Vietnam manufacturing as a new Eldorado for your product ?

Low labor cost

Low labor cost is one of the main reasons many buyers source from Vietnam. $2.99 ​​per hour in Vietnam , compared to $6.50 per hour in China, represents the average income in Vietnam in 2021. This undervaluation of labor is due to the scarcity of skills. Indeed, if the manufacture of the products requires a lot of manpower, collaborate with a partner on the Vietnamese market, you will be profitable.

Vietnamese government support

The Vietnamese government’s commitment to a diversified economy has contributed to the development of trade, especially in the manufacturing sector. Measures such as infrastructure development, international free trade agreements, tax breaks, education, and training contribute to business growth. Thus, the market presents a favorable climate for business growth, which can attract new international investors to contribute to the development of the country.

Government Growth Plan

On this infrastructural plan, many advances are noted on the railroads, road and maritime, it is the case of the city of Hanoï and all around the south. Training and education measures for the acquisition and diversification of skills in order to boost the market and to be in line with the skills demanded on the world market. In addition, a light tax policy that attracts potential international investments. This tax incentive contributes to the development and construction of the country. For example, a low tax rate, or even a tax exemption, can be granted to companies wishing to build Vietnamese soil and participate in the growth of the country’s economy. In the same vein, 12 free trade agreements will be signed in 2021 and in particular a trade agreement between the United States and Vietnam signed since 2001. These partnerships, or even agreements, facilitate the acquisition of raw materials, the export of goods in the world. Below are important agreements that have impacted business growth in Vietnam: ASEAN (Association of Southeast Asian Nations) and RCEP (Regional Comprehensive Economic Partnership).

Commitment to a green industry

By 2050, the Vietnamese government aims to reduce carbon emissions and become greener in relation to the growth of industrial activities. To this end, a commitment has been made to the sustainable development of manufacturing. The benefit of this commitment encourages manufacturers to use and implement cleaner and more environmentally friendly manufacturing measures. Moreover, these ecological policies are attracting more and more companies concerned about their image and the environment.

Find a reliable partner

Finding the right partner is a complex task. Thus, many factors must be taken into account, especially when your search is international access. Already, it is essential to know the cultural values, the social, economic and political issues of the country where you want to do business. But also to know the strengths and weaknesses of your partner’s company in order to avoid any surprises.

Attention

If your product requires technological input. It is important to also focus on this point when looking for partners, because in Vietnam, not all suppliers have state-of-the-art technological equipment. It is undoubtedly that China excels more than Vietnam at the international level. And this thanks to its technological capacity and its diversified skills. The only downside of the Vietnamese market comes from its inability to meet all the needs of the international market, especially those requiring a technological touch.

Relatively affordable logistics costs

Vietnam has an advantage on its geographical border position with China, which is known for its marketing activities. This advantage facilitates your imports from Vietnam. In addition, the RCEP (Regional Comprehensive Economic Partnership) agreement removing many barriers and reducing tariffs, the cost of supply remains relatively affordable.

Weak infrastructure and bureaucracy

Areas such as infrastructure and bureaucracy present disadvantages for the expansion of manufacturing industry and general business development. Because most of the infrastructures are out of step with international standards. In addition, the administrative tasks remain complex, even cumbersome. Although small advances are observed, these points are an integral part of your decision. Because they risk impacting your deadlines, or even your entire supply chain.

Conclusion

Vietnam is quickly becoming a new manufacturing hub in the world, offering quality resources and labor at incredibly competitive prices to businesses looking to expand. With its young population, low labor costs and strategic location, Vietnam has become a major player in the global economy.

Manufacturing in Vietnam can be a great opportunity for businesses to reduce costs while increasing production and product quality. Many large-scale multinational companies are now setting up factories in Vietnam, taking advantage of the country’s low corporate tax rates, easy access to global markets, and growing consumer base. Additionally, the Vietnamese government provides incentives for businesses to invest and produce in the country.