In recent years, Vietnam has been regarded as an emerging world factory globally, particularly in the apparel and textile sectors. However, Vietnams development stagnated in 2023, especially in its once-proud textile and garment exports. According to Mr. Nguyen Cao Phuong, Production Manager of Viet An Garment Company, the industry is currently facing unprecedented challenges. With 30 years of experience, he notes that the current difficulties are the most severe in history. Vietnamese textile factories are compelled to purchase designated raw materials from China, a requirement typically imposed by European and American buyers. Yet, the bulk of the profits are captured by European and American merchants, while China and Vietnam receive only minimal benefits.

Vietnams garment manufacturing follows three primary models: CMT (Cut, Make, Trim), FOB (Free On Board), and ODM (Original Design Manufacturer). Most Vietnamese companies adopt the CMT model, producing goods using materials specified by their partners. According to research by FPTS Securities, the profit margin for this model is only 1-3%, the lowest in the value chain. Approximately 65% of Vietnams garment exports are CMT orders, 30% are FOB, while ODM accounts for just 5%.

Ms. Hoang Linh, a factory manager with five years of experience at a fashion company, points out that global brands almost never allow manufacturers to choose their own material suppliers. Brands typically ensure that raw material suppliers adhere to environmental and social responsibility standards to avoid scandals. If manufacturers are permitted to source their own materials, they must hire independent auditing firms for verification—a process that can take months and conflicts with tight production schedules.

目前，越南紡織與服裝出口大幅下降，企業(yè)失去了市場優(yōu)勢。Nguyen Thi Xun Thuy，一位擁有20年產(chǎn)業(yè)研究經(jīng)驗(yàn)的專家，指出這些產(chǎn)業(yè)涵蓋了為制造業(yè)提供原材料、零部件的一系列產(chǎn)業(yè)。經(jīng)濟(jì)一體化推動(dòng)了該行業(yè)走向CMT模式，以充分利用越南最大的優(yōu)勢——廉價(jià)勞動(dòng)力。然而，這導(dǎo)致了行業(yè)的增長停滯，盡管出口量穩(wěn)步增長。

據(jù)《Tuoi Tre》報(bào)道，越南西貢最大的紡織公司之一Garmex Saigon過去雇用了近4000名工人，現(xiàn)在只剩下37人，主要是因?yàn)閹讉€(gè)月來未收到任何訂單。截至2023年9月30日，Garmex Saigon員工數(shù)量從2022年底的近1900人減少至僅37人，從2021年底的3700多人大幅減少。總經(jīng)理Nguyen Minh Hang女士表示，由于沒有訂單，公司僅靠服務(wù)業(yè)務(wù)勉強(qiáng)維持。

As the worlds second-largest garment exporter, Vietnam may face an 8% to 10% decline in textile and apparel exports this year. According to the General Statistics Office of Vietnams Data and Events report, textile exports have encountered severe challenges since the fourth quarter of 2022. From January to September 2023, Vietnams textile exports amounted to $25.51 billion, a 12.1% year-on-year decrease. Exports to the U.S. fell by 18.3%, to the EU by 13.1%, and to ASEAN by 10.5%.

One of the primary reasons for the decline in Vietnams textile exports is the global economic downturn, particularly shrinking demand in traditional markets like the U.S., EU, and Japan. Additionally, European and American clients are shifting orders to regions with more favorable geographical locations and lower labor costs, such as Central America and Africa, to reduce transportation and labor expenses. Meanwhile, markets like the EU are imposing stricter green and environmental requirements on imported textiles, along with stringent quality and sourcing standards, further complicating exports.

The EU is considering implementing an Extended Producer Responsibility (EPR) system for textiles. Once enacted, this system will pose greater challenges for Vietnams textile exports. It will require producers to take responsibility for environmental impacts throughout the product lifecycle, potentially increasing compliance costs and procedures for Vietnamese textile firms.

Amid this complex market environment, the Vietnam Textile and Apparel Association (VITAS) predicts that export difficulties will persist until early 2024. A senior official from VITAS stated that textile and apparel exports in 2023 may drop to $4.0–4.1 billion, down from $4.4 billion in 2022. Although signs of recovery emerged in the second half of the year, the year-on-year decline in textile and apparel exports for the first nine months of 2023 narrowed from 17% in the first half to 13.5%.

VITAS officials anticipate that textile and apparel exports next year may improve compared to 2023. However, due to the global economic slowdown, consumers in Vietnams largest export markets—the U.S., EU, Japan, and South Korea—are tightening their budgets, putting pressure on the industry. A lack of orders has forced many export-oriented garment factories to scale back production or shut down entirely.

Overall, the challenges facing Vietnams textile and apparel industry reflect shifts in the global economic environment and evolving international market demands. Vietnam must adjust its industrial structure and development strategies to adapt to these changes and identify new growth opportunities.