-VIETNAM FTA, TRANS PACIFIC PARTNERSHIP, WORLD TRADE ORGANIZATION, BILATERAL TRADE AGREEMENT INDUSTRIAL PRODUCTION GROWTH RATE: 7.5% LABOR FORCE: 54.93 MILLION
SOCIOECONOMIC STABILITY FACTORS
VIETNAM & ITS RELATIONSHIP TO THE US AND OTHER COUNTRIES THE GOVERNMENTS OF US AND VIETNAM SIGNED A STATEMENT AIMED AT STRENGTHENING BILATERAL DEFENSE TIES BETWEEN THE TWO COUNTRIES. THIS WILL HELP IN ESTABLISHING STRONG MILITARY RELATIONS BETWEEN THE TWO NATIONS BY INITIATING CO-PRODUCTION OF MILITARY EQUIPMENT. VIETNAM HAS REACHED OUT TO THE WORLD SINCE THE EARLY 1990S AFTER DECADES OF ISOLATION. THE COUNTRY JOINED THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN) IN 1995—A HISTORIC MOMENT FOR THE NATION. IN 2004, THE FIFTH ASIA- EUROPE MEETING OF WORLD LEADERS WAS HELD IN HANOI. VIETNAM HOSTED THE ASIA PACIFIC ECONOMIC CO-OPERATION SUMMIT IN NOVEMBER 2006, AND JOINED THE WORLD TRADE ORGANIZATION IN JANUARY 2007. THE COUNTRY BECAME A MEMBER OF THE UN SECURITY COUNCIL IN JANUARY 2008. VIETNAM’S RELATIONS WITH ITS LARGEST NEIGHBOR, CHINA, ARE INTRICATE. THE SIGNING OF THE TRANS-PACIFIC PARTNERSHIP (TPP) FREE TRADE AGREEMENT IS LIKELY TO STRENGTHEN THE ECONOMIC RELATIONSHIP BETWEEN THE TWO COUNTRIES.
ISSUES OF SOCIAL UNREST CAMBODIA ACCUSES VIETNAM OF A WIDE VARIETY OF ILLICIT CROSS-BORDER ACTIVITIES AN ESTIMATED 300,000 VIETNAMESE REFUGEES RESIDE IN CHINA ESTABLISHMENT OF A MARITIME BOUNDARY WITH CAMBODIA IS HAMPERED BY UNRESOLVED DISPUTE OVER THE SOVEREIGNTY OF OFFSHORE ISLANDS VIETNAM CONTINUES TO EXPAND CONSTRUCTION OF FACILITIES IN THE SPRATLY ISLANDS VIETNAM’S STATELESS ETHNIC CHINESE MINOR PRODUCER OF OPIUM POPPY PROBABLE MINOR TRANSIT POINT FOR SOUTHEAST ASIAN HEROIN GOVERNMENT CONTINUES TO FACE DOMESTIC OPIUM/HEROIN/METHAMPHETAMINE ADDICTION PROBLEMS ENFORCES THE DEATH PENALTY FOR DRUG TRAFFICKING
POLITICAL STABILITY FACTORS
STATE OF US RELATIONSHIP THE ECONOMIC TIES BETWEEN THE TWO NATIONS WILL BE STRENGTHENED IF THE PROPOSED TRANS-PACIFIC PARTNERSHIP, A FREE TRADE DEAL BETWEEN PACIFIC RIM COUNTRIES, IS SIGNED AND FINALIZED. INCREASING STRAINED RELATIONS WITH CHINA ARE PUSHING VIETNAM TO PURSUE STRONGER RELATIONS WITH THE US AND AGREEMENTS LIKE THESE CONSOLIDATE SECURITY PROSPECTS FOR VIETNAM. THE ONLY SOURCE OF BILATERAL TENSION BETWEEN THEM IS LIKELY TO BE THE US’S CONCERNS OVER THE STATUS OF HUMAN RIGHTS AND RELIGIOUS FREEDOM IN VIETNAM.
