Shoes made in Vietnam are a trend, making the country the third-largest producer of footwear in the world.

Why Shoes Made in Vietnam are a trend

Vietnam is currently the third-largest footwear manufacturing country in the world, after China and India. Producing around 920M pairs annually and exporting more than 800M pairs to more than 50 markets globally. This is evidence of how important this industry is to the growing economy of this South East Asian country.

With strong competition from its neighbour, China, the Vietnamese Manufacturing base needs to continue investing in infrastructure as well as local raw material availability and accessory suppliers. Domestic footwear enterprises must strive for self-improvement, change their production models, invest in equipment and technology innovation whilst actively integrating themselves to join the global supply chain.

5 Famous Shoes Made in Vietnam

1. Nike

Vice President of Nike Group (USA) – Mr. Chris Helzer said that by 2020, Nike will celebrate the 25th anniversary of its establishment in Vietnam. Certainly, this is its most important market for production. In fact, Nike realizes up to 50% of its products in Vietnam. Nike also values the quality of Vietnam’s labour force that contributes to the success of this global sportswear brand.

2. Adidas

Adidas has halved the amount of footwear it makes in China having moved a large proportion of its shoe production to Vietnam. It is a significant shift. In fact, in 2008 roughly 30% of Adidas shoes were made in Vietnam and about 45% in China. By 2018 Vietnam had switched places with China now producing 45% of worldwide production compared with China’s 20%.

3. Puma

The PUMA village complex was inaugurated in 2009 in the South of Vietnam. It is a convergence of manufacturing, research and development all ‘under one roof‘. Currently, about 35% of Puma’s sportswear is being produced in Vietnam and Puma is increasing its production output every year.

4. Converse

Canvas shoes with rubber soles are an identity specific to Converse as a popular footwear for the young generations. By using a domestic natural rubber supplier for sole components, worldwide production of Converse shoes equates to 40% ex Vietnam.

5. Skechers

Skechers introduced a layer of memory foam to the sole of its shoes. This system provides extra cushioning, increasing the level of comfortability. This innovative process originated in Vietnam and has led to 35% of total production out of Vietnam.

Footwear in Vietnam – High quality and Convenience

Footwear is the second largest segment within the Vietnamese manufacturing sector, just behind Electrical machinery. It comprises all types of shoes with the current trend seeing a strong growth potential for sneakers. Large footwear brands have moved their production to Vietnam over the past 10 years as they have gradually shifted production out of China.

Definitely, the manufacturing sector in Asia is shifting. Vietnam currently manufactures two times more Adidas footwear than China does and Nike is increasing volumes year on year as it reduces its commitment to China. Obviously, there is the Chinese domestic market that will still mean that China manufacturing from some of these global brands retains importance.

Not only Sportswear

As well as sneakers, Made in Vietnam produces also casual footwear and, whether cemented or vulcanised soles, there is a breadth of manufacturing capability. In addition, women’s fashion shoes are being produced in Vietnam with brands such as M&S, Asos, Aldo and Next all buying from local manufacturers.

Made in Vietnam : The benefits of Vietnam Sourcing

Albeit much smaller than China, Vietnam offers a broad manufacturing sector with experience of exporting. Labour rates remain low, there is raw material availability and also a good range of product knowledge. Importantly, the Government has been investing in infrastructure of the past decade to create efficiencies with logistics and shipping. There are also some attractive duty benefits most notably with the recent ascension of the recent EVFTA (European Vietnam Free Trade Agreement).

Sustainability – innovating the shoe industry

Certainly, sustainability is a growing trend for consumer goods and the same applies to the shoe industry in Vietnam. In fact, footwear brands are picking up on recycled and eco-friendly materials. The use of recycling and biodegradable techniques as well as the concept of eco-consciousness are both becoming more widespread at manufacturing level. Often, more sustainable raw materials have a higher price point although the consumer is increasingly willing to pay this uplift (considering that the purchase decision is no longer solely about cost for a growing demographic). There are also factories in Vietnam focusing on reducing their impact on the environment and on working practices that are in line with the UN’s sustainable development goals.

Summary

Vietnam is well placed for OEM shoe manufacture and we are already working with our clients to make shoes in this fast growing sector of the Vietnamese manufacturing base.

In addition, we can help our clients with a wide range of products out of Vietnam, including Garden products, furniture, ceramics, homewares, candles and industrial products. Please contact us at vietnam@et2cint.com for more information.

EVFTA will boost Vietnam Sourcing for the EU Market.

After a decade of talks and negotiations, the European Vietnam Free Trade Agreement (EVFTA) has been ratified by the Vietnamese assembly. The trade deal will likely take effect on the 1st August 2020. Vietnam has long been seen as the ‘Workshop of the World’ with its ever-growing manufacturing sector and this trade deal should only support this expansion. It will reduce tariffs on products imported into the EU market over the course of 7 years, with some commentators pointing to 44% increase in imports.

The Current State of Vietnam Manufacturing

Even before this Pandemic, a lot of companies (particularly US-based) were looking to spread their Asian sourcing across the region. This has ensured that they were not too dependent on one market. Certainly, Vietnam sourcing was a key component of this strategy. However, the country’s manufacturing sector was at full capacity.
To a point, there have always been limitations in terms of scale and supplier networks. For the first, you just have to look at the population when compared to China; circa 90 million as a total population against 1.6 billion people. In fact, the migrant worker population within the Chinese manufacturing sector is still estimated as 300 million strong.
Secondly, Vietnam has often relied upon other markets for raw material supplies and accessories. This added to both lead time and also price.

