What are the advantages of importing from Vietnam compared to China?

When it comes to importing, China is often the first choice. However, many other Asian countries also offer good opportunities, although most lack experience importing from them.

Amid the US-China trade war, with higher tariffs on Chinese goods, can we find lower costs and new opportunities in other Asian markets? To explore this, I invited a long-term client, founder of complianceGATE, to share his perspective.

A long-term client and I have known each other for a long time; we met in 2015 when he was helping companies import from Vietnam. Now, he's focused on product certification for the European and American markets.

A long-term customer: I've been visiting Vietnam monthly since late 2017 to better understand the situation there and identify opportunities for our customers. This was because we saw increased interest from our customers in other manufacturing countries in 2017. That said, the supply is quite limited.

Among our clients, so far, the only ones who import clothing, polyethylene tarpaulins, and laser-cut stainless steel tools. The furniture sector is also important in Vietnam, but many of the materials are imported from China.

Our customers also import from India and Thailand, but their volume is relatively small. China remains the primary manufacturing destination for our users, followed by Vietnam.

A long-term client: Last year, we worked on a new type of pillow with a client who had a factory in Ho Chi Minh City. They did a good job, but when manufacturing the samples, they had to order a lot of materials, including foam and Velcro, from China. This resulted in rather long lead times and no real cost savings. However, the factory was good, and our client enjoyed their visit to Vietnam.

The fact that many nationalities don't need a visa to visit Vietnam also makes the country more accessible, as they can simply hop a plane to visit factories. In the case of China, processing a visa can take several weeks.

Another case involved a steel tool. This type of steel, from a high-end steel brand based in the EU, is readily available in China. However, when they wanted to manufacture prototypes in Vietnam, the supplier had to import the steel sheets from Singapore.

Vietnam's main advantage is that it's not China. With the escalating trade war, this is a big problem for American companies, but other importers simply don't want to work with Chinese suppliers. They assume it's easier elsewhere, even though that's not true.

That said, there are many good Vietnamese factories in these categories:

1.Textiles
2. Furniture
3.Handicrafts
4.Accessories
5. Bags
6. Construction products (e.g. tarpaulins)

Electronics are also a major export for Vietnam, but don't expect to find a huge ecosystem of OEM electronics suppliers like the one you find in Shenzhen.

Export figures are driven primarily by multinationals like Samsung and LG, and they're obviously not interested in small startup projects. But I predict this will change in the next 5 to 10 years.

A long-term client: I'd say these sourcing companies are very valuable in Vietnam, as long as they operate transparently and give you access to the factory. It's quite difficult to access supplier information in Vietnam, where Alibaba.com or other B2B directories aren't as well-known.

Believe me, you really need to consider Alibaba and GlobalSources when looking for suppliers in Vietnam. It's quite opaque, which is good for large companies that basically build their own factories, but not so easy for smaller buyers who rely on existing factories.

The other option is to work directly with a factory, which often requires you to visit it first.

I've found that most Vietnamese factories aren't as accustomed to handling online communication as those in China, probably because Chinese factories have been on Alibaba for a long time.

A long-term customer: You can find some Vietnamese factories on platforms like Alibaba and GlobalSources. However, Vietnam doesn't have similar local websites for finding suppliers, making it difficult to buy directly from Vietnamese factories, especially for buyers unfamiliar with the local market.

The lack of centralized and accessible directories similar to Alibaba creates significant barriers. Buyers often have to rely on sourcing agents, industry networks, or even on-site visits to identify reliable suppliers and establish trusted contacts.

A long-term customer: The main problem with Vietnam, at the time of writing, is that you may not find factories for your product. Let's take watches as an example. I tried to find suppliers there, but I didn't find a single one. Not a single factory!

If you're big enough, you can invest a few million dollars to build your own factory, but smaller buyers can't.

So, whether you can source from Vietnam really depends on what product category your brand focuses on and whether there are factories for that.

Aside from that, you'll encounter the same challenges as elsewhere. Vietnam is neither better nor worse than China in terms of quality risks.

A long-term customer: Again, the key is whether there are factories for your product in Vietnam. If you're in the textile industry and can meet minimum order quantity requirements, Vietnam could be a good option.

This also applies to certain types of jewelry, furniture, and handbags.

But if you're buying electronics, watches, plastic toys, or a variety of other products, you'll find it more difficult, if not impossible, to find existing factories in Vietnam.

It all simply depends on your product.

A long-term customer: For the record, I have much less personal experience with India than with Vietnam. For starters, I haven't been to India. But we have customers who rely on reliable suppliers who manufacture products in these categories:

* Textiles
* Stainless steel products (mainly jewelry)
* Bags

A major advantage of Indian suppliers is that they speak English as a first or second language. This greatly facilitates communication. Furthermore, there are numerous established Indian factories with decades of experience and a strong tradition of quality.

A long-term client: Yes, we provide them with directory listings of suppliers in Vietnam and help them manage the process, including quality inspections in Vietnam, laboratory testing (which is still done in China), and shipping from major ports, including Ho Chi Minh City and Hai Phong outside Hanoi.

We get a lot of questions about production in Vietnam these days, and not just from Americans, but it depends on whether there are factories for your product or not.

This may change in a few years, but for now, most people must choose between not launching a product or buying it from a Chinese factory.

That said, the general process is the same. The technical specifications and quality control process must be correct, regardless of whether you're purchasing from China, Vietnam, or India.

We hope this interview can give you some inspiration on how to import from Vietnam and make your import business easier.