FUTURE GOVERNMENT PLANS THE RULING COMMUNIST PARTY OF VIETNAM HAS NOT RECENTLY FACED ANY SERIOUS THREATS TO ITS POWER, AND THIS SITUATION IS EXPECTED TO REMAIN THE SAME OVER THE COMING YEARS. OVER THE YEARS, THE COMMUNIST PARTY HAS FORMULATED POLICIES AND MADE DECISIONS FOR THE WELL-BEING OF THE ECONOMY. APART FROM INTERNAL POWER STRUGGLES, THE LEADERSHIP IS LIKELY TO FACE CHALLENGES OVER ISSUES SUCH AS LAND DISPUTES AND TERRITORIAL DISPUTES WITH CHINA. BECAUSE OF THIS THE COUNTRY’S ROCKY ECONOMIC PERFORMANCE IS LIKELY TO UNDERMINE THE PARTY’S SUPPORT, WHICH MAY LEAD TO MORE DEMAND FOR OPEN ELECTIONS AND MULTI-PARTY DEMOCRACY.
STEEP SOCIAL TECHNOLOGICAL ECONOMIC ENVIRONMENTAL POLITICAL
SOCIAL
LITERACY: 94% MEDIAN AGE: 29 LANGUAGE: VIETNAMESE HUMAN DEVELOPMENT INDEX 121 OF 187 MEDIUM DEVELOPMENT CATEGORY LIFE EXPECTANCY: 72 YEARS OF AGE TIME ZONE: 11 HOURS
TECHNOLOGICAL
INTERNET USERS: 36,140,967 AVE INTERNET HOURS: 4 HOURS PER DAY CELL PHONE USERS: 136.1 MILLION SMARTPHONE USAGE: 20% OF POPULATION MOBILE BUYING: 60% OF SMARTPHONES E-COMMERCE MARKET: $450 MILLION
SOCIAL OUTCOMES HAVE IMPROVED DRAMATICALLY ACROSS THE BOARD. CONFUCIANISM HAS STRONGLY INFLUENCED THE VIETNAMESE VIEWPOINT OF SCOIAL VALUES, AND EDUCATION. THE IMPORTANCE OF EDUCATION AND REVVERENCE TOWARDS ANCESTORS IS REGARDED HIGHLY IN THE VIETNAMESE CULTURE.
NEW STRATEGIES AIM TO INCREASE THE IMPACT OF SCIENCE AND TECHNOLOGY TO THE ECONOMY BY 2020. THIS WILL INCREASE THE VALUE OF HI-TECH PRODUCTS TO AROUND 45% BY 2020. WITH INCREASING GLOBALIZATION, THE DEVELOPMENT OF SCIENCE AND TECHNOLOGY INVOLVES INTERNATIONAL CO-OPERATION.
ECONOMIC
UNEMPLOYMENT: 6% GROWTH PER CAPITA: $6,100 GDP GROWTH RATE: 6.5 % GDP: $551.3 BILLION GROSS NATIONAL SAVINGS: 24.6% OF GDP IMPORTS OF GOODS AND SERVICES: -85.6 EXPORTS OF GOODS AND SERVICES: -86.8
ENVIRONMENTAL
DROUGHTS DURING DRY SEASON OVER FARMING CAUSING SOIL DEPLETION PRODUCTION CAUSING POLLUTION LANDSLIDES DURING MONSOONS EROSION OF RIVERS AND COASTLINES PROTECTION OF ENDANGERED ANIMALS
POLITICAL
GOVERNMENT: COMMUNIST STATE PRESIDENT: TRAN DAI QUANG PRIME MINISTER: NGUYEN XUAN PHUC EDUCATION EXPENDITURES: 6.3% OF GDP US GOVERNMENT: JOINT VISION STATEMENT STATELSS PERSONS: 11,000 ELECTIONS: NATIONAL ASSEMBLY
VIETNAMESE ECONOMY GREW AT 6% IN 2014 BECAUSE OF STRONGLY GROWING FOREIGN DIRECT INVESTMENTS IN THE COUNTRY. THE IMMINENT RISK THAT THE GOVERNMENT FACES IS OF ITS INABILITY TO MEET ITS REVENUE TARGETS. WITH THIS BEING SAID, VIETNAM IS A RAPIDLY RISING POWER DUE TO ITS CONTINUED GDP INCREASES.
VIETNAM IS WORKING TO PRODUCE LESS OF AN ENVIRONMENTAL FOOTPRINT, BUT INCREASES OF PRODUCATION IN THE RECENT YEARS, HAS RELEASED AN INCREASED AMOUNT OF CARBON DIOXIDE AND CARBON FUEL USAGE. IN TURN THIS HAS A NEGATIVE EFFECT ON BIODIVERSITY, CLIMATE CHANGE, ENDANGERED SPECIES, AND OZONE PROTECTION.