EVFTA & The Future

This trade deal will reduce the tariffs on imports into the EU, almost all tariffs over a 7 year period. The good news is that after the deal takes effect, under the GSP regime, the EU will eliminate approximately 85% of import tariffs on Vietnamese goods. Conversely, it reduces barriers for EU businesses to invest and operate within Vietnam. This is all at a time when trade wars, protectionism are on the rise and the Pandemic has disrupted sales markets globally. Undoubtedly, this will open up the manufacturing sector to additional investment, both domestic and international, as companies look to take advantage of the available labour, rates and manufacturing opportunities.

Product categories that will benefit include:

– Footwear
– Furniture
– Garments & Apparel
– Furniture
– Garden Products

The key role of raw materials

One point that is pertinent to the benefits of this Free Trade Agreement is centred on the rules of origin that will qualify for the Certificate of Origin being issued and the reduction in the duty on import. In the past, Vietnam has been reliant on the import of raw material coming in from overseas. Consequently, some industries are going to enhance their local supply chains to take advantage of this deal.

Requirements for the tariff reduction

‘’Originating” will be key to the tariff reduction. Products will be considered ‘’originating” under the Treaty if they meet one of the following requirements:
• Wholly obtained in Vietnam; and
• Products produced in Vietnam incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing within Vietnam.
Many goods still do contain materials and components imported from countries not party to a trade agreement. In fact, sectors like automotive and electronic are good examples where greater domestic production is needed before any advantages of the FTA will be attainable. Currently, 62% of materials for the electronics industry and 53% from the automotive sector are sourced from abroad. Therefore, greater efforts are required to improve linkages between domestic suppliers and foreign enterprises.

Vietnam Sourcing & ET2C

ET2C has been on the ground in Vietnam for the past 13 years. We have strong connections across the manufacturing sector for all our clients Vietnam sourcing requirements. In particular, we have been manufacturing and exporting a range of products across Garden Products, furniture, ceramics, soft goods, shoes and even cloth masks during this pandemic.
We have also attained FSC certification back in August 2019 so that we were able to export wooden products from Vietnam and ensure that the raw material is being sustainably managed. We have strong connections with furniture manufacturers throughout Vietnam, which now one of the world’s largest exporting countries for wood and wood exports with around 4,500 timber processing enterprises across the country.

New opportunities for European Retailers.

Vietnam will undoubtedly benefit from the EVFTA. European retailers will see more opportunities to leverage their connections with South East Asia. This coupled with the fall out from coronavirus and the rise in protectionism, will lead to an increased interest in the Vietnamese manufacturing sector. For all your Vietnam sourcing needs, please contact us at Vietnam@et2cint.com.

As part of our series on PPE and COVID-19, we wanted to take the opportunity to update you on the latest advice around the use of the face mask. The World Health Organization has issued new guidelines for face masks amid the COVID-19 pandemic, suggesting that they should be used in more situations than previously advised. Specifically, the WHO updated its guidance on the use of masks in areas with community transmission. Some of the key take-outs from this latest update in the battle against this pandemic are:

1. All the people working in clinical areas of a health facility should wear a medical face mask. This means not only workers dealing with patients with COVID-19, but the whole staff; and
2. Governments should encourage the general public to wear masks where there is widespread transmission and physical distancing is difficult. Such situations include, for example, forms of public transport and certain shops.

Furthermore, their updated guidance contains additional information about fabric masks, based on new academic research that has recently been published.

Face Mask – how to wear it: Do’s and Don’ts

As a number of countries are now emerging from their respective lockdowns, it is important to understand the do’s and don’ts of wearing non-medical fabric face masks in order to make them effective and continue preventing the coronavirus.

Importantly, masks should only be used by one person and should not be shared. You should change a visibly soiled mask and shouldn’t wear a wet mask for an extended period of time.
Also, you should wash frequently the non-medical masks and handle them carefully. In this way, you will avoid contaminating other items.

Materials

The WHO clarifies that the material selection is an important first-step as filtration and breathability vary depending on the fabric. Also, filtration efficiency depends on the tightness of the weave, fibre or thread diameter, and, in the case of nonwoven materials, the manufacturing process.
The choice of the right material is essential because depending on the fabric used, filtration efficiency and breathability can complement or work against one another.

Number of Layers

According to the WHO guidelines, non-medical masks should present a minimum of three layers, depending on the fabric used.
In particular, the ideal combination of material for non-medical masks should include three layers as follows:
1) an innermost layer of a hydrophilic material (e.g. cotton or cotton blends);
2) an outermost layer made of hydrophobic material (e.g., polypropylene, polyester, or their blends) which may limit external contamination from penetration through to the wearer’s nose and mouth;
3) a middle hydrophobic layer of synthetic non-woven material such as polypropylene or a cotton layer which may enhance filtration or retain droplets.

Face masks – enough to prevent the contagion?

The World Health Organization is really clear about this. Face masks can protect others around you. However, remember that masks alone can’t protect you from COVID-19. To prevent the spread of the virus, you have to maintain at least one metre distance from others (this varies by Government) and wash your hands regularly and thoroughly, even when you are wearing a face mask, claims the WHO.

Looking for Cotton Masks? We can help!

