Vietnam Experiences a Surge in Apparel Demand!
Vietnam’s textile and apparel sector is witnessing a remarkable surge in demand. According to recent data from the Vietnam National Textile and Garment Group (Vinatex), the country’s textile and garment exports reached nearly $16 billion in the first five months of 2024, marking a 5% year-on-year growth.
Significantly, Vietnam has surpassed China to become the leading exporter of apparel to the United States, capturing the largest market share. Additionally, Vietnam is now the fastest-growing country among the top three global textile exporters. This achievement is attributed to the continuous efforts and innovations within Vietnam’s textile industry and reflects subtle shifts in the global textile supply chain.
Shifting Orders to Vietnam
Vietnam’s export performance to the U.S. market stands out, with the country now holding the top position in apparel export market share, reaching $6 billion—a 4% year-on-year increase. This shift has propelled Vietnam ahead of China, placing it at the forefront of growth among the world’s top three textile and garment exporters.
This change is not coincidental. Over the past few years, due to evolving international trade dynamics and adjustments in global consumer demand, many countries have begun shifting their orders to Vietnam. Despite challenges, such as frequent corruption issues among high-ranking officials, Vietnam has managed to attract substantial orders—especially from the U.S.—due to its cost-effective labor and flexible production models.
Vinatex notes that this growth is not primarily due to improved global consumption demand. Instead, it results from the shift of orders from other countries to Vietnam and the exchange rate advantage when the Vietnamese dong depreciated by 5% against the U.S. dollar. Despite these gains, the Vietnamese textile industry still faces several challenges, including rising production and transportation costs.
Vietnam Adapts to Boost Exports
In response to these challenges, Vietnam’s textile industry has shown remarkable resilience and adaptability. Many fiber companies are diversifying their product lines, focusing on hybrid and recycled yarns to explore new growth areas outside the traditional cotton market. Additionally, businesses are actively seeking and developing new markets to reduce dependency on traditional ones.
Vietnam’s textile sector is also increasing its investment in new technologies and product development. For instance, Vinatex has partnered with the UK-based Coats Group to produce fire-resistant fabrics. This collaboration not only represents an entry into niche product markets but also reflects an active pursuit of new technologies and markets. This strategic vision and innovation will drive the future growth of Vietnam’s textile industry.
However, the outlook for the remaining six months of the year remains uncertain. Demand in Vietnam’s key textile and garment markets may not improve as expected, and competing countries could see their currencies devalue by 15-20%. With rising production costs, Vietnamese companies will face price competition pressures. Increased transportation costs, wages, electricity rates, and bank interest rates are expected to continue, directly impacting the operational performance of enterprises.
Despite these challenges, the Vietnamese textile industry remains optimistic. Vinatex CEO, Mr. Cao Huu Hieu, expressed confidence that the outlook for 2024 is brighter than 2023. He believes that driven by market forces, Vietnam’s textile industry will continue its robust growth trajectory and gain an even more prominent position in the global textile industry.
Conclusion
Vietnam’s rise in the global textile and apparel market highlights the country’s strength and innovative spirit, injecting new vitality into the global textile industry. For China’s textile industry, Vietnam’s ascent serves as a motivation to continue advancing, embrace the challenge, and contribute to the global textile sector’s growth. By adopting an open mindset, focusing on high-quality, high-tech products, and enhancing competitiveness, China will continue to drive the prosperity and development of the global textile industry.
