In the first ten months of 2019, Vietnam’s earnings from apparel exports grew 10.4 per cent. Year-on-year increase has been 8.7 per cent. In October, Vietnam’s apparel and textile exports grew by nine per cent. There are over 2,000 textile and garment projects in the country. Vietnam’s supply chain diversification has been happening for the past few years, mainly driven by rising labor costs in China. The full supply chain has been set up in the country for the past decade already. There has been a shift of manufacturing units from China to Vietnam.
But unlike 2017 and 2018 many apparel companies in Vietnam have witnessed a significant dip in long-term orders mainly because of the uncertain global scenario. Also, Vietnam’s clothing imports have risen 13.5 per cent. Customers are avoiding long-term orders and trying to reduce prices, eating into firms’ profits. The yarn market witnessed a sharp decline in both demand and prices between the end of 2018 and the first quarter of 2019. Vietnam’s yarn producers, particularly those exporting products to China, have been hit the hardest by continuous price decreases. The situation is getting worse as these companies are facing fierce competition for orders from FDI-funded firms and those from Thailand, Indonesia, and Pakistan.