We are currently working with our partners in Vietnam to provide a range of Cloth Face Masks to meet the world’s needs and to combat this deadly virus. In addition, we have other medical products from disposable masks, protective gloves, face shields, hand-sanitizers, medical suits, gowns, and more. Obviously, as lockdowns are lifted, demand has transitioned into more sustainable supply in key products. For all enquiries, please contact us for more information at coronasupplies@et2cint.com .

China manufacturing is obviously the first option that comes to one’s mind when considering outsourcing any production. It’s scale, breadth of products and supplier network are unrivalled the world over.
Clearly, decreasing product cost is the main driver for any decision in favour of outsourcing.
However, outsourcing can bring many other benefits to your business, like for example increasing the flexibility of your supply chain.

In our previous article, we already listed the main advantages of outsourcing manufacturing:

• Costs reductions
• Raw material
• Flexibility
• Quality
• Expertise.

Certainly, it is more affordable to outsource production processes to companies that have a comparative advantage in that area than to produce them internally and China is not the only option available.
In this article, we will be providing you with an overview on the main manufacturing jurisdictions in Asia.

China Manufacturing

Although China’s manufacturing base has had challenges over the past five years (notwithstanding the current impact of the Coronavirus outbreak), it continues to be the manufacturer to the world. There is no doubt that there is work to do though to retain a competitive advantage and with the Chinese Government’s implementation of “Made in China 2025”, and investment in smart manufacturing and technology, there is a promise of further efficiencies being driven through their factory gates.
How can we help?
As your China sourcing agent, we will help maximize your company’s sourcing potential in China’s complex manufacturing base. Contact us at shanghai@et2cint.com to know more.

Vietnam

Vietnam is one of the most dynamic and fastest-growing emerging markets and represents a valid alternative to China sourcing. First, the country is currently propelled by buoyant export demand and supported by strong foreign direct investment. In addition, the manufacturing sector benefits from a strong work ethic of the Vietnamese and their commitment to quality.

Vietnam actually wants to remain competitive, with low labor rates, while bringing a greater quality for economic transformation. The young and skilled workforce is highly literate, willing to learn and trainable.

China Manufacturing Advantages of sourcing from Vietnam

The country continues to attract business from US buyers due to the current tariffs imposed on Chinese products. Clearly, companies are also looking to de-risk and look to spread their supplier base across multiple jurisdictions.
Also, Vietnam has the largest investment in infrastructure in South East Asia, including in both private and public sectors. With nearly a billion US dollars being spent on new infrastructure projects, Vietnam is serious about increasing the speed and efficiency of its economy.

China Manufacturing The biggest industries in Vietnam

Electronics, machinery, and steel are some of the biggest industries in Vietnam.
In terms of quality and high value in production, we must mention:

• Furniture. With an export value of USD 8.66 billion and 1,500+ medium to large furniture manufacturers, Vietnam is one of the most important outdoor and indoor furniture manufacturing countries in the world.
• Garden product. This is a growth manufacturing sector in Vietnam, due to the available raw material and skill set within the workforce.
• Garment. This sector has been developing strongly and plays an increasingly important role in economic growth of the country. Vietnam is the third-largest garment exporter, with major exporting destinations including the United States, EU, Japan, and South Korea.

Is sourcing from Vietnam the best option?

Vietnam is a growing economy but suffers from an inadequate infrastructure in banking, communications and transport.
However, while China has slightly lost its competitive edge over the past couple of years, mainly due to the increased labour cost and lack of investment, manufacturing in Vietnam still offers the flexibility of low volume, high mix production and competitive overall cost level.
If you think that Vietnam might be the right Sourcing solution for you, contact our team now: vietnam@et2cint.com.

China Manufacturing India

India has a large and growing workforce, China Manufacturing as well as access to raw materials. With a newly elected pro-business and pro-manufacturing government, the country is entering a new era of skilled manufacturing and production. Investment in smart manufacturing is coming to the fore and should create greater production efficiencies in the future.
For these reasons, an increasing number of companies are exploring alternative markets such as India to diversify their business and minimize risks.

China Manufacturing Benefits of Sourcing from India

First of all, a wide range of raw materials are readily available within India including cotton, silk, jute, marble, metal, wood, bamboo and others. The country traditionally focused on producing unique and handcrafted products not found in other countries.
In general, Indian suppliers have more respect for their buyers’ IP than suppliers from other countries and there are more robust laws in place to implement such protection.

China Manufacturing India’s top industries

India’s top exported categories overall are raw materials and industrial products. Other goods that you can import from India include handcrafted items made of various materials such as metal, ceramic, wood and textiles; apparel and fabrics; fashion accessories; leather products; and eco-friendly products.
Are you looking for Indian suppliers? As your India sourcing agent, we will guide you through the complexities of the Indian market and identify product opportunities. Contact us at india@et2cint.com and let us help!

China Manufacturing Summary

China is still an important part of the global sourcing arena, and will continue to be so. Scale and population size (albeit an aging demographic) still count and provide a significant advantage when compared with smaller markets. For example, Vietnam by comparison is only 90 Million people in total against China’s 1.6 Billion population.

China Manufacturing The annual GDP output of Guangzhou City, in Guangdong province, is more than the whole of Vietnam in 2019.

Certain industries have become more global and the garment sector is a good example of this. New territories often bring with them new challenges. At ET2C, we are constantly looking for the best suppliers for our clients both within China and beyond. For all enquiries, please contact us at contact@et2cint.com

With the spread of the coronavirus worldwide, the consumption of disposable face masks has seen an incredible spike.
Whilst wearing a mask had previously only been recommended to those that already showed symptoms, the situation has now changed. In fact, there is increasing evidence that the Covid-19 can be spread by pre-symptomatic and asymptomatic carriers. For this reason, many Governments and health organisations , like the CDC, are recommending people consider wearing cloth face coverings in public settings where other social distancing measures are difficult to maintain.

