Should You Manufacture in Vietnam? What We've Learned After 12+ Years of Sourcing There
Vietnam is one of the strongest manufacturing destinations outside of China for a wide range of consumer products, particularly in apparel, footwear, furniture, and packaging. But it is not a replacement for China, and it is not the right fit for every product. After sourcing over 10,000 products from Vietnamese factories since 2012, here is an honest look at what Vietnam does well, where it falls short, and what you need to know before you start.
In short, Vietnam works best for buyers sourcing products in industries where the country has deep manufacturing expertise, who are comfortable with longer lead times than China, and who are willing to invest more effort in finding the right factory. If your product fits, the combination of competitive costs, strong trade agreements, and increasingly capable factories makes Vietnam one of the best sourcing destinations in the world right now.
Updated February 24, 2026
Why Vietnam Has Become a Go-To Manufacturing Destination
Vietnam's rise in global manufacturing is not hype. The numbers back it up. In 2025, Vietnam's total exports reached $475 billion, with manufacturing value-added growing nearly 10%, the highest rate recorded in the 2019 to 2025 period. GDP growth hit 8.2%, and foreign direct investment in manufacturing topped $22 billion.
A few data points that matter for buyers:
Vietnam has 17 active free trade agreements, with more under negotiation. These include the CPTPP, the EU-Vietnam Free Trade Agreement, RCEP, and agreements with the UK, South Korea, and Japan. Depending on your importing country, these can significantly reduce or eliminate duties on Vietnamese-made goods. For a detailed breakdown, see our guide to Vietnam's free trade agreements.
Manufacturing wages remain well below China's. The gap has narrowed over the years, but Vietnam still offers a meaningful cost advantage for labor-intensive products.
Over 400 industrial parks are in operation across the country, with an average occupancy rate above 80%.
These macro numbers establish why Vietnam is on so many buyers' radars. But the decision to source from Vietnam is not really about export figures. It is about whether the country can produce your specific product at the quality, price, and timeline you need.
What Vietnam Does Well (and Where It Falls Short)
This is where most "why source from Vietnam" articles stop being useful. They list advantages without any honest context. After visiting hundreds of factories across Vietnam, I can tell you the picture is more nuanced than the marketing pitch.
Where Vietnam Excels
Vietnam has genuine, world-class manufacturing strength in several industries. Apparel and textiles are the most established: the country is the second-largest garment exporter globally, and factories here produce for brands like Nike, Adidas, Lululemon, and Patagonia. Furniture is another standout, with over $16 billion in exports in recent years and strong capabilities in FSC-certified wood. Footwear, packaging, bags and luggage, and home goods are all well-developed sectors.
What makes these industries strong in Vietnam is not just low cost. It is depth. There are enough factories, enough skilled workers, and enough supporting supply chains in these categories that you can find competitive options and negotiate effectively. The workforce in these sectors has decades of cumulative experience.
Where Vietnam Falls Short
No country is a one-stop shop like China, and Vietnam is no exception. Product diversity is significantly more limited. If your product requires complex tooling, advanced electronics assembly, precision metal fabrication, or highly specialized raw materials, Vietnam may not have the depth of supply chain you need.
A few specific limitations I see repeatedly:
Supply chains still rely on China. Many Vietnamese factories import raw materials, components, and machinery from China. This means you are not fully decoupled from China's supply chain even when manufacturing in Vietnam.
Infrastructure is improving, but not world-class. Ports, roads, and logistics networks have seen significant investment, but they remain a step behind China, which has one of the most efficient logistics systems in the world. Expect longer lead times.
Finding factories is harder. Vietnam lacks an equivalent to Alibaba's massive supplier ecosystem. English-language resources for finding factories are limited, and many of the best factories do not market themselves to international buyers online. For more on this, see our guide on how to find manufacturers in Vietnam and our list of the best Alibaba alternatives for sourcing in Vietnam.
Scalability can be a challenge. For niche or smaller-volume products, it can be harder to find factories willing to take on your order compared to China, where competition drives factories to accept smaller runs.
What Can Actually Be Manufactured in Vietnam?
This is the most important question for any buyer, and the answer depends entirely on your product. Vietnam's manufacturing base is concentrated in specific sectors. Here is a practical overview of the country’s strengths.
Apparel and Textiles
This is Vietnam's signature industry. From basic t-shirts to technical activewear, Vietnam has factories at every level of complexity and price point. Cut-and-sew operations are widespread, and many factories hold certifications such as WRAP, BSCI, and GOTS. If you are sourcing garments, Vietnam should be near the top of your list.
