Vietnam has rapidly transformed into one of the world’s key players in the apparel sector with a rich history that is deeply rooted in the art of textile craftsmanship. In recent years, Vietnam has proven its strong capabilities to have emerged as a rising star in the apparel business throughout the world.
Fashion brands are getting attracted to Vietnam as a reliable sourcing hub due to its strategic location, competitive labor costs as well as its technological advancement and innovation. Vietnam’s textile and garment sector is poised for growth with a robust commitment to sustainability and a drive for continuous improvement last year 2022. But the year 2023 seems not to be as expected same to previous year rather experiencing declutching growth and passing a tough time. However, the century is preparing itself to come out from the stagnant situation in the coming year 2024 to boost up the sector’s growth.
The growth of Vietnam’s apparel export
The year-on-year growth in the apparel exports in the country stepped towards a many-fold success in 2022 when apparel exports soared to approximately $44 billion. This marked a 14.7% year-on-year increase, solidifying the Southeast Asian nation’s position as a formidable global garment exporter.
But at the beginning of 2023 the month of January and February, exports dipped by 19.6%, reaching $4.548 billion. The decline and negativity in the apparel sector was little blow of shacking for the country’s ability to overcome ongoing challenges.
Vietnam’s textile and garment exports are expected to fall 5.0%- to 6.3% to between $40.5 billion and $41 billion in year 2023 because of the continued weak global apparel demand.
Textiles-related exports fell 13.5% for the first nine months of the year 2023, a slight improvement from the 17% drop in the first half.
According to VITAS Vietnam Textile and Apparel Association, the four biggest importers of Vietnamese textiles and garment in 2023 are the US with a turnover of over 11 billion USD, Japan about 3 billion USD, the Republic of Korea 2.43 billion USD, and the EU 2.9 billion USD.
But Textile and garment export was expected to be US 44 47 billion in 2023 at begging of the year.
On the contrary, the footwear export data was reported at 16.443 USD bn in Oct 2023. This records an increase from the previous number of 14.698 USD bn for Sep 2023.
Reasons for declining growth in Vietnam’s apparel Export
Due to the lack of orders, numerous garment and textile companies have been compelled to reduce their production and lay off thousands of workers throughout the year.
Speaking at a press conference announcing a coming conference reviewing the association’s performance in 2023, VITAS Chairman Vu Duc Giang said that this year, Vietnam’s textile and apparel industry sees many major challenges including the global impact of the COVID-19 pandemic and large inventory due to falling demand.
“Despite the decline in exports, the export turnover is still considered a breakthrough demonstrating great efforts of the business community,” Giang said, adding that in 2023, Vietnamese textile and garment products entered 104 countries and territories – a record number of markets.
The Vietnam National Textile and Garment Group (Vinatex) said that though forecasts had been made early, its members were still surprised at unpredictable changes in 2022 such as the Russia-Ukraine conflict and surges in oil prices, inflation, and interest rates, which have caused demand to nose-dive in importing markets.
Global inflation and the decrease in the purchasing power of major Western countries have created pressure for Vietnamese enterprises to find solutions to diversify export markets and promote new markets.
Mr. Vu Duc Giang assessed: “The global purchasing power decreased, the textile and garment industry’s decrease was still less than the leather, footwear, and wood industries, etc. The processing enterprises will be more affected. Exporting enterprises that are proactive in raw materials will be less affected.”
In addition, many textile and garment enterprises face capital difficulties. The textile and garment industry is recommending to the government.
“Regarding bank interest rates, it is suggested that for some industries with large export impacts, job creation and large labour such as textiles and garments, banks should consider keeping a reasonable interest rate to encourage businesses to maintain production”, Mr. Vu Duc Giang said.
2024 Vietnamese Textile & Garment Export Target Set At $40bn
Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS) at a press conference informed that the Vietnamese textile and garment industry has set a target of exporting textiles and apparel amounting to US $44 billion for the next year.
According to Giang, Vietnam exported textiles and clothing to 104 countries and regions in the 2023 which including several non-traditional markets like Russia and countries of Africa so the ambitions of the textile & garment export target that set as $40bn is quite practical