Is it always better to wear a mask?

Although there is still much to be learned about the novel coronavirus, it appears that many people who are infected are shedding the virus – through coughs, sneezes and other respiratory droplets – for 48 hours before they start feeling sick. And others who have the virus – up to 25%, according to Centers for Disease Control and Prevention Director Dr. Robert Redfield — may never feel symptoms but may still play a role in transmitting it.
That’s why wearing a mask even if you don’t feel sick can be advisable for the general population.

Are there sustainable alternatives?

Now that everyone is concerned about protective equipment to stay safe, face masks are a must to prevent the contagion.
However, some consumers criticized the use of disposable masks because this does not represent an environmentally-friendly choice.
Are there sustainable alternatives for those who do not want to use surgical masks or respirators?
Can these consumers opt for masks that they can use again and stay safe?

Cloth Face Masks

Cloth Face Masks are certainly a sustainable option.
Conventional fabrics like cotton block liquid droplets and can provide incremental protection against airborne particles. Obviously, those in constant contact with people affected by the virus have to use disposable masks for safety reasons. But in certain circumstances, the use of a cloth mask can be a sustainable choice from a waste perspective as well as help alleviate the current medical supply shortage.
Moreover, cloth masks are washable, reusable and recyclable. A perfect choice for many consumers that care for sustainably.

Help from the Fashion Industry

Although this industry, in particular, is significantly impacted by the lockdowns across multiple continents – given people are not going out and will likely have less disposable income – the fashion world is working to aid healthcare workers in the battle against the coronavirus.
Recently, a number of fashion companies announced that they would pivot and use their workforce to produce personal protective equipment.

Gucci

Gucci is set to manufacture 1.1 million face masks to aid Italy amid the country’s shortage of medical supplies.

Armani

The Armani Group announced that it has converted all of its production sites in Italy to produce hospital gowns.

LVMH

The luxury conglomerate LVMH, which owns several fashion houses including Christian Dior, Fendi, Givenchy, Louis Vuitton and Marc Jacobs, announced to use its global distribution network to provide more than 40 million masks in the coming weeks.

Brooks Brothers

Their factories in NY, North Carolina and Massachusetts will pivot from making ties, shirts and suits to manufacturing masks and gowns. The company expects to produce 150,000 masks per day.

In addition to the famous brand knitting cloth masks, a lot of labels are recycling fabrics from past collections to make sustainable cotton masks.

Cloth Masks – are they effective against coronavirus?

In Vietnam, several textiles businesses are dedicating the production to antibacterial masks.
In particular, our suppliers are developing 3-PLY Droplet Resistant Antibacterial Masks and Nano Silver Antibacterial Masks to help combat the virus.

3-PLY Droplet Resistant Antibacterial Masks.

These masks are made of 100% cotton and can be washed and dried for reuse.
The 3 integrated layers offer a great protection against airborne particles and droplets containing viruses and bacteria.
They are comfortable and enable a normal breathing.

Nano Silver Masks.

Made of washable 100% Cotton, these masks are composed by 3 integrated layers.
In particular, the one in the middle is treated with Silver Nano technology that works as a safety filter. In fact, it eliminates small particles of bacteria that pass through the outer layer of the mask.

Nano Silver technology is an antimicrobial colloid composed of silver nanoparticles stabilized by a polymer that exhibits excellent antimicrobial efficacy across a wide spectrum of microorganisms.
While Silver inhibits the oxygen exchange in bacteria and kills it, this technology has been demonstrated to enhance that effect.

Looking for Cotton Masks? We can help!

We are currently working with our partners in Vietnam to provide a range of Cloth Masks to meet the world’s needs and to combat this deadly virus. In addition, we have other medical products from disposable masks, protective gloves, face shields, hand sanitizers, medical suits, gowns and other products to meet your needs. From a sourcing perspective, the current regulatory landscape in China is very complex on these products so please make sure if you are buying direct, you are doing the appropriate due diligence and checks. For all enquiries, please contact us for more information at coronasupplies@et2cint.com .

Disclaimer. According to the World Health Organisation, masks alone will not prevent people from catching the coronavirus, and must be used in combination with normal hygiene methods, such as handwashing with soap and water.

While upsetting the start of 2020, the coronavirus has highlighted the importance of having a diversified sourcing strategy. It is true that many companies were already casting their net outside of China to identify suitable suppliers as part of a broader strategy to ‘de-risk their supply chains’. Most recently, US businesses have found themselves looking for other sourcing jurisdictions as a means of mitigating the penal tariffs imposed by the Trump administration in 2019. Although these have now abated as part of the ‘Phase One’ deal, certain categories are still subject to additional tariffs and where this is not the case, US companies have taken the hint to look beyond China for some of the product ranges. Asian sourcing is now integral to buying from this part of the world.

Asian Sourcing Markets.

China, with its scale, will remain an important part of any sourcing strategy but it is likely that a ‘China plus’ (China plus one other jurisdiction) or ‘China plus plus’ (China plus more than one other sourcing jurisdiction).will be the strategy of choice for companies leveraging the benefits from the Asian sourcing sector for the foreseeable future. Over the past decade, alongside China, Asian nations with an abundance of low-cost labour have looked to export manufacturing as a means of growing their economies and creating wealth for their workers. Vietnam, Bangladesh, India, Indonesia, Cambodia, Laos and to a less extent Thailand can all be added to this list.

