As manufacturing costs become a core competitive factor, businesses are increasingly interested in choosing low-cost manufacturing countries in Asia such as Vietnam, China, India and Bangladesh. With advantages in abundant labor resources, investment attraction policies, and developed supply chains, these countries have become attractive manufacturing destinations in the world.
However, each country has its own characteristics in terms of labor costs, product quality and supply chain efficiency. In that context, choosing a manufacturer that suits the needs and business strategy becomes an important decision that each business needs to consider carefully. So what is the ideal destination for low-cost manufacturing in Asia?
The need for low-cost manufacturers of enterprises
In the context of fierce competition, enterprises are increasingly looking for countries with low production costs to optimize costs and increase profits. Reducing production costs not only helps enterprises increase their competitiveness in the market but also supports them to expand their scale and increase their market share.
Among the global manufacturing destinations, Asian countries such as Vietnam, China, India and Bangladesh play an important role in the supply chain thanks to their abundant, low-cost labor and increasingly developed infrastructure. These countries have built a position as low-cost manufacturing centers, meeting the great demand of the international market, especially in the textile, electronics and product processing industries.
The development of Asian countries in the manufacturing sector not only benefits international enterprises but also promotes local economic growth and employment, contributing to the development of the global supply chain.
Overview of manufacturing in Vietnam, China, India and Bangladesh
Each country has its own strengths in manufacturing
Vietnam
As one of the prominent manufacturing hubs in Southeast Asia, Vietnam is thriving in the textile, footwear and electronics industries. With a highly skilled workforce and an open-door policy for foreign businesses, Vietnam is increasingly attracting many investors.
China
China is still the “world’s factory” with many strong industries such as electronics, heavy industry, household appliances, and consumer goods. Large-scale production along with a developed supply chain gives China a distinct advantage.
>> See more: The US has become ASEAN’s largest export market, surpassing the potential Chinese market
India
India is strong in textiles, information technology, and pharmaceuticals. The Indian government is encouraging investment in manufacturing to create more jobs and support the development of the manufacturing industry.
Bangladesh
Prominent in the textile and footwear industry, Bangladesh is one of the world’s leading apparel exporters. Cheap labor costs and government incentives help Bangladesh’s textile industry thrive.
Labor costs and production costs
Cost is a deciding factor when choosing a low-cost manufacturer:
China
Although once the place with the lowest production costs, labor costs in China have increased in recent years, especially in more developed areas such as Shanghai and Guangdong. However, thanks to its large and modern production system, China still maintains reasonable costs in some areas.
Vietnam
Vietnam has lower labor wages than China, helping to reduce production costs. According to a survey, the basic salary in Vietnam is 30% to 50% lower than in China, suitable for businesses looking for labor cost advantages.
India
India has quite low labor wages, especially in the textile industry. However, production costs may increase due to limited infrastructure, affecting the efficiency of transporting goods.
Bangladesh
Bangladesh has one of the lowest labor costs in the region, attracting many businesses in the textile and garment industry. However, infrastructure limitations and working conditions are not up to international standards.
Product quality and production process management
China has diverse production capacity, from consumer goods to high-tech products. China strictly controls processes and quality, thanks to its advanced and modernized production system.
Product quality in Vietnam has improved significantly, thanks to labor training and investment in technology. Many Vietnamese manufacturing enterprises have achieved international certifications such as ISO, Oeko-Tex, GOTS.
Despite their low costs, the quality of products produced by manufacturers in India and Bangladesh still needs to improve to meet international standards. Some textile and garment companies in these two countries have adopted standards such as SA8000, but the production process still needs to be more closely controlled.
>> See more: Why Vietnamese clothing manufacturers become the top choice of international businesses?
Legal factors and government support policies
Vietnam
The Vietnamese government actively supports businesses with many policies to attract foreign investment and simplify legal procedures. Participation in free trade agreements (FTAs, EVFTA), is also an advantage to help Vietnam access many markets.
China
Despite its investment attraction policies, strict regulations on taxes and licenses can cause difficulties for foreign businesses. However, China is still an attractive market thanks to its large scale.
India
The Indian government has also issued many support policies, especially for the manufacturing sector. However, legal procedures in India are often more complicated and time-consuming than in Vietnam or China.
Bangladesh
The Bangladeshi government strongly supports the textile and garment export industry, with tax incentives and labor policies, but still needs to improve the legal environment to attract many other manufacturing industries.
Long-term growth and expansion potential
Vietnam and China have better potential for production expansion thanks to their advanced human resources and infrastructure.
Meanwhile, India and Bangladesh still need time to develop infrastructure and improve product quality to increase competitiveness.
>> See more: Bangladeshi – the world’s “garment capital” is struggling
Each country has its own advantages and disadvantages. Businesses should carefully consider their needs and priorities.