VIETNAM HAS BOOSTED ITS INTERNATIONAL ECONOMIC INTEGRATION AS IT ENTERS INTO MORE FREE TRADE AGREEMENTS WITH THE EURASIAN ECONOMIC UNION, THE EUROPEAN UNION, SOUTH KOREA AND THE TRANSPACIFIC PARTNERSHIP. BY STRIVING FOR ECONOMIC AND POLITICAL REFORM, THEY ARE DEVELOPING A SKILLED LABOR FORCE.
STATE OF THE APPAREL AND TEXTILE INDUSTRY
MARKET VALUE
THE VIETNAMESE APPAREL RETAIL INDUSTRY GREW BY 13.4% IN 2014 TO REACH A VALUE OF $5.6 BILLION.
MARKET VALUE FORECAST
IN 2019, THE VIETNAMESE APPAREL RETAIL INDUSTRY IS FORECAST TO HAVE A VALUE OF $9.3 BILLION, AN INCREASE OF 66.1% SINCE 2014.
CATEGORY SEGMENTATION
WOMENSWEAR IS THE LARGEST SEGMENT OF THE APPAREL RETAIL INDUSTRY IN VIETNAM, ACCOUNTING FOR 49.7% OF THE INDUSTRY’S TOTAL VALUE.
VIETNAM HAS BECOME A VERY PREVELENT PLAYER IN THE GLOBAL TEXTILE MARKET. THE TEXTILE INDUSTRY IN VIETNAM HAS BECOME THE FIFTH WORLDWIDE EXPORTER AND HAS A LABOR FORCE OF OVER 2 MILLION PEOPLE, WITH OVER 1.3 MILLION WORKING FOR THE INDUSTRY DIRECTLY. THE VIETNAMESE APPAREL RETAIL INDUSTRY HAD TOTAL REVENUES OF $5.6BN IN 2014, REPRESENTING A COMPOUND ANNUAL GROWTH RATE OF 15.6% BETWEEN 2010 AND 2014. IN 2019, THE VIETNAMESE APPAREL RETAIL INDUSTRY IS FORECAST TO HAVE A VALUE OF $9.3 BILLION, AN INCREASE OF 66.1% SINCE 2014. THE COMPOUND ANNUAL GROWTH RATE OF THE INDUSTRY IN THE PERIOD 2014–19 IS PREDICTED TO BE 10.8%.
GEOGRAPHY SEGMENTATION
APPAREL AND TEXTILE INDUSTRY STRENGTHS TO THE US MARKET
MARKET RIVALRY
ACTIVE WEAR DENIM KNIT TOPS
VIETNAM ACCOUNTS FOR 1.4% OF THE ASIAPACIFIC APPAREL RETAIL INDUSTRY VALUE.
STRONG GROWTH IN RECENT YEARS HELPS TO LESSEN THE LEVEL OF RIVALRY IN THE VIETNAMESE APPAREL RETAIL INDUSTRY.
RAYON NYLON SPANDEX
LABOR COSTS: MINIMUM WAGE IN APPAREL INDUSTRY: $107 USD PER MONTH, SAID TO HELP WORKERS COVER 80 PERCENT OF BASIC DEMANDS
THE VIETNAMESE APPAREL RETAIL INDUSTRY EXPERIENCED STRONG, DOUBLE DIGIT GROWTH OVER THE PERIOD 2010-2014. THIS TREND IS PROJECTED TO CONTINUE OVER THE FORECAST PERIOD, THROUGH TO 2019 HOWEVER, AT A SLIGHTLY SLOWER RATE.
VIETNAM HAS DEVELOPED SUPPORTIVE GOVERNMENT POLICIES, AND HAVE BEGUN TO IMPLEMENT MAJOR INFRASTRUCTURE PROJECTS AND INTRODUCED INCENTIVES FOR FOREIGN PRODUCERS. THE MAIN GOAL TO ATTRACT FOREIGN DIRECT INVESTMENT.
