China Vs. Vietnam Manufacturing and Sourcing // The Complete Pros and Cons Guide
Vietnam has positioned itself as the strongest alternative to China for product manufacturing. After over a decade of sourcing in both countries, I can tell you firsthand that the decision between them is rarely black-and-white. At Cosmo Sourcing, we have helped over 4,000 clients source more than 10,000 products, and a growing share of that work now involves Vietnam. This guide breaks down the real differences between these two countries based on what I have seen on the ground.
I like to think of China as a giant, mature corporate behemoth and Vietnam as a scrappy, promising startup growing fast. China remains the world's manufacturing epicenter, and whenever Vietnam is mentioned, it is inevitably compared to China. That comparison is fair. But Vietnam punches well above its weight. Vietnam is the third fastest-growing economy globally and is expected to continue growing for over a decade. It boasts a business-friendly environment with minimal bureaucracy and has been attracting a substantial influx of factories, particularly since the US-China trade war intensified.
Why Manufacturing Is Moving From China to Vietnam
The world's biggest brands are opening factories in Vietnam. Apple, Samsung, Nike, Adidas, LG, and Foxconn have all either shut down factories in China or opened new ones in Vietnam. The US-China trade war imposed significant tariffs on Chinese goods, and Vietnamese products remain far easier to import. Annual exports from Vietnam to the US have been growing at 20-30% per year.
This is not limited to massive corporations. Many small and mid-size companies I work with at Cosmo have recognized the cost advantages. Vietnam is now Nike's largest manufacturing country, producing over 50% of Nike's footwear globally. Vietnam is also the largest source of Adidas footwear, accounting for 39% of production compared to just 14% from China. Apple produces AirPods in Vietnam. Samsung shut down a Chinese factory to open a new one in the country. Electronics manufacturing has increased by over 300% in recent years, and Vietnam's economy has been growing at 5-8% annually.
Three Ways to Approach Vietnam Sourcing
In my experience, companies approach Vietnam sourcing in three ways: first, as a primary sourcing destination. Second, as a backup, maintain qualified Vietnamese suppliers as a contingency. Third, as part of a China + Vietnam dual-sourcing strategy, you source the same or similar products from both countries simultaneously. There is no one-size-fits-all approach, and at Cosmo, we help clients with all three scenarios.
Where Vietnam Wins
Lower Labor Costs
Vietnam's primary advantage is labor cost. The average cost of hiring a factory employee can be as little as one-third of China's, especially near major Chinese cities where the average daily salary approaches $30. The minimum wage in Vietnam can be as low as $125 per month in some regions, while in many Chinese cities it exceeds $350 per month. In some Chinese cities, hiring workers for less than $500 per month is not possible. The output and quality of Vietnamese factories are identical to those of Chinese factories in the industries Vietnam specializes in. Wages in Vietnam are rising as well, and young talent frequently changes jobs to boost their earning potential, but the gap remains significant in labor-intensive manufacturing.
Young, Skilled Labor Force
Vietnam has one of the youngest labor forces globally, with over 60% of its 95 million population between 18 and 60. On average, Vietnam's workforce is seven years younger than China's. These workers handle high-level technical tasks, semiconductor fabrication, and smartphone assembly for brands like Samsung and Apple.
Business-Friendly Environment
Vietnam has lifted restrictions on foreign ownership of production facilities across several key industries and relaxed rules on foreign investment in many more. Investors find it easier to set up factories, establish shipping logistics, and complete company registration in China than in other countries. If you are considering owning your manufacturing capabilities, Vietnam is significantly more attractive than China. Having worked in both countries, I have often felt pushback from China when trying to source and do business. In Vietnam, I feel welcomed. The government establishes industrial zones with tax incentives and actively reduces bureaucratic hurdles. Vietnam is also a core member of ASEAN and has signed hundreds of trade agreements with countries worldwide to facilitate exports.
Free Trade Agreements and Tariff Avoidance
While China faces increasing tariffs, Vietnam's government is proactive in pursuing free trade agreements with the EU, South Korea, ASEAN, and Russia. It has a bilateral trade framework with the US, signed in 2007. For US importers, sourcing from Vietnam means avoiding the tariffs that have affected hundreds of billions in Chinese goods.
Competitive Shipping
Vietnam has a 3,200-kilometer Pacific coastline with dozens of large seaports. Ocean freight to the US takes 3-4 weeks, similar to China, and prices are near-identical. Vietnamese shipping companies are competitive, and many offer door-to-door services, shipping directly to your US warehouse from the factory. Shorter shipping times are a significant advantage over other low-cost countries such as India and Bangladesh, where products might take twice as long. Northern Vietnam is only 800 km from Shenzhen, so raw materials can move between the two countries in as little as a day if your factory hits a shortage.
Where China Wins
The One-Stop Shop
China remains unmatched for product selection. If it can be made, it can be made in China. No other country can offer this. When I source from Vietnam, the first question I ask is "Can it be made here?" When I source from China, the first question is "What price can I buy it for?" That difference tells you everything about where each country stands.
Scalability and Flexibility
In China, you can order almost any quantity. Smaller buyers can make a small purchase to test an idea, then scale to almost any size. In Vietnam, MOQs are often higher, and suppliers are less flexible. It is common practice when sourcing a new product to place a small order to test the market and then place a larger order when you are ready to commit. While this is still possible in Vietnam, it is not as easy as in China. I had a client who needed 2,000 custom shirts. I contacted several Vietnamese factories that produce millions of T-shirts annually for H&M and Uniqlo, but they could not shift production for a smaller order. China has such enormous capacity that tens of thousands of factories exist in a single city. When one cannot meet your needs, you drive to another in the same district. In Vietnam, scaling production for a unique product is significantly more challenging, and you may encounter delays if demand exceeds supply.
