Vietnam garment export grows despite many challenges

According to the Vietnam Textile and Apparel Association (VITAS), the country has earned US$6.84 billion from garment and textile exports in the first quarter of 2017, 11 per cent more than in the same quarter last year. These figures augurs well for Vietnam textile and apparel sector which has set a target of seven per cent increase over 2016, with export earnings of over US$30 billion for the year.

The growth has come despite the garment industry is facing multiple challenges in exporting to key markets, like the European Union (EU) and the US. Currently, garment and textile products are exported to 40 countries and territories, with major markets including the US, Japan, South Korea, China and the EU. VITAS has urged manufacturers to optimise their capacity to reduce production costs and seek orders for high-quality products.

According to VITAS advisory board, export to the EU was low, with local manufacturers receiving small orders. The garment industry is yet to develop in terms of design, so most textile and garment units find it difficult to compete for export orders from this market. Further, the high import duty of 8-12 per cent in EU is also one of the obstacles facing garment exporters.

Although, the EU is the second largest export market of Vietnam’s garment products, it is only 1.9 per cent share of the total import value into the EU, according to the association.

In 2016, exports of textile and garment sector had reached US$23.8 billion, up 5 per cent year-on-year. United States was the largest market, accounting for 48 per cent of the total garment export value.