We have therefore been speaking to our teams based around Asia, to gather some insight into what considerations companies should review when entering new markets and engaging with new suppliers. It is certainly true that the Chinese manufacturing base has, over the last 15 years, developed an understanding of what it means to export goods to certain markets and have been able to tailor their services to align, in some cases seamlessly to their clients’ needs.

Insight

Our perspective comes mainly from a Vietnam/India sourcing context but does take into account other markets across the region. We have also looked to identify points that are common to most Asian markets rather than list market specific issues. These are as follows:

1.Do not underestimate culture & language.

Dealing with a Chinese supplier is wholly different from dealing with an Indian or a Vietnamese supplier. Whether it is an interpretation of an email, timelines, quality-assurance standards etc., make sure you are clear in communication and be rigorous in validating any information provided.

2.Cost should not be King.

Cost is germane to any purchasing decision and margin is often still the main metric that buyers are judged against. Often to make Asian sourcing work and new suppliers to be onboarded, a longer-term view needs to be adopted. This may mean entering into a trial phase to understand the factory’s capability under production conditions. It may mean that the cost is similar or even higher than the price point of your incumbent supplier. Possibly, see if you can get a Bill of Materials(cost breakdown) to further understand any cost drivers and/or anomalies.

3.Understand the complete supply chain.

China’s manufacturing sector is vast compared with some of its Asian neighbours. There are still some 300 million migrant workers in China. You look at Vietnam as the ‘workshop’ of the World and the total population is only 97 million. The point being that with scale comes the large supplier network, infrastructure, market competition and raw material availability. Therefore, you should understand the different aspects of the supply chain. Is the raw material locally sourced or from overseas? What does the labour pool look like? What are the cost implications of this? Are there additional lead times? There may be manufacturing limitations in a particular market; for example, the cost of a PU finish on metal worked products in Vietnam is expensive. Ultimately, this will all play into the commercial opportunity. It is important to do your due diligence.

4.Over-manage production & quality.

As with any new production, it is important to over-manage the production process and quality piece to ensure you are getting the visibility you need. Keep people on the ground to monitor the production and conduct the inspections as the products come off the line. That visibility is key.

5.Logistics.

Although there has been a significant uptick in investment in had infrastructure across the Asian region, make sure you understand which ports your products would be shipped to, how they get there and any possible bottlenecks. For example, certain ports may only have one shipment per week to your local market.

6.Be patient.

Do not expect the same type of relationship and information flow compared with factories that already know how you operate. There is likely going to be a learning curve as the supplier develops an understanding of your product. In some cases, you may not get to the price points you require initially, but, as above, this needs to be looked at over a medium-term horizon to develop viable suppliers in alternative markets.

Summary

There is no doubt that a broad Asian sourcing strategy will help mitigate risk and provide opportunities across the region. Entering new markets does come with challenges but as long as this is done correctly, then there are considerable benefits to your business.

At ET2C, we are well placed to help manage your China suppliers but also help you penetrate new sourcing markets and leverage the benefits using our on the ground expertise. Should have any queries on Asia sourcing, or more specifically Vietnam sourcing and India sourcing, please contact us at contact@et2cint.com.

Vietnam Garden Products: Key Sectors and Strengths

ET2C’s Vietnam Sourcing Team has already identified strong opportunities within the Vietnam Garden Products and Outdoor sector. This is due to raw material availability as well as manufacturing capability already in place. Combined with favorable political, social, and economic factors, Vietnam Garden Products present a significant opportunity on the global stage.

Although relations between the United States and China appear to be improving, Vietnam continues to attract U.S. buyers because of tariffs on Chinese products. These tariffs could raise costs by up to 25% this year if no agreement is reached. As a result, many companies are de-risking supply chains and spreading their sourcing across multiple jurisdictions. The Vietnam Garden Products sector will play an important role in this Asian sourcing strategy, with suppliers investing in manufacturing capacity and R&D.

As your Asian sourcing expert, we have highlighted some of the key Vietnam Garden Products categories. These include pottery, netting, garden tools, gloves, plant supports, arches, obelisks, hanging baskets, coco-liners, and outdoor furniture. To build on our “We Are Garden” initiative, we recently visited suppliers to gain deeper insights into the industry and opportunities. In this issue, we interviewed a pottery supplier who exports to the EU, U.S., and Australia.

Vietnam Garden Products : Pottery Supplier

After a two-hour drive, we arrived at a vast manufacturing site in Binh Duong Province. The site was bustling, with three containers being loaded as we pulled in.

The company CEO, Mrs. T, was waiting for us outside her office with some of her key staff.

We were shown around two large showrooms, filled with different product ranges and finishes, followed by their cavernous warehouse. It was immediately clear that this factory was well set up for export, with certifications including TQM, BSCI, and C-TPAT.

Established in 1999, the company manufactures ceramics, cement-based, and polyresin housewares. Their product portfolio includes ceramics, terrazzo, terracotta, pottery, high-fired, lite stone, and poly stone, among other key styles.

Vietnam Garden Products: Interview

1. Which countries within the Asian Region do you see as your main competitors? 

Within Asia, I see Malaysia and Thailand as our main competition. They do not have the labour cost advantage that Vietnam has and therefore mainly produce larger sizes by machine. They also do not have the range of colour options. China is always a competitor, due to its depth of manufacturing, but they are certainly volume geared.