ABOUT 70 PERCENT OF VIETNAM’S TEXTILE AND APPAREL PRODUCTION IS IMPORTED TEXTILES AND OTHER INPUTS, PREDOMINANTLY FROM CHINA. WITH THIS BEING SAID HOWEVER, INVESTMENT IN FIBER, YARN AND TEXTILE MANUFACTURING IS RISING, PARTICULARLY FOR SPINNING AND WEAVING, SO THE QUANTITY AND QUALITY OF TEXTILE PRODUCTION IS LIKELY TO INCREASE. MANY TEXTILE AND GARMENT COMPANIES IN THE REGION HAVE ALREADY BEGUN TO MOVE PRODUCTION TO VIETNAM. MAJOR U.S. RETAILERS SUCH AS SARA LEE, JC PENNEY, EXPRESS, THE GAP, MACY’S, NORDSTROM’S, MAST INDUSTRIES AND AMERICAN EAGLE SOURCE A SIZEABLE PORTION OF THEIR IMPORTS FROM VIETNAM.
TRADE AGREEMENTS IMPACTING APPAREL AND TEXTILE IMPORTS
TTP: TRANSPACIFIC PARTNERSHIP
IN OCTOBER 2015, THE TPP (TRANS-PACIFIC PARTNERSHIP) TRADE PACT WAS SIGNED AND IT COULD LEAD TO A HUGE CHANGE IN THE APPAREL CATEGORY OVER THE FORECAST PERIOD. IT MEANS VIETNAM IS GOING TO OPEN THE DOMESTIC MARKET TO OTHER NATIONS BY REMOVING BARRIERS AND REDUCE THE TAX BY 100%. AS A RESULT, MORE AND MORE INTERNATIONAL BRANDS WILL ENTER THE COUNTRY AND RESPOND TO THE HUGE DEMAND FOR EXPENSIVE BRANDS FROM VIETNAMESE CONSUMERS. CONSEQUENTLY, DOMESTIC BRANDS WILL HAVE TO COMPETE WITH MORE STRONG PLAYERS IN APPAREL FROM ALL OVER THE WORLD. MEANWHILE, THANKS TO THE TPP TRADE AGREEMENT, MANY LOCAL MANUFACTURERS CAN FOCUS ON EXPORTING TO OTHER PARTICIPATING NATIONS AND GAIN MORE PROFIT THAN IN VIETNAM. THE PARTNERSHIP IS STILL IN THE PROCESS OF BEING RATIFIED.
BTA: US AND VIETNAM BILATERAL TRADE AGREEMENT
THE BTA IS THE MOST COMPREHENSIVE TRADE AGREEMENT VIETNAM HAS SIGNED TO THIS DATE. THIS DOCUMENT INCLUDES TRADE IN GOODS, PROTECTION OF INTELLECTUAL PROPERTY RIGHTS, TRADE IN SERVICES, INVESTMENT PROTECTION, BUSINESS FACILITATION AND TRANSPARENCY. THE AGREEMENT ALOWS VIETNAM’S PRODUCTS TO HAVE MUCH LOWER TARRIFS, DROPPING THE AVERAGE FROM 40% TO 3% WHEN PRODUCTS ENTER THE UNITED STATES. THE BTA CONTAINS NO RESTRICTIONS ON VIETNAMESE CLOTHING EXPORTS TO THE UNITED STATES, BUT A SAFEGUARD PROVISION WOULD ALLOW THE US TO IMPOSE QUOTAS ON TEXTILE IMPORTS IN THE EVENT OF A SURGE OF IMPORTS.VIETNAM HAS COMMITTED TO REFORM ITS TRADE TO PROVIDE A MORE LEVEL STANCE TO US COMPANIES AD PRODUCTS IN VIETNAM.
WTO: WORLD TRADE ORGANIZATION
THE APPAREL SECTOR OF VIETNAM SEEMS TO HAVE BENEFITED FROM THE COUNTRY’S STATUS AS A WORLD TRADE ORGANIZATION (WTO) MEMBER. SINCE VIETNAM JOINED WTO IN 2007, ITS APPAREL EXPORTS HAVE INCREASED AT AN ANNUAL RATE OF 21.7%. THE WTO MEMBERSHIP HELPED SEVERAL GARMENT FIRMS TO EXPLORE NEW MARKETS AND AVAIL PREFERENCES LIKE MOST FAVOURED NATION STATUS. ALSO, IT HAS DRAWN SEVERAL OVERSEAS INVESTORS INTO THE VIETNAMESE APPAREL INDUSTRY.
