Exploring Vietnam's key import and export industries with the rise of China+1

Vietnam has emerged as a rising star in the global economy¹, experiencing remarkable growth and transforming into a major manufacturing and export hub. This transformation is partly driven by the China+1 strategy, where businesses are diversifying their supply chains and reducing their reliance on China. Vietnam's young and dynamic workforce, favorable government policies, and strategic location have made it an attractive destination for foreign investment and manufacturing relocation.

This article delves into Vietnam's leading import and export industries, examining the factors driving their growth and the opportunities they present for businesses considering relocation in the context of the China+1 strategy. We also explore how DHL Express, with its comprehensive logistics solutions and expertise in cross-border trade, can support businesses in navigating Vietnam's dynamic trade landscape.

Export champions: Unveiling Vietnam's key export industries

Vietnam's export sector has experienced remarkable growth, contributing significantly to the country's economic development. Several key industries have emerged as export champions, showcasing Vietnam's manufacturing prowess² and its ability to compete in the global marketplace.

• Textiles and garments: Vietnam has established itself as a major player in the global textile and garment industry, supplying a wide range of apparel and textile products to international brands and retailers. The sector benefits from Vietnam's competitive labor costs, skilled workforce, and extensive network of textile and garment factories.
• Electronics and components: Vietnam's electronics industry has experienced rapid growth, driven by the presence of major international companies such as Samsung, LG, and Intel. Vietnam has become a key manufacturing hub for electronic components, smartphones, and other consumer electronics, contributing significantly to its export earnings.
• Footwear: Vietnam is a leading producer and exporter of footwear, supplying a substantial portion of the global market. The country's footwear industry benefits from its skilled labor force, competitive manufacturing costs, and access to raw materials.
• Machinery and equipment: The export of machinery and equipment is gaining traction in Vietnam, reflecting its growing industrial capacity and technological capabilities. This sector encompasses various products, including industrial machinery, agricultural equipment, and construction machinery.
• Other notable exports: Vietnam also boasts a diverse range of other notable exports, including agricultural products such as coffee, rice, and seafood, as well as wood products, plastics, and other manufactured goods.

These export industries not only contribute to Vietnam's economic growth but also create employment opportunities, attract foreign investment, and enhance the country's position in the global value chain.

Import essentials: Fueling Vietnam's manufacturing engine

As Vietnam's manufacturing sector expands, so does its demand for essential imports, which fuel its production lines and support its growing economy.

• Machinery and equipment: The high demand for imported machinery and equipment reflects Vietnam's focus on upgrading its manufacturing capabilities and investing in advanced technologies. This category includes a wide range of products, from industrial machinery and production lines to construction equipment and transportation vehicles.
• Raw materials: Vietnam relies on imports of raw materials, such as textiles, plastics, and metals, to feed its manufacturing industries. These raw materials are transformed into finished goods that are then exported to global markets, contributing to Vietnam's export-oriented economy.
• Electronics components: The electronics industry in Vietnam is heavily reliant on imported components, such as semiconductors, displays, and integrated circuits. These components are used in the assembly of finished electronic products, such as smartphones and computers, which are then exported to international markets.
• Fuel and energy: As Vietnam's economy grows, so too does its demand for energy. The country imports a significant amount of fuel and energy resources, such as crude oil and coal, to power its industries and infrastructure.
• Consumer goods: With a growing middle class and increasing disposable incomes, Vietnam is witnessing a rise in imports of consumer goods. This includes a wide range of products, from food and beverages to electronics and fashion items, catering to the evolving needs and preferences of Vietnamese consumers.

These import essentials play a crucial role in supporting Vietnam's manufacturing sector, fueling its economic growth, and meeting the demands of its growing consumer market.

Seizing the opportunity: Why businesses are choosing Vietnam

Vietnam's emergence as a manufacturing and export powerhouse has captured the attention of businesses worldwide. Several key factors are driving this interest and making Vietnam an attractive destination for foreign investment and relocation.

• China+1 diversification: The China+1 strategy³, which encourages businesses to diversify their supply chains and reduce their reliance on China, is a major factor driving investment in Vietnam. Businesses are seeking alternative manufacturing locations to mitigate risks associated with geopolitical tensions, trade disputes, and rising labor costs in China. Vietnam, with its stable political environment, favorable investment policies, and competitive labor costs, has emerged as a prime beneficiary of this trend.
• Favorable investment climate: The Vietnamese government has implemented various policies and initiatives to attract foreign investment and create a conducive business environment⁴. This includes offering tax incentives, streamlining regulations, and actively pursuing free trade agreements with key partners. These efforts have made Vietnam an attractive destination for businesses seeking to establish or expand their operations in Southeast Asia⁵.
• Competitive labor costs: Vietnam's labor costs⁶ remain competitive compared to other manufacturing hubs in the region, such as China and Thailand. This cost advantage, combined with a young and growing workforce, makes Vietnam an attractive location for labor-intensive industries, such as textiles, footwear, and electronics manufacturing.
• Strategic location: Vietnam's strategic location in Southeast Asia provides businesses with access to key markets and shipping routes. The country's extensive coastline, well-developed port infrastructure, and proximity to major shipping lanes facilitate efficient and cost-effective transportation of goods.

These factors, combined with Vietnam's stable political environment and growing economy, make it an ideal location for businesses seeking to expand their global footprint and capitalize on the opportunities presented by the China+1 strategy.

DHL Express: Your partner in Vietnamese trade

Navigating the complexities of international trade can be challenging, especially in a dynamic market like Vietnam. DHL Express, with its extensive global network and expertise in logistics, is your trusted partner in facilitating seamless and efficient import and export operations.

We offer a comprehensive suite of services tailored to the needs of businesses operating in Vietnam, including:

• Express shipping: Our international shipping services ensure fast and reliable delivery of your goods, connecting you to major markets worldwide.
• Customs brokerage: Our customs brokerage experts can handle the complexities of customs clearance on your behalf, ensuring the types of commodities in your shipping comply with all regulations and are processed efficiently.

By partnering with DHL Express, businesses can leverage our expertise and resources to navigate the challenges of import-export trade, streamline their logistics operations, and enhance their competitiveness in the global marketplace. Our commitment to customer satisfaction, combined with our innovative solutions and global reach, makes us the ideal logistics partner for businesses operating in Vietnam.

Ready to optimize your trade operations and unlock your business potential in Vietnam? Open a DHL Express business account today and experience the difference.