In recent years, Vietnam has emerged as one of Southeast Asia’s biggest recipients of international investment. The benefits here come from both financial and demographic factors. Vietnam is now firmly established as a center for global manufacturing thanks to the restructuring of its industrial sector. Global events and problems with supply chains have also helped Vietnam by educating international businesses about the value of diversifying supply networks. Vietnam sourcing has become popular as the country has emerged as a top location for manufacturing expertise in Southeast Asia because of its production capabilities and advantages in shipping, cheaper labor costs, and production prices.
Why choose Vietnam sourcing?
Vietnam is now a popular location for manufacturing because of both outside factors and nation-specific traits. Some of the main advantages of selecting Vietnam for your manufacturing activities are listed below.
Production capabilities – Vietnam is renowned for producing a large number of textiles and apparel. Manufacturing of increasingly sophisticated goods, including machinery, consumer electronics, communications equipment, and automobile parts, has significantly increased in recent years.
Low cost of labor – Because of Vietnam’s affordable labor, major corporations in the textile and electronics sectors have moved a lot of production there. In addition to labor costs being on par with China’s on average, salaries also grow more slowly. Many product sourcing companies’ decisions to forgo relocations altogether or to shift only a portion of the production is also influenced by shipping charges and the maturity of the current supply networks.
Huge workforce – Vietnam’s population is anticipated to rise significantly during the next ten years, whereas other South Asian nations’ populations are likely to decline or just slightly increase. Vietnam now has a population of over 98 million people, and by 2030, that number is expected to rise to almost 106 million. Consequently, this will increase the labor pool, which presently includes 56% of the population. At an average age of 32, the population of Vietnam is likewise youthful.
Tax exemptions – In accordance with Vietnam sourcing, a recent directive from the government helps Vietnamese manufacturers deliver raw materials to the industrial sector. Companies whose businesses have been negatively impacted by the pandemic will get financial support from the tax savings that will arise from the decree’s execution. It will also increase the government’s credibility when changing tax rules and processes, making Vietnam’s economy more competitive overall. The Vietnamese government expects its manufacturing sector to satisfy 45% of local production and consumption needs by 2025.
Vietnam is one of the Asian countries that has benefited the most from foreign investment and is now a major manufacturing hub. Many product sourcing companies are looking to manufacture here as a result of external factors, worldwide supply chain disruptions, and country-specific advantages. Manufacturers of textiles and furnishings have long been drawn to Vietnam.
Multinational corporations now put up factories to produce more modern goods, including machinery, electronics, and telecommunications gear. As businesses want to diversify and implement business plans, Vietnam will certainly witness a considerable increase in investment.