COUNTRY TRANSPORTATION
SEA
VIETNAM HAS OVER 80 SEA PORTS, THAT HAVE BEEN DEVELOPED BY THE GOVERNEMENT THROUGH THE VIETNAM NATIONAL SHIPPING LINES FOR OPERATION. THE MAIN PORTS ARE HAI PHONG IN THE NORTH AND SAIGON IN THE SOUTH. THE ANNUAL RATE OF PORTS HAS INCREASED, DOUBLING OVER THE PAST 5 YEARS. DUE TO THE RAPID RISE IN TRADE VOLUME, VIETNAM MUST CONTINUE TO INCREAT ITS PORT CAPACITY TO BE ABLE TO CONTINUE AT THE GROWING RATE THAT IT IS.
AIR
THERE ARE 135 AIRPORTS AND AIRSTRIPS FOR CIVIL, MILITARY AND POLICE USE IN THE COUNTRY. A QUARTER OF VIETNAM’S TRADE BY VALUE IS SHIPPED BY AIR, AND THE INTERNATIONAL AIR TRANSPORT ASSOCIATION EXPECTS THE COUNTRY TO BE THE WORLD’S FASTEST-GROWING AIR CARGO MARKET OVER THE NEXT THREE YEARS, EXPANDING AT 6.6 PERCENT A YEAR.
HIGHWAYS AND RAILWAYS
THE PERCENTAGE OF PAVED NATIONAL ROADS IS A USEFUL INDICATOR OF THE QUALITY OF A COUNTRY’S MOST IMPORTANT ROAD NETWORK. 84 PERCENT OF VIETNAM’S NATIONAL ROADS ARE CURRENTLY PAVED UP FROM 61 PERCENT IN 1997. THE CURRENT PERCENTAGE OF PAVED NATIONAL ROADS IS REASONABLE BY REGIONAL STANDARDS.THESE ROADS, HOWEVER, ARE STILL NOT CONSIDERED THE MOST RELIABLE OPTION. THERE ARE HIGH AMOUNTS OF TRAFFIC AND CONGESTION DUE TO THE MAJORITY OF THE ROADS ONLY HAVING TWO LANES. THE RAILWAY SYSTEM CONSISTS OF 7 LINES WITH A TOTAL LENGTH OF 2,632 KM. CURRENTLY, VIETNAM DOES NOT HAVE THE CONCENTRATED FLOWS OF BULK RAW MATERIALS OR THE LONG-DISTANCES WHICH GIVE RISE TO HEAVY RAIL FREIGHT FLOWS. BECAUSE OF THIS, HOWEVER, ITS EIGHT LINES SERVE HIGH DENSITY PASSENGER CORRIDORS. THE PROCESS OF CONTINUING THE MOBILIZATION OF THESE HIGHWAY SYSTEMS AND RAILWAYS IS STILL IN PROGRESS.
KEY APPAREL MANUFACTURES HANOI TEXTILE AND GARNMENT COMPANY
MANUFACTURES: KNITS, DRESSES, POLYESTER, WOVEN MATERIALS TOP CUSTOMERS: OSHKOSH, RALPH LAUREN, NIKE CONTACT: HANOSIMEX@HN.VNN.VN +84 48621024 HAI PHONG PORT: 1 HOUR 40 MINUTES
POONG IN VINA CO., LTD
MANUFACTURES: BLOUSES, SHIRTS, KNITS, RAYON TOP CUSTOMERS: CLUB MONACO, TALBOTS, CHICO’S CONTACT: TINA@POONGIN.CO.KR +84 650 3641 597 SAIGON PORT: 32 MINUTES
MJ APPAREL CO., LTD.
MANUFACTURES:DRESSES, JACKETS, SHRUGS TOP CUSTOMERS: AMERICAN APPAREL, FOREVER 21, BEBE CONTACT: SHIP@MJAPPAREL.COM +84 61 3890 187 HO CHI MINH CITY PORT: 1 HOUR 6 MINUTES
CONDITIONS THAT AFFECT LEAD TIME OF PRODUCTION NATIONAL HOLIDAYS:
WEATHER CONCERNS:
NEW YEARS DAY, 1 JANUARY TET EVE, 6 & 7 FEBRUARY TET NGUYEN DAN, 8 FEBRUARY KINGS COMMEMORATION DAY, 28 APRIL INTERNATIONAL LABOR DAY, 1 MAY INDEPENDENCE DAY, 2 SEPTEMBER
DRY SEASON JANUARY-SEPTEMBER LOWER WATERS EFFECTING SHIPPING MONSOON SEASON OCTOBER TO DECEMBER LANDSLIDES AND CYCLONES RISING FLOOD WATERS FLASH FLOODS
VIETNAMESE EXPORTS ARE STILL ON THE RISE. IT IN PART REFLECTS THE INCREASING COMPETITIVENESS OF VIETNAM IN THE GLOBAL ECONOMY.
