Innovation and development

The domestic textile and garment sector has grown into one of Vietnam’s key export earners in the past couples of years. The sector’s total export value has been increasing steadily year-on-year (sees chart). The country raked in $28.3 billion from textile and garment export in 2016, from a mere $7.78 billion in 2007, nearly a four-fold increase after a decade. Significantly, the textile and garment sector grew 5.2 per cent last year against 2015, placing Vietnam among top 7 countries in textile and garment export.
In the past years, Vietnam has intensively invested in developing the textile and garment sector, and an associated supporting industry. Developing the supporting industry has been made one of the sector’s top development priorities, from there enabling the country’s to gradually become self-reliant in local supply sources, reduce import volumes while bolstering the product added values. In the meantime, Vietnam has constantly applied latest science and technology progress into modernizing the sector’s development. Accordingly, up to 90 per cent of the garment sector’s equipment has been modernized and upgraded. For instance, the garment sector has bought cutting-edge machines and technologies from the US, EU, Japan and South Korea (such as Germany’s Heinz Walz automatic screen printing machines, Korea’s hi-speed dye-sublimation colour printing machines, or Japan’s multi-head computerized embroidery machines, among others), helping to boost the product added values.

‘Miss Vietnams’? No they are garment workers contributing to Viet Nam’s rapid economic development and growth. The country raked in $28.3 billion from textile and garment export in 2016.


Consequently, many businesses in the sector have been granted internationally recognized certifications (ISO 9002 and ISO 9001:2000) for their production and quality management systems such as the state-owned textile and garment conglomerate Vinatex, Hanoi Textile and Garment Corporation, Thang Long Garment JSC, Garco 10, Viet Tien Garment Corporation, to name but a few.
Consequently, many brands like Garco 10, Viet Tien Garment, Dong Xuan Knitwear, Thai Tuan Silk or An Phuc Shirt have not only stood firmly in the domestic market, but have also built a good reputation in foreign markets.
According to AFP, Vietnam has been appraised by international experts as a role-model with a healthy and well-disciplined textile and clothing industry which offers a comparative wage level. The world’s leading fast fashion giants like Zara, Mango and H&M most have their products made in Vietnam. Tara Rangarajan, Better Work director under the International Labour Organization (ILO) said that a wage-cut race does not exist in Vietnam as exploiting the labourers is just a short-term policy to reduce the production cost.
“Vietnam wants to remain competitive in the long-haul in many other aspects rather than just the low-cost workforce. The country, therefore, has made constant efforts to improve its regulatory system,” she said. In fact, Vietnam has been alluring to foreign customers although its labour-cost triples that of Bangladesh.

South Korea – Potential market of Vietnamese textiles and garments
South Korea is dubbed as the “Asia’s fashion kingdom”. Korean government’s open-door policy has attracted a multitude of global fashion brands to the country. Made-in-Vietnam textile and garment products, by virtue of their peculiarities, have been increasingly favoured by Korean consumers, though just winning a small market segment. Vietnam has become the textile and clothing supplier enjoying the fastest growing export volumes in Korean market. South Korea accounted for more than 10 per cent of Vietnam’s textile and garment export market share in 2016. The products most favoured by Korean consumers are coats and jackets, suits, men’s and women’s trousers.
In light of the Vietnam-South Korea Free Trade Agreement (VKFTA), Korean importers will enjoy a zero per cent tariff when importing Vietnamese textiles and garments instead of the previous import duty from 8 to 13 per cent. Made-in-Vietnam products have met strict requirements set out by developed countries (such as those regarded product origin, etc), so that it will also meet Korean standards.
By contrast, Korean businesses will have the opportunity to push up export of garment accessories to Vietnam. The export value of this kind of products to Vietnam serving Korean businesses operating in the country has increased continually in the past time. Korea is providing nearly 20 per cent of fabric to Vietnam’s garment sector, only behind China. Vietnam’s textile and garment sector has been using large volumes of Korean machines and technological processes. The VKFTA is, therefore, expected to provide an impetus for Korea to boost export of garment machineries, accessories and materials to Vietnam, a field Korea has advantages but Vietnam is lacking.
Vietnam and South Korea share many historical and cultural affinities. Both are oriental nations which have inherited on a selective basis the quintessence from other cultures to build up local distinct ones. The similarity is of great importance as it helps Vietnam and Korea integrate into the world economy on their own way that also fits the global development trend.

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