Why should companies consider Vietnam as their sourcing destination and not somewhere else in Asia?

There are a number of key advantages that make Vietnam stand out from the rest of Asia. Unlike many other countries in the region, Vietnam’s government is very stable and committed to seeing the country grow. Consumer confidence is strong and improving. Additionally, domestic consumption is predicted to increase 20 percent per year, thus creating a strong local market for foreign products.

Labor costs are currently 50 percent of those of China and around 40 percent of those reported in Thailand and the Philippines. The country’s workforce is seeing an annual increase of 1.5 million people, and its workers are young and, increasingly, highly skilled.

The country also has improving infrastructure and remains a low cost manufacturing hub that provides good financial incentives to foreign companies. An abundance of natural resources is also helping to fuel the manufacturing boom in the country. Additionally, general costs of doing business, such as rent and utilities, are among the lowest in Southeast Asia.

Importantly, Vietnam is a member of ASEAN, the Association of Southeast Asian Nations, which is an incredibly significant market with a combined population of over 600 million people and a combined GDP of about US$2.1 trillion.

Finally, with its strong connections both in the Asia region and in the West, Vietnam is well positioned for any company pursuing a “China +1” strategy.