Furniture and Wood Products
Vietnam is a global leader in wooden and rattan furniture, with strong capabilities in both indoor and outdoor pieces. Many factories use FSC-certified wood and can handle custom designs. Buyers from the US, EU, and Australia source heavily from Vietnamese furniture factories.
Footwear
Vietnam is the second-largest footwear exporter in the world. Capabilities range from athletic shoes to fashion footwear to industrial boots. Major global brands manufacture here, and the supporting supply chain for soles, uppers, and components is well established.
Bags, Luggage, and Leather Goods
A growing sector with strong factory capabilities, particularly in Ho Chi Minh City and Binh Duong Province. Both synthetic and genuine leather goods are produced at scale.
Packaging and Printed Materials
Paper packaging, corrugated boxes, printed labels, and rigid packaging are well-served in Vietnam. Several factories have invested in modern printing and finishing equipment.
Where Vietnam Is Still Developing
Electronics assembly has grown significantly thanks to Samsung, Foxconn, and other multinationals. Still, this capacity is mostly tied up in large-scale FDI projects rather than available to small and mid-size buyers. Complex machined metal parts, advanced plastics, and highly technical products remain areas where China (or other destinations) may be a better fit.
For a more detailed breakdown by product category, see our full guide on what products can be sourced in Vietnam.
How Vietnam Compares to China for Sourcing
Nearly every buyer exploring Vietnam is also comparing it to China, so here is a brief, honest comparison.
China has unmatched product diversity, faster lead times, a more developed supplier ecosystem, and decades of experience working with international buyers. If your product can be made in China and you do not have a specific reason to look elsewhere, China is often the path of least resistance.
Vietnam's advantages over China are real but specific: lower labor costs for the right products, a favorable trade agreement network that can reduce duties in your home market, a more open environment for foreign investment, and reduced concentration risk if you are building a China+1 strategy. Vietnam is arguably the best "plus one" option available.
The biggest mistake I see buyers make is assuming Vietnam operates the same way China does. The process of finding factories, negotiating, and managing production is different. Vietnamese factories are generally less aggressive in pursuing foreign orders, response times can be slower, and platforms like Alibaba are not effective for finding Vietnamese suppliers. For a detailed comparison, read our Vietnam vs. China sourcing guide.
What to Know Before You Start Sourcing From Vietnam
If you have decided Vietnam could be the right fit, here are practical points from our experience working with thousands of clients.
Visiting Factories Matters More Here
In China, you can often get reasonably far with remote communication and samples. In Vietnam, factory visits carry more weight. They help you evaluate capabilities firsthand, build relationships with factory management, and avoid the surprises that come with limited online information. We recommend visiting before placing a first order whenever possible. Our guide to visiting factories in Vietnam covers everything from visa logistics to what to expect on the factory floor.
Expect a Longer Timeline
From initial supplier search to first production shipment, sourcing from Vietnam typically takes longer than from China. Budget extra time for finding the right factory, sample development, and production. If you are on a tight timeline, factor this in early.
Trade Agreements Can Save You Real Money
Vietnam's 17+ FTAs are a genuine competitive advantage, but the benefits depend on where you are importing goods into. Buyers in the EU, UK, Canada, Australia, Japan, and South Korea often see significant tariff reductions. Tariff rates change regularly, so always check the latest rates applicable to your product and importing country before making sourcing decisions based on duty savings.
Working With a Sourcing Partner Changes the Equation
Vietnam's fragmented factory landscape makes working without local support significantly harder than in China. A sourcing company with an on-the-ground presence can identify factories you would never find online, negotiate effectively in Vietnamese, manage quality control, and handle the logistics complexities of manufacturing in a still-developing market.
Cosmo Sourcing // Your Team on the Ground in Vietnam
Cosmo Sourcing has been helping businesses source products from Vietnam since 2012. With a local team based in Ho Chi Minh City and over a decade of experience working with thousands of clients across 10,000+ products, we know the Vietnamese manufacturing landscape better than anyone in the industry.
We work on a transparent, flat-fee pricing model, not commissions, which means our incentive is to find you the best factory, not the one that pays us the most. A typical project includes quotes from 2 to 6 vetted factories, direct introductions to manufacturers, sample management, quality control, and logistics support.
Whether you are sourcing your first product from Vietnam or diversifying an existing supply chain away from China, we can help you navigate the process and avoid the common mistakes that cost buyers time and money.
Get in touch: Email: info@cosmosourcing.com Visit: cosmosourcing.com/contact-us