2. What does ‘Sustainability’ mean to your business?

Sustainability means putting an emphasis on our staff and ensuring that they are treated in an ethical and fair way. Also, looking at focusing on the environment and our processes.

3. How do you continue to develop your export market and client base?

We have put a great focus on innovation and look to develop new and unique designs for our clients. Also, the service and quality we provide to our clients is key to grow our business with them as well as identify new clients at Global trade shows. We are also looking to engage more with social media.

4. What are your biggest challenges as a business?

From both an internal and external perspective, with increasing demand, we need to properly manage our staff base and production capability. One of the biggest challenges is the Government restrictions on pottery Kilns as we need to make sure we have space to fire our ceramics.

5. What is the future for the Vietnam manufacturing base in your product category?

The pottery industry in Vietnam is well established and has been exporting products for a long time now. There is innovation coming into the Homewares category and this is evident with the introduction of lightweight options. These are cement compositions (such as polyresin) and have shorter lead times, are lightweight and can be used to make lots of contemporary styles. We have our own unique features, that we have honed over our years of experience, such as unique glazes, water & frost resistance, and special surfaces.

Vietnam Garden Products: Summary

Vietnam Garden Products Essential Insights & Opportunities The Vietnamese Pottery industry is underpinned by over a thousand years of artisan expertise and has developed to the mass market offering that it is today. Although labour is still an important part, there is increasing investment in machinery to make the process more efficient. Moreover, this will detemine more advantageous costs on a global stage. New alternative materials have also become more prevalent as different options for the consumer.

As a Vietnam Sourcing Company, and having been on the ground for over 10 years, we have identified the Garden Product and Outdoor sector as a growth manufacturing sector in Vietnam. Where necessary, we have developed manufacturing capability at factory level to produce high-quality products at competitive prices. There is now a unique opportunity to source a breadth of products all out of Vietnam.

For more information, please contact us at vietnam@et2cint.com. We will help your business positively blossom!

Garden Products: Key Sectors and Strengths

ET2C’s Vietnam Sourcing Team has already identified opportunities within the Vietnam Garden Products and Outdoor sector due to raw material availability and strong manufacturing capabilities. Combined with political, social, and economic factors, Vietnam presents a powerful opportunity on the global stage.

Vietnam Garden Products continue to attract U.S. buyers, especially with tariffs on Chinese goods pushing costs up by as much as 25% if no agreement is reached. In response, many Vietnamese suppliers are investing in R&D to stay competitive with innovative designs that match global market needs.

As your Asian sourcing expert, we have highlighted key sectors within Vietnam Garden Products — including pottery, netting, garden tools, garden gloves, plant supports, arches and obelisks, hanging baskets, coco-liners, and furniture. Building on our ‘We Are Garden’ initiative, we engaged directly with suppliers to gain deeper insights into the industry and the opportunities available.

One such example is a leading furniture and decking manufacturer serving the U.S. and EU markets. Their production is part of the wider Vietnam Garden Products ecosystem, which showcases not only raw material strength but also innovation, sustainability, and competitive pricing.

Garden Products : Furniture Supplier

Forty-five minutes outside of Ho Chi Minh city, we turned off the main road into a vast industrial park. Unlike most industrial parks, we found ourselves pulling up beside a wooden house set within a lush garden, where we were greeted by the company Chairman (“Mr T”). This was of course a showroom and an oasis set aside the impressively well-managed manufacturing facility. Mr T has over 20 years’ experience in dealing with wooden furniture exports from Vietnam. During the years, he has seen the evolution of manufacturing capability first-hand. His factory is both FSC™ and BSCI certified and is set up to deliver against international expectations from an Asian sourcing perspective.

Garden Products : Interview

1. Which countries within the Asian Region do you see as your main competitors?

I see Indonesia and Malaysia as my main threats given the type of products that they manufacture, service level, and quality they can produce.

2. What does ‘Sustainability’ mean to your business?

Sustainability and eco-friendly was important for our brand from the very beginning. As a result, we have a strict process when it comes to selecting the source of raw material. Whether our wood comes from the US, EU, Malaysia, Paraguay, Brasil or even locally, it all must be FSC™ certified. We also comply with the protocol of using only non-formaldehyde compounds to ensure our products are as sustainable and eco-friendly as possible.

3. How do you continue to develop your export market and client base?

We have experience in dealing with large international clients. Therefore, we understand that executing against specifications, delivery dates and price are key-components in developing and retaining our client base. For instance, we put an emphasis on developing ‘partnerships’ that help us innovate and align with the client. In this way, we are always able to find the best possible options for our clients.

4. What are your biggest challenges as a business?

From an external perspective, with a number of companies recently moving out of China, Vietnam Garden Products are becoming more competitive on the global stage. Pricing remains a challenge, as many buyers still compare to historical supplier costs. Of course, price is important, but we want to work with clients who recognize the broader value that Vietnam Garden Products bring — quality, innovation, and sustainability.

Internally, one of the biggest challenges is wage inflation and staff retention, with costs rising 3–5% per year. Our employees are central to long-term success. Therefore, we created a development program to help our staff grow and develop alongside our business, ensuring Vietnam Garden Products maintain consistent quality and reliability for international clients.

