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Be wary: Rapid growth in Vietnam manufacturing is eating into the Chinese market! How can we do?


Although many people have the poor and uncultured impression to Vietnam, factually Vietnam manufacturing has came into our life.


According to Japanese media, GoerTek Inc, electroacoustic industry leading enterprises and main supplier of Apple accessories, plans to switch its production line to Vietnam.

GoerTek asked the suppliers that if all the production materials and parts could be sent to Vietnam directly. Besides, the original price and delivery time should be maintained.

GoerTek has told Apple its plan, but the final decision has not been made. Further discussion is needed.

Data shows that GoerTek is the Chinese domestic leading manufacturer majoring in acoustic component, VR, and robots.

Decision of GoerTek shows the difficult position of Apple and its component suppliers.



Made in Vietnam


In 2009, Nike’s Vietnam foundry fully transcended Chinese production. Nowadays, the output of Nike and Adidas about 50% comes from Vietnam and 20% from China.




In April 2008, Uniqlo declared that Chinese output switched to Southeast Asian. 40% of the total production would be accepted by Vietnam. Benefits from the transfer of industrial chain, Vietnam, its footwear exports in 2017 reached $18 billion, has became the second largest footwear exporter after China.

Not only foreign brands, attracted by the cheap labor force, many shoe, hat and clothing enterprises that had roots in Guangdong and Fujian provinces in China have set off a boom in moving factories to Vietnam.


Nanxuan, a Chinese garment enterprise specialized in sweater and knitwear production is going to expand their production in Vietnam. In 2015, the factory was built and started production in the suburbs of Ho Chi Minh City, Vietnam. The main supplier of Nanxuan is the Japanese fast-selling company that operates the clothing chain “Uniqlo”.


Bosideng, a Chinese manufacturer and marketer of down jackets, will also expand production in southeast Asia. With the capital cooperation relationship with ITOCHU Corporation in Japan, Bosideng began pilot production at a textile factory in Vietnam related to ITOCHU Corporation, and plans to further expand production based on production trends.

Reason of transfer is simple that Vietnam labor costs can be nearly 60 percent cheaper.




Not only low-end


Vietnam is not just taking on China's low-end industries.

In May 2018, Samsung and Olympus closed their respective Shenzhen factories and moved to Vietnam. Besides, Microsoft moved Nokia's Beijing plant to Hanoi. Intel is also throwing $1 billion in the Saigon Hi-Tech Park and plans to put 80% of its global chip capacity here.


Vietnam is trying to become the new manufacturing center of global electric industry. In 2017, Vietnam’s mobile phone exports reached US$45 billion, and one-tenth of the world’s smartphones were produced in this Southeast Asian country. Mobile phone has also become the number one product made in Vietnam.

According to statistics from the General Statistics Office of Vietnam, mobile phones and their parts and components continue to be the main export products of Vietnam in 2017, reaching a record high of US$45.1 billion.




Exports of mobile phones and their components rose 31.6 percent from the same period in 2016. Mobile phones and their parts and components accounted for 21% of the country's total exports, making a positive contribution to Vietnam's export value of 213.77 billion US dollars this year, a record high.


China exported about $120 billion in mobile phones in 2017, compared with $45.1 billion in Vietnam, which is equivalent to 37.5% of China.


This has to be taken seriously.




Trade friction, Vietnam gains?


Who benefits from the trade friction?

In addition to the previous labor costs, the trade friction will increase the cost of tariffs on China as an opportunity for southeast Asian countries represented by Vietnam.

Vietnam’s import and export volume is expected to reach 239 billion U.S. dollars in 2018. We must know that China’s exports in 2017 were 2,235.522 billion U.S. dollars, while Vietnam’s population is less than 8% of China’s population. This year’s exports may reach or approach 10%.

Countries in Southeast Asian are also developing rapidly.


We often think that we are the first in the whole industry chain of categories in the world, and that skilled workers are endowed with advantages. However, we forget that this is only a decade or so away, and it is not much worse to give others more than a decade. Besides, the population and industrial structure of southeast Asia have changed a lot.






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