TOP PORTS IN VIETNAM THAT CAN SERVE INTERNATIONAL FREIGHT COMPANIES: KEY PORTS
1
SAIGON PORT 876,948 SHIPMENTS TO US
2
HO CHI MINH CITY PORT 172,677 SHIPMENTS TO US
3
HAI PHONG PORT 9,765 SHIPMENTS TO US
TOP PORTS IN VIETNAM THAT CAN SERVE INTERNATIONAL FREIGHT COMPANIES ZIM INTERNATIONAL SHIPPING COMPANY
DEPARTURE: SAIGON PORT ARRIVING: SAVANNAH, GA: $4,518, 43 DAYS LOS ANGELOS, CA: $3,254, 23 DAYS NEW YORK CITY, NEW YORK: $4,140, 48 DAYS
VIETNAM OCEAN SHIPPING COMPANY
DEPARTURE: HO CHI MINH CITY PORT ARRIVING: SAVANNAH, GA: $4,712, 41 DAYS LOS ANGELOS, CA: $3,389, 21 DAYS NEW YORK CITY, NEW YORK: $4,317, 45 DAYS
MEDERTERRAIN SHIPPING COMPANY
DEPARTURE: HAI PHONG PORT ARRIVING: SAVANNAH, GA: $2,512, 33 DAYS LOS ANGELOS, CA: $1,781, 25 DAYS NEW YORK CITY, NEW YORK: $2,605, 45 DAYS
SHIPMENTS BY YEAR OF VIETNAM
VIETNAMESE CULTURE RELATIONSHIPS ARE CRITICAL TO SUCCESSFUL BUSINESS PARTNERSHIPS. BUSINESS IS A WIN OR LOSS TO THE VIETNAMESE. VIETNAMESE COLLEAGUES MAY TRY TO GET THE BEST DEAL FOR THEIR INTERESTS, EVEN IF IT MEANS SLOWING DOWN THE DECISION MAKING PROCESS SO BE PATIENT. ALWAYS INVEST TIME IN BUILDING A GOOD RELATIONSHIP BASED ON BOTH PERSONAL AND BUSINESS LINES. OFFICIAL BUSINESS HOURS ARE GENERALLY MONDAY THROUGH FRIDAY BETWEEN 7:30 AM AND 4:30 P.M., WITH A LUNCH HOUR SOMETIME BETWEEN 12:00 A.M. AND 1:30 P.M. MANY COMPANIES, ESPECIALLY PRIVATE FIRMS WORK ON SATURDAY AS WELL.
BUSINESS ETIQUETTE IN VIETNAM APPOINTMENTS ARE REQUIRED AND SHOULD BE MADE SEVERAL WEEKS IN ADVANCE THE VIETNAMESE ARE PUNCTUAL AND EXPECT OTHERS TO BE SO TO DRESS CONSERVATIVELY HANDSHAKES ARE USED UPON MEETING AND DEPARTING HANDSHAKES ONLY USUALLY TAKE PLACE BETWEEN MEMBERS OF THE SAME SEX BUSINESS CARDS ARE EXCHANGED ON INITIAL MEETINGS AND SHOULD BE PRESENTED WITH BOTH HANDS
NEGOTIATION STYLE AND CUSTOMS FOR ANY BUSINESS TO BE AGREED UPON YOU MUST MAKE A LONG-TERM COMMITMENT TO THE COUNTRY AND VISIT IT. VIETNAMESE ARE STILL A CONSERVATIVE AND RELATION BASED SOCIETY AND CONNECTION OVER TIME AND FACE-TO-FACE MEETINGS ARE CRITICAL IN BUILDING TRUST AND ENCOURAGING SUPPORT.
WHEN RECEIVING BUSINESS CARDS ENSURE YOU SHOW PROPER RESPECT TO IT AND DO NOT SIMPLY GLANCE AT IT AND PUT IT ON THE TABLE NEVER MAKE PROMISES THAT YOU CAN NOT KEEP TO AS THIS WILL LEAD TO A LOSS OF FACE BUSINESS GIFT GIVING IS FAIRLY COMMON AT THE END OF A MEETING OR DURING A MEAL GIFTS SHOULD BE SMALL BUT NOT EXPENSIVE.
