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Opportunities and challenges for Vietnam’s textile and garment industry when exporting to foreign markets

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In recent years, Vietnam’s textile and garment industry has become one of the country’s leading industries, with strong growth in production and exports. Expanding markets to foreign countries brings great opportunities for this industry, but also poses many challenges for businesses.

Current situation of Vietnam’s textile and garment industry

In recent times, Vietnam’s Textile and Garment Industry has made strong progress, playing an important role in the rapid growth of the economy. In the list of current export industries, the Textile and Garment industry ranks first with significant export turnover and growth rate, playing a key role in overall economic development. With a proportion of 12 to 16% of the country’s total export turnover, this industry makes an important contribution to the Vietnamese economy.

However, due to many impacts from the global economic recession and the effects of the Covid 19 pandemic, Vietnam’s textile and garment production and export in 2023 did not meet expectations with large inventories. In summary, in 2023, the total export turnover of the entire textile industry will reach 40.324 billion USD, down more than 9% compared to 2022.

Enterprises in the textile and garment industry have made significant efforts to overcome difficulties to find orders and maintain production and business activities. Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), emphasized that Vietnam’s textile and garment industry has achieved steady development in the international market, with the expansion of its export network to 104 markets and expanding into new markets such as Africa, Russia, and Muslim countries. This diversification shows a reduction in dependence on large markets, and at the same time, the export turnover of Vietnam’s textile and garment industry in 2023 has shown signs of recovery and tends to overcome difficult times due to caused by the Covid-19 epidemic.

Opportunities for Vietnam’s textile and garment industry

Large market

The development of the global economy has opened the door for Vietnam’s textile and garment industry to access new markets. Developed countries such as the US, Europe, Japan, and China are all potential markets for Vietnamese textile and garment products. Dozens of free trade agreements expand exports (AFTA, VJEPA, CPTPP,…), so Vietnamese textile and garment enterprises have more opportunities in export activities.

Especially the large and attractive US market. Currently, Vietnam is the second largest exporter of textiles and garments to the US, only after China.

Competitive production costs

With relatively low labor and production costs compared to many other countries, Vietnam’s textile and garment industry has a competitive advantage in price. This helps businesses provide high quality products at reasonable prices, attracting the attention of consumer markets.

Support policy from the government

The Vietnamese government has been implementing many support policies for the textile and garment industry, including preferential credit packages and measures to encourage investment and technology development. This helps enhance competitiveness and sustainable development for this industry.

Potential challenges for Vietnam’s textile and garment industry

Although the order situation of textile and garment enterprises in the first months of 2023 shows positive signs, the majority are only small and medium orders. Hidden challenges have caused major obstacles for Vietnam’s textile and garment industry.

Strong competitive market

Businesses are under competitive pressure from major textile exporting countries such as Indonesia, Malaysia, Bangladesh, India, Pakistan, China… While labor costs in Vietnam may be lower than in some countries countries, but those major textile exporting countries still maintain their position in the textile industry. Fierce competition from these rivals requires Vietnamese businesses to constantly improve and optimize production processes.

Requirements to ensure quality and safety

The international market places high requirements on the quality and safety of textile products. Vietnamese businesses need to ensure that their products comply with international standards, from raw materials to production processes.

Climate change and environmental issues

Climate change and environmental issues are becoming top concerns globally. Vietnamese textile and garment enterprises face pressure from the international community to implement environmental protection and sustainability measures in production processes.

Vietnam’s textile and garment industry is facing a great opportunity when expanding exports to international markets. However, to take advantage of this opportunity, businesses need to face and overcome challenges such as fierce competition, product quality and safety requirements, as well as pressure from climate change and the environment. school. Support policies from the government also play an important role in helping the textile and garment industry develop sustainably in the international market.

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