5. What is the future for the Vietnam manufacturing base in your product category? 

The furniture industry in Vietnam continues to develop and evolve with increased competition across Asia. There needs to be a shift to a greater use of technology and machinery to enhance efficiencies and maintain prices rather than solely rely on manual labour.
There is Government investment in infrastructure and manufacturing. Combine this with the experience of making furniture over many years in Vietnam, we are well-positioned to continue to grow this category of exports in the future. As a business, we are looking to reach new markets with different requirements who focus on quality, design, and sustainability.

6. Garden Products Competitive Position in Asia – Vietnam stays strong as a sourcing hub by combining lower costs with adaptability to changing market demands.

Competitive Position in Asia Despite increased competition from other Asian countries like Indonesia, Malaysia, and India, Vietnam maintains a strong sourcing position because of two main advantages:

• Cost Advantages – Vietnam offers lower production and labour costs compared to many regional competitors. Even with gradual wage inflation, manufacturing in Vietnam is still more cost-effective than in China or other higher-cost markets. This makes Vietnam attractive for global buyers looking to balance quality with affordability.

• Adaptability – Vietnamese manufacturers have shown flexibility by quickly adjusting to changing market demands, tariffs, and buyer requirements. For example, many factories shifted from outdoor to indoor furniture or invested in R&D to develop new designs. This adaptability allows Vietnam to stay competitive even when global trade dynamics shift.

Summary

There are approximately 1,500 furniture exporters in Vietnam with 30% of these being a result of foreign direct investment (FDI). Certainly, one key advantage of this category is the flexibility that has been demonstrated with a pivot from the more traditional outdoor furniture lines to an increasing industry for indoor furniture (as with Mr T’s factory).
As a Vietnam Sourcing Company, on the ground for over 10 years, we have identified the Garden Product and Outdoor sector as a growth manufacturing sector in Vietnam. Where necessary, we have developed manufacturing capability at factory level to produce high-quality products at competitive prices. There is now a unique opportunity to source a breadth of products all out of Vietnam.

For more information, please contact us at vietnam@et2cint.com. We will help your business positively bloom!

Garden Products is a growth manufacturing sector in Vietnam, due to the available raw material and skill set within the workforce. Taking advantage of raw materials and with a strong OEM capability, there are suppliers capable of producing customised pieces whilst assuring high-quality standards at competitive prices.
Certainly, the many favorable conditions within the country make the Vietnamese offering one of the most competitive in Asia.

Why “Sourcing from Vietnam” became a trending topic?

Vietnam is one of the most dynamic and fastest-growing emerging markets. First, it is currently propelled by buoyant export demand and supported by strong foreign direct investment. In addition, Vietnam’s geographical proximity to China and strong political and economic links with Beijing pay dividends. Current cost pressures created by US trade tariffs has seen manufacturers shift production out of China to cheaper locations such as Vietnam. The country benefits from regional trade pacts and a young and educated population. Furthermore, the still cheap and growing labour force continues to attract direct foreign investment.

Five Advantages of Sourcing from Vietnam.

If not already, the latest and increased round of tariffs on China by the USA further augments the demand for companies to move to Vietnam as an alternative to China. Meanwhile, Vietnam has also moved to seize on these opportunities with Vietnamese exports to the US having increased by 36% in the first five months of 2019 when compared to the same period last year. Consequently, with goods valued at 25 billion US dollars shipped into the United States, Vietnam has become the eighth biggest source of American imports.
As a Vietnam sourcing company and a presence on the ground for the past twelve years, we have seen the development and evolution of the manufacturing sector in Vietnam. Now, more than ever, Vietnam should form part of any company’s Asian sourcing strategy.

1. Favourable Geographical Location

Vietnam is one of the top South-Asian countries with almost 3,500 kilometres of coastline. This presents great potential for shipping efficiencies and provides access to neighbouring countries with no access to the sea such as Laos and Cambodia. In fact, Vietnam has a total of 114 seaports, 14 of which are relatively large and named as one of the keys to economic development.

2. A Young and Skilled Workforce in Vietnam

Of Vietnam’s 95 million people, half are under 30. This is in stark contrast to the demographics of many other Asian countries (China in particoular). Vietnam therefore wields a young and dynamic workforce, which combined with low labour rates relative to other manufacturing export markets, makes it a suitable manufacturing destination.

3. Numerous positive trade agreements

Vietnam has signed a number of beneficial trade agreements that act as enablers to the manufacturing sector. Most recently EVFTA between Europe and Vietnam, albeit this is yet to ratified.

4. The best political stability option of the region

Political stability is always a key factor in determining the right country to manufacture in. Vietnam has a stable Government and is seen as one of the most politically stable markets across Asia.

5. A Growing Manufacturing Sector

As well as the more established product sectors in Vietnam (handicrafts, ceramics, furniture, shoes etc), there is increasing FDI within the manufacturing sector and infrastructure leading to the evolution of new product categories such as kitchenware, plastics and Garden products.

Garden Products: Key Sectors and Strengths

ET2C has identified opportunities within the Garden & Outdoor sector exclusively from Vietnam due to raw material availability as well as manufacturing capability already in situ.
For example, Garden furniture manufacturers take advantage of raw material availability in Quy Nhon and locate themselves in close proximity. In addition, because they are located outside the major cities allows them to leverage lower labour costs too.

Furthermore, Vietnam continues to attract business from US businesses due to current tariffs on China which will mean costs rising by anything up to 25%. Many Vietnamese suppliers are investing in additional R&D to ensure they have a competitive edge by presenting new designs according to market requirements.

