Just Style takes an in-depth look at the pros and cons of Vietnam’s apparel sector. It is described as an apparel sourcing success story but will need to build backward linkages while mitigating deep-rooted cost and labour challenges to maintain its strong position.

For Just-style.com

Data from the World Trade Organisation (WTO) shows that from the 1990s, Vietnam’s apparel sector had risen from a low base to overtake Bangladesh’s exports’ sales in 2020, with US$29bn overseas sales revenues, ranking second worldwide.

This puts Vietnam only behind China’s clothing and textile sector’s export performance – a country that has a population that is 14-times larger than that of Vietnam. A major factor cited by the WTO as working in the country’s favour is it being a one-party state. This means Vietnam is perceived as having greater political and social stability compared to its multi-party system competitors, such as Bangladesh and India. The WTO also points to the stability of Vietnam’s national currency, the dong (VND), against the US dollar. In the last six years the VND/US$ rate did not leave the 22,000:1 to 23,000:1 range. Vietnam has also benefited from the reduction in operations of many international companies in China (some China- owned) because of the US-China trade war unleashed by former US president Donald Trump, whose resulting tariffs are still largely in place.

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