Asia's Rising Manufacturing & Sourcing Powerhouse

Insights into Vietnam

Vietnam has emerged as one of the world's most competitive manufacturing and sourcing destinations, combining low production costs, a skilled workforce, and rapidly modernising infrastructure. Strategically positioned in Southeast Asia, Vietnam now accounts for a significant share of global exports across textiles, electronics, furniture, and footwear. For businesses looking to reduce reliance on Chinese supply chains, sourcing from Vietnam offers a compelling combination of quality, cost, and reliability.

The Country

With a history spanning more than a thousand years, Vietnam has long been a cultural and trade hub in Southeast Asia. Over the past four decades it has transformed into one of the region's fastest-growing economies. From the historic streets of Hanoi in the north to the cosmopolitan energy of Ho Chi Minh City in the south, Vietnam blends deep cultural heritage with modern dynamism.

Vietnamese people are celebrated for their strong work ethic and craftsmanship. With around 29% of university students studying STEM fields (28.7% in 2021), Vietnam's young population is fuelling manufacturing capability and technological innovation.^[1] Our guide on working with Vietnamese people covers everything you need to know.

The