Five years ago, Vietnam was a niche sourcing destination mostly known for garments and footwear. Today it is home to Samsung's largest global smartphone manufacturing facility, Intel's largest chip assembly plant, and a rapidly expanding base of factories producing electronics, furniture, industrial components, and consumer goods.
The question is no longer whether Vietnam is a serious option. It is. The question is whether it's the right option for your specific products, volumes, and requirements — and how it compares to China in the areas that actually matter for importers.
Why Vietnam Has Grown So Fast
The shift of manufacturing investment into Vietnam has been driven by a combination of push and pull factors:
- Rising Chinese wages — labour costs in Vietnam are significantly lower than in coastal Chinese manufacturing hubs, though this gap is narrowing
- US-China trade tensions — US tariffs on Chinese goods accelerated the search for non-China production among US-focused importers, and many US buyers moved production to Vietnam specifically to access lower or zero tariff rates
- Favourable trade agreements — Vietnam has signed the EU-Vietnam Free Trade Agreement (EVFTA), providing duty reductions for many product categories entering the EU market
- Political stability and foreign investment policy — Vietnam has actively courted foreign manufacturing investment with stable policies and industrial zone infrastructure
Vietnam's Genuine Strengths
Labour cost competitiveness
Vietnam's minimum wage varies by region but is substantially lower than China's coastal manufacturing zones. For labour-intensive production — assembly, sewing, hand finishing — this translates into meaningful cost advantages on the right product categories.
Trade agreement benefits
Under the EVFTA, many goods manufactured in Vietnam enter the EU at reduced or zero tariff rates. For product categories where EU import duties from China are 6–12%, this can represent a significant landed cost advantage. Always check the specific rules of origin requirements — the product must be "sufficiently processed" in Vietnam to qualify.
Established capability in key categories
For certain product categories, Vietnam has world-class manufacturing capability developed over decades:
- Garments and textiles — deep supply chain, experienced workforce, international certifications common
- Footwear — Vietnam is the world's second-largest footwear exporter
- Furniture and wood products — strong capacity, particularly for flat-pack and solid wood furniture
- Electronics assembly — growing rapidly, particularly in the north near Hanoi where Samsung and other majors have anchored the ecosystem
- Bags and accessories — competitive quality at lower cost than Chinese equivalents
Vietnam's Limitations — Where China Still Wins
Supplier ecosystem depth
China's manufacturing ecosystem — the density of component suppliers, specialist subcontractors, tooling shops, and material suppliers within a small geographic area — is unmatched. In Vietnam, the supply chain for most product categories still relies heavily on imported Chinese components and materials. This matters for lead times, customisation flexibility, and the ability to iterate quickly.
MOQ and production flexibility
Chinese factories, particularly in the Pearl River Delta and Yangtze River Delta regions, are accustomed to Western buyers and offer relatively flexible minimum order quantities, customisation options, and sample services. Vietnamese factories tend to be oriented toward large-volume orders from major brands and may be less accommodating for smaller or first-time buyers.
Product range
China produces virtually everything. Vietnam's manufacturing strengths are concentrated in specific categories. If you need specialist industrial components, complex electronics, or products requiring advanced tooling, China remains the primary option for most buyers.
Logistics infrastructure
Vietnam's port infrastructure has improved considerably but still lags China's in terms of vessel frequency, routing options, and transit time reliability. For time-sensitive categories, this matters.
A Practical Framework: When to Source from Vietnam
Consider Vietnam as your primary source when:
- Your product is in a category where Vietnam has established capability (garments, footwear, furniture, basic electronics assembly)
- You are selling into the EU and can benefit from EVFTA duty reductions — run the landed cost comparison for your specific HS code
- Your order volumes are large enough to attract attention from major Vietnamese factories (typically from a few thousand units upward for most categories)
- Supply chain diversification away from China is a priority for your business
Stick with China when:
- Your product requires deep supply chain integration, complex components, or bespoke tooling
- You need small MOQs or rapid iteration on product development
- Your product category isn't one where Vietnam has mature manufacturing capability
Getting Started with Vietnamese Suppliers
The vetting process for Vietnamese suppliers is similar to China — verify the business registration, confirm manufacturing capability (not trading), request samples, and arrange pre-shipment inspection. English proficiency is generally good at the management level in export-oriented factories.
Unlike China, where Alibaba is a dominant discovery platform, Vietnamese factories are often found through trade fairs (Vietnam International Trade Fair, Vietnam Manufacturing Expo), industry directories, or through a sourcing agent with Vietnam relationships.
The biggest mistake importers make when switching to Vietnam is assuming it works like China. The supplier landscape, logistics, and business culture are different — plan for a longer qualification process.
If you're evaluating Vietnam for your product category and would like a comparative supplier analysis, get in touch — we source across China, Vietnam, and India and can identify the best-fit option for your requirements.