The key sectors in this industry include:

• Pottery
• Netting
• Garden Tools
• Garden Gloves
• Plant support, Arches & Obelisks
• Cocoliners & Hanging Baskets
• Garden Furniture

We Are Garden; Come to Vietnam for Garden Products and Outdoor Opportunities

As your Asian sourcing expert, ET2C has identified the Garden Products and Outdoor sector as a growth manufacturing sector in Vietnam. Where necessary, we have developed manufacturing capability at factory level to produce high-quality products at competitive prices. There is now a unique opportunity to source a breadth of products all out of Vietnam.

For more information, please contact us at vietnam@et2cint.com. We will help your business positively bloom!

What is next in the USA/China tradewar? With negotiations continuing and tariffs implemented, the rest of the world waits in anticipation of its forthcoming results.

Like with Brexit, uncertainty is on the rise as negotiations continue with no finite deadline. As the two largest economies in the world, the United States (US) and China trade war have put large amounts of pressure on the global economy. The tit-for-tat tariff battle has cost both economies billions of dollars, disrupted supply chains and rattled financial markets. In February, President Trump, for the second time, delayed his plans to increase tariffs on Chinese goods to 25 percent from the current 10 percent citing the amount of progress achieved in discussions. As both countries continue with discussions, the world waits in anticipation.

What is Next?

US Treasury Secretary Steven Mnuchin told reporters within the last couple of weeks that talks are progressing well, but there is still much work to be done. He stated that the current agreement would go “way beyond” previous efforts to open China’s markets to US companies and hoped that the two sides were “close to the final round” of negotiations. While no details of the deal have been disclosed, Washington is seeking changes to China’s economic and trade policies, particularly around their IP practices, while China wants more access to US markets, specifically finance. The big question everyone is asking: will there be deal and what will happen next?

Experts seem to agree on one point; a deal does not mean this trade dispute is over. Even if there is a “comprehensive” deal, it likely only marks the beginning of such negotiations between the two nations. The broad headline terms appear to have been determined based on media reporting. These include a mutual tariff rollback and softer US stance towards China. In return, China will no doubt have to commit to broad purchase commitments for goods and services. The inevitable sticking point is reported as being the framework on protecting foreign intellectual property rights. Negotiators are still grappling over its terms and how they will be enforced.

Alternatively, if neither side can compromise (and both sides politically likely need a deal) and a deal falls off the table, then there is a risk of further tariff increases which will have a significant impact on goods from China to the US as well as any reciprocal tariffs raised by China on US exports. Whether or not Trump will choose to enforce his tariff increase is yet to be seen – it has to be a last resort – but it is clear that the US will continue to hold the threat of tariffs over Beijing to ensure its commitment to the final deal.

Is Vietnam the Winner?

Inevitably, there has been debate as to which Country is likely the beneficiary for US Buyers to reallocate their dollars. Vietnam appears to have been mentioned the most times given how its manufacturing sector has developed over the past five years and has actually taken relative market share away from China; more so than any other Asian nation. However, there is still a lack of evidence to directly support this claim. The country, along with Southeast Asia as a whole, was expected to benefit from the lack of a resolution. One commentator told CNBC earlier in the year that it was still a bit early for Vietnam to be benefiting in any significant way from the trade disputes. Some reports have indicated companies have begun shifting production from China to avoid tariffs; however, others say this is just a continuation of the ongoing trend towards diversifying production outside of China.

From our perspective, although there are certainly opportunities to leverage what is an evolving export manufacturing sector, the ‘elephant in the room’ is likely going to be capacity in the short term. It takes time to develop. At Factory level, the commercials need to make sense before the investment is made available and that needs to be more than simply the imposition of temporary tariffs. There needs to be a structural shift.

To provide some insight, we recently visited a furniture factory in Vietnam who had just met with a large US retailer looking to relocate some production out of China. Although the meeting was positive and there was a clear commercial opportunity, the factory owner, when asking about volumes, realized that one SKU for this retailer would be 110% of their annual capacity. Compared with China, capacity in some of the other Asian markets is an issue in the short term.

Diversification of Sourcing Location

There is no doubt that US Corporations manufacturing products in China, if not producing in alternative markets already, are looking for alternative locations.

According to a recent survey by the Swiss Investment bank, UBS thirty-seven percent of respondents had moved some production out of mainland China in the past year. Another thirty-three percent noted they plan to move some production within the next six to 12 months. A part of this was driven by the imposition of tariffs and the need for diversification whilst the import duties were in place.

The location of alternative manufacturers will be dependent largely on the products and the complexity of the supply chains to be able to make those products. This will include raw material availability, infrastructure, regulatory and compliance requirements, labor force and capacity to name a few points that must be addressed.

What to Consider Before Leaving China?

The US-China trade war has added new energy to shifting production out of China. Whether companies are moving due to the trade war and or are looking to diversify their sourcing locations there are many factors to consider:

• Feasibility and risk of shifting out of China
• Costs of moving existing supply chain
• Ease of doing business in a new location
• External expertise to help mitigate disruptions

Summary

The outcome of the trade war is yet to be determined. The current information from both sides appears to be at least framed in a positive light but there is no certainty as to what the conclusion will be. Many commentators are suggesting that both sides need a deal although the one thing that is certain is the US administration can be unpredictable.

At ET2C we are dedicated to building close relationships with our clients and ensuring we are not only informed but well versed in sourcing trends. We are currently working with our US clients to assess and look at alternative markets within Asia for their production. We offer multi-industry sourcing, procurement, and quality control solutions that help our clients get the most out of their Asian manufacturing base. Contact us for a discussion about your current supply chain.