RISKS AND BENEFITS RISKS POOR LABOR STANDARDS UNDERDEVELOPED APPAREL INDUSTRY LACK OF STABLE TRADE AGREEMENT WITH WEST 50% OF RAW MATERIALS ARE IMPORTED UNSTABLE INFRASTRUCTURE PRIMARILY AGRICULTURE ORIENTED LONG TRANSPORTATION PROCESS QUALITY OF ASSEMBLY WEAK PRODUCTION MANAGEMENT
BENEFITS 2ND FASTS GROWING ECONOMY STRONG WORK ETHIC STABLE POLITICAL ENVIRONMENT LARGE LABOR FORCE US-VIETNAM BILATERAL TRADE AGREEMENT GROWING EXPORTS MARKET STABILIZATION OF DONG EXCHANGE RATE RENOVATED AND MODERNIZED EQUIPMENT LOW MANUFACTURING COSTS
VIETNAM’S TEXTILE AND APPAREL INDUSTRY IS GROWING FASTER THAN THAT OF MANY OF ITS REGIONAL COMPETITORS, AND FOREIGN COMPANIES ARE STARTING TO POUR MONEY INTO VIETNAM TO TAKE ADVANTAGE OF POTENTIAL ECONOMIC OPPORTUNITIES FROM FUTURE FREE TRADE AGREEMENTS. U.S. COMPANIES WILL HAVE THE CHANCE TO INCREASE THEIR EXPORTS OF TECHNICAL TEXTILES TO MORE CONSUMERS AND BUSINESSES IN VIETNAM. THE CLASSIFICATIONS BEST SUITED FOR PRODUCTION IN VIETNAM INCLUDES WOVEN KNITS, DENIM, AND ACTIVE WEAR. VIETNAM IS WELL KNOW FOR PRODUCING THESE GARMENTS TO SEVERAL AMERICAN COMPANIES RELYING ON THEIR ABILITY TO PRODUCE QUALITY GOODS.
REFERENCES AWARD-WINNING CULTURE GUIDES. (2016). RETRIEVED MAY 16, 2016, FROM HTTP://WWW.COMMISCEO-GLOBAL.COM/COUNTRY-GUIDES/VIETNAM-GUIDE/ CURRENT ISSUES - NATIONAL COUNCIL OF TEXTILE ORGANIZATIONS. (2016). RETRIEVED MAY 16, 2016, FROM HTTP://WWW.NCTO.ORG/POLICY-POSITIONS/ CURRENT-ISSUES EAST & SOUTHEAST ASIA : VIETNAM. (2016). RETRIEVED MAY 16, 2016, FROM HTTPS://WWW.CIA.GOV/LIBRARY/PUBLICATIONS/THE-WORLD-FACTBOOK/ GEOS/VM.HTML FREIGHT CALCULATOR. (2016). RETRIEVED MAY 16, 2016, FROM HTTP://WORLDFREIGHTRATES.COM/FREIGHT LOGIN: EURO MONITOR. (2016). RETRIEVED MAY 16, 2016, FROM HTTP://0WWW.PORTAL.EUROMONITOR.COM.LIBRARY.SCAD.EDU/PORTAL/ANALYSIS/ RELATED LOGIN: EURO MONITOR STATISTICS. (2015). RETRIEVED MAY 16, 2016, FROM HTTP://0-WWW.PORTAL.EUROMONITOR.COM.LIBRARY.SCAD.EDU/PORTAL/STATISTICS/CHANGEMEASURE STRENGTHS OF THE VIETNAM TEXTILE AND GARMENT INDUSTRY. (2016, MAY 16). RETRIEVED MAY 16, 2016, FROM HTTP://WWW.VIETRADE.GOV.VN/EN/INDEX. PHP?OPTION=COM_CONTENT&ID=1330:STRENGTHS-OF-THE-VIETNAM TEXTILE AND GARMENT. (2014, MAY 8). RETRIEVED MAY 16, 2016, FROM HTTP:// WWW.GRIPS.AC.JP/FORUM/MODULE/VIETNAM/GARMENT_EN.HTML VIETNAM OVERVIEW. (2016). RETRIEVED MAY 16, 2016, FROM HTTP://WWW. WORLDBANK.ORG/EN/COUNTRY/VIETNAM/OVERVIEW