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What is the impact of COVID-19 on the Vietnamese manufacturing industry?
Impact of COVID-19 in 2020
In 2020, as the COVID virus spread around the world, Vietnam shut down its borders. However, the country remains open internally, and its manufacturers can continue to operate normally.
Impact of COVID-19 in 2021
In the 2021 summer season, there was an epidemic affecting production in Vietnam, but Vietnam recovered more quickly than expected due to the rapid deployment of vaccines beginning in August of that year.
Impact of COVID-19 in 2022
In 2022, Vietnam's economy continued to recover from the impact of the COVID-19 pandemic. The country's manufacturers benefited from strong global demand for electronics and other products, leading to a surge in exports. However, supply chain disruptions caused by ongoing outbreaks in other parts of the world continued to pose challenges for businesses in Vietnam. The government implemented measures to support affected industries and encourage investment in domestic production to mitigate these risks.
Impact of COVID-19 in 2023
By 2023, Vietnam had largely overcome the economic impact of the COVID-19 pandemic. The country's manufacturers had adapted to the new normal of remote work and increased automation, and were more resilient to future disruptions. Vietnam also continued to invest heavily in healthcare and disease prevention measures, in order to be better prepared for future outbreaks. As a result of these efforts, Vietnam emerged from the pandemic with a stronger economy and a more diversified set of industries.
Directories of Vietnamese manufacturers and wholesalers
Find a Vietnamese manufacturer and wholesaler on Alibaba.com
There are many supplier directories in Vietnam. However, the biggest online supplier directory, Alibaba.com, is the best resource for anybody seeking a Vietnamese manufacturer.
Alibaba.com has a section dedicated to Vietnamese suppliers, which is becoming increasingly important when searching for many types of products.
Users of Alibaba.com can select suppliers by location. So you can decide to look for just Vietnamese suppliers.
This website validates all gold suppliers, including suppliers based in Vietnam. As such, they offer one of the few trustworthy sources of supplier information available in the nation, including:
- Company name
- Registered address
- Legal status
- Registration number
- Issuing authority
- Date of issuance
- Name of applicant
- Title of applicant
Find a Vietnamese manufacturer and wholesaler on Globalsources.com
Globalsources.com also lists Vietnamese suppliers in its directory. But, compared to Alibaba, there are a lot fewer suppliers. Some of them also participate in the Global source's exhibition in Hong Kong.
Despite the fact that there aren't many Vietnamese suppliers, Globalsources.com offers the most information about them of any website:
- Registered address
- Date of creation
- Legal status
- Registration number
- Authorized capital
- Paid-up capital
- Legal agent
- Import and export of license status
- Field of activity
When choosing a supplier, it is important to know the field of activity, the legal agent, and the registered capital (i.e. paid-up capital).
Other directories identify good Vietnamese manufacturers and wholesalers
There are also local supplier directories that may be of interest to you:
Products that can be exported from Vietnam
The manufacturing base in Vietnam is not as large as in China. However, in terms of OEM production, it is probably the second-largest country in Asia.
Vietnam can be a good manufacturing destination if you are importing products in any of the following categories:
- Clothing
- Home decoration
- Luggage and bag
- Furniture
- Packaging and printing
- Promotional items and gifts
- Food and products
- PVC plastic
- HDPE and LDPE plastic
- Make a plan
- Wood products
- Hair extensions
Vietnam is also becoming a center for electronics manufacturing. Nevertheless, the country's electronics industry is mainly centered on multinational companies like Samsung and large contract manufacturers like Foxconn. If you are hoping to find many branded electronics manufacturers in Shenzhen, China, you will surely be disappointed.
Import of own-brand products from Vietnam
The majority of Vietnamese manufacturers are accustomed to working with experienced customers and global brands. Some firms don't want to buy "off-the-shelf" items, since they have their own product designs and technical requirements.
This could change in a few years if some of these OEMs decide to launch their own national brand, which will be a regional brand and possibly a global brand. This has also happened in China over the past 10 to 20 years.
Your brand is part of that evolution because it builds on existing tools.
Direct delivery of products from Vietnam
Drop-shipping as a concept was invented by traders based in Guangdong and Hong Kong in the late 2000s, but this concept has not been seen to spread to Vietnam and I don't think it will ever happen.
In fact, many Chinese companies acting as drop shippers are currently focusing on B2C sales to consumers in Vietnam and other Southeast Asian countries.
Are Vietnamese factories more profitable than Chinese manufacturers and wholesalers?
Labor costs are lower in Vietnam than in China. Although, lower labor costs only have a serious impact on costs at the macro level, which is certainly important for large companies like Foxconn and Samsung.
Nevertheless, for small and medium-sized importers purchasing from Vietnam, this does not necessarily translate into cheaper unit costs. For starters, wages are rising in Vietnam due to the high demand from big brands. In order to recruit enough workers, several contract manufacturers that have opened up shop in Vietnam in the last decade have been compelled to treble pay and provide bonuses on top of that.
In addition, other costs affect the unit price, such as logistics (remember that materials are often shipped from China) and electricity.
The calculation is different for U.S. importers, however, because Chinese tariffs are still in effect and must be taken into account.
Is it easier to work with a Vietnamese supplier?
It is understood that "the factory in China is difficult", so cooperation with the factory in Vietnam should be easier. I know there is a communication problem with factories in China, but I don't think we should expect it to be so different from our Vietnamese suppliers.
Also, the problem is often more about the complexity of manufacturing than anything else. Manufacturing is difficult in China, Vietnam, and even Europe.
Quality control measures in Vietnam
Many quality inspection companies are based in Vietnam, and many are in Hong Kong and mainland China. The standard cost per inspection is usually US$300-400, comparable to other countries in the region.
The list is as follows:
- Modern Testing Services Vietnam
- TÜV SÜD Vietnam
- SGS Vietnam
- Eurofins Vietnam
- UL VS Vietnam
- Quatest 3
- Intertek Vietnam
- DT & C Vina
- CTC Vietnam
- Kotiti Vietnam
However, it may not be possible to find a suitable testing center in Vietnam. In this case, the product sample can be sent to a center in China, Europe, or the United States. You do not need to do laboratory tests in Vietnam just because the product is manufactured in Vietnam.
Vietnam Minimum Order Quantity Requirements
Vietnam is a smaller country than China and automatically has lower MOQ requirements. Not exactly.
Since the start of the large-scale trade war in 2018, the demand for "Made in Vietnam" has exploded. The Vietnamese factory was not known for offering a low MOQ until 2018, and since then the incentive to offer a low MOQ has been even lower.
It's possible that you won't be able to locate a reliable supplier in Vietnam if you can't produce at least 500–1000 units per SKU per color. Of course, there are exceptions, but when researching vendors, this is often what you find.
The strategic location of Vietnam
Primary cities and industry clusters
In many Asian countries, the southern region is economically dominant. Vietnam is no exception, as Ho Chi Minh City is the economic and industrial center of Vietnam.
There is also a large industrial area in the northern part of the country. Especially in Hanoi and Haiphong and its surroundings.
Ports and shipping
As already mentioned, the economic center of Vietnam is in the southern region, accounting for 70% of all exports. The new port of Saigon is of course the largest container terminal in the country. Suppliers may be found in Vietnam's north and south, though.
When you start importing goods from Vietnam, your shipment can go through any of the following ports:
Information on Vietnamese shipping companies can be found on this page. Here is a list of companies:
- Fast Delivery International
- Royal Cargo
- AIT Worldwide Logistics
- Head Way
- JAS Vietnam
- Logistics Network Vietnam
- T&M Forwarding
- Saigon Ocean
- Tien Phong Trade and Transporting Services
- APT International
- Toll
- Crane Worldwide Logistic
- Agility
Air Freight
The majority of air cargo passes through Noi Bai International Airport in Hanoi and Tan Son Nhat International Airport in Ho Chi Minh City.
All major cargo carriers and airlines such as DHL and FedEx are stationed in Vietnam. There is no difference between other countries in terms of shipping and customs clearance.
Visiting supplier visas
Many nationalities can obtain a visa on arrival and stay for two weeks. If you want to stay for up to three months, you can also request for a business visa. You need an invitation from the business you want to visit in order to apply for a business visa.
Fairs in Vietnam (before Covid-19)
Vietnamese manufacturers and wholesalers are less used to using online supplier directories than their mainland Chinese competitors.
Vietnam has emerged as a popular alternative to China for manufacturers and wholesalers in recent years. There are several reasons why businesses are turning to Vietnam as a sourcing destination:
- Lower Labor Costs: Vietnam offers lower labor costs compared to China, making it an attractive destination for labor-intensive manufacturing.
- Increasingly Skilled Workforce: Vietnam has invested heavily in education and training, resulting in an increasingly skilled workforce, particularly in areas like textiles, electronics, and footwear.
- Strategic Location: Vietnam's location makes it an attractive destination for businesses looking to serve markets in Southeast Asia and beyond. It is situated near key shipping lanes and has multiple ports, making it a convenient hub for logistics.
- Trade Agreements: Vietnam has signed several free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which reduces tariffs and increases market access for businesses operating in Vietnam.
- Government Support: The Vietnamese government has implemented policies and initiatives to support foreign investment, including tax incentives, streamlined business registration procedures, and investment in infrastructure.
However, compared to Chinese suppliers, Vietnamese manufacturers and wholesalers may have a smaller scale of operations and a more limited range of products.
If you are seriously considering sourcing products from Vietnam, you can attend one of the following trade shows:
Accessories and Textiles Vietnamese Fairs
- Vietnam International Maternity, Baby & Kid Fair
- Vietnam International Jewelry Exhibition Fair
- Saigontex
- Hanoitex
Home and Furniture
- VIETNAMWOOD
- VIFA Expo
Electronics Vietnamese Fairs
- NEPCON Vietnam
- VIETNAM ELECTRIC CABLE CORPORATION
- The Solar Show Vietnam
Resources Vietnamese Fairs
- Complast Vietnam
Conclusion
To resume, the best sites to find a manufacturer or a wholesaler in Vietnam are Alibaba and Global Source. You can find all kinds of products in Vietnam, almost like in China. Moreover, nowadays, prices will often be more attractive in Vietnam because of the lower cost of labor. Communicating with your Vietnamese wholesalers remains complicated as in China. That's why I recommend you to use DocShipper and our sourcing service. We will take care of finding the wholesaler that best suits your needs, and we will negotiate the best prices thanks to our multilingual team and our experience. I invite you to contact us to learn more.