Raw Materials and Infrastructure
China has better access to raw materials because its government and businesses aggressively source them globally. China mines roughly 70% of the world's rare earth elements and controls approximately 90% of global rare earth processing and refining. Factories have their back-end supply chain in place, so as a sourcing company, we only communicate with the end manufacturer. When sourcing from Vietnam, it is common to find separate suppliers for materials and finished goods. This is beneficial for supply chain transparency. We recently sourced high-end Italian wool for apparel in Vietnam, giving the client full control over material quality rather than relying on the factory's word.
China has also invested trillions in what may be the world's best manufacturing infrastructure: the largest ports, a freight rail network spanning the country, and cheap electricity. Vietnam's logistics network is decent but falls short. Vietnam is modernizing with billion-dollar investments in highways and seaports, but the gap is real today.
China's Growing Challenges
Tariffs have affected hundreds of billions in Chinese goods, and the trend is not reversing. Beyond tariffs, base costs rise every year due to rising wages and stricter environmental regulations. China has moved away from being the "cheap" manufacturing base it once was. Some estimates suggest the average wage in Chinese manufacturing cities doubles every five years. Meanwhile, countries like Vietnam are actively signing free trade agreements to avoid tariffs.
China's bureaucracy is massive and ever-changing. Foreign ownership is possible but can take years and often requires joint ventures with Chinese partners. The government favors Chinese citizens in disputes. Counterfeiting remains the biggest concern I hear from clients. China is notorious for stealing designs, ignoring patents, and sometimes cloning entire businesses. For FBA sellers, it is not uncommon for a Chinese supplier to identify where a product sells and hijack the listing. There is also the concept of chabuduo, roughly "close enough," which is common in Chinese manufacturing. You may get a sample made of one material and the final product made of another.
Industries Where Vietnam Competes or Leads
Footwear is the clearest example. Vietnamese footwear exports exceeded $23 billion in 2024, and the broader leather and footwear industry hit $27 billion. Vietnam produces nearly three times as much Adidas footwear as China, and over half of all Nike shoes are now made in Vietnam. The quality is identical, if not better, and labor costs are lower. Textiles and clothing are a $30 billion export industry growing at 10% annually, with luxury brands like Prada manufacturing bags in Vietnam. Vietnam's luggage and bag industry also recorded 3.5% annual growth. Electronics is Vietnam's top export sector, reaching $126.5 billion in 2024, up over 300% since the trade war began. Furniture is another strong category: Vietnam ranks as Asia's second-largest furniture exporter and fifth-largest wood exporter globally, with over 4,500 wood production companies.
The Trade War and Vietnam's Advantage
The trade war has been one of the biggest economic boosters for Vietnam. Thousands of companies closed Chinese factories and moved to Vietnam. Some reports even surfaced of manufacturers relocating Chinese products to Vietnam and rebranding them as Vietnamese to lower import tariffs. While a complete mass exodus from China is unlikely, given its scale, most companies looking to relocate manufacturing in Asia consider Vietnam first. At Cosmo Sourcing, we established our Ho Chi Minh City office in 2014 to get ahead of this trend, and demand for Vietnam sourcing has grown every year since.
Building a Vietnam Sourcing Strategy
If you are already sourcing from China, a backup strategy is to replicate your supply chain in Vietnam. Obtain quotes, compile a detailed list of qualified suppliers, and update it regularly. When tariffs, shutdowns, or regulations shift in China, you pivot without disrupting your business. Having backup suppliers in Vietnam is not something only large companies do. It is increasingly common with companies of all sizes, including smaller FBA sellers. A robust supply chain is essential for companies seeking to deliver reliable customer service, and diversification is the best way to mitigate risk.
Many multinationals and larger-volume sellers I work with have adopted a China + Vietnam dual-sourcing strategy, buying the same products from both countries simultaneously. By leveraging the strengths of each country, you hedge against significant changes in either one. When tariffs were imposed on China, these companies shifted production to Vietnam without affecting sales or supply chains. This started in clothing and footwear but is expanding rapidly to other industries. Even if you are manufacturing in China with no plans to move, assessing the Vietnamese landscape is valuable. At a minimum, a qualified list of Vietnamese suppliers provides a backup plan if conditions change suddenly.
One thing that catches first-time Vietnam buyers off guard is the pace of communication. At Cosmo, we budget up to two weeks from when we send RFQs to Vietnamese factories and follow up aggressively. In China, we post requests and wait for suppliers to respond. Most Vietnamese factories lack dedicated sales teams, so engineers handle inquiries as a secondary role. Understanding this difference is critical to managing expectations.
Cosmo Sourcing, Your Sourcing Partner in Vietnam and China
Cosmo Sourcing has been helping clients source from Vietnam since 2014 and from China since 2012. We are one of the few sourcing companies established in both countries, which means we can help you compare options, run dual-sourcing strategies, or fully relocate your supply chain. Our services cover everything from product spec sheets to supplier validation, sampling, inspections, freight forwarding, quality assurance, and shipping.
We have helped Fortune 500 companies, brick-and-mortar stores, FBA sellers, and brand-new businesses. Whether you are starting fresh or diversifying an existing supply chain, do not hesitate to reach out. Contact the Cosmo Sourcing team at info@cosmosourcing.com.