Apparel manufacturing sector in Vietnam
One of the main competitive advantages of the Vietnamese manufacturing industry lies in its low labor cost, compared to its competitors such as China and Mexico. As a result, the industry has become one of the leading sectors for foreign direct investment in Vietnam. Consequently, the export of apparel products relies on the production of foreign-owned companies and local-private-owned subcontractors. Meanwhile, local production and imports address the growing domestic demand for apparel products.Vietnam is highly dependent on imports of raw materials such as cotton, fiber, yarn, textiles, and garments for clothing production as domestic supply has not been sufficient in recent years. For instance, due to decreasing domestic production of cotton, the country has been a net importer of this material, with the United States being its largest supplier in the past years. Heavy reliance on imports poses significant risks to the apparel manufacturing industry. Along with the pressure to meet domestic demand, the government has thus been prioritizing the development of the domestic raw material supply chain for the textile, garment, leather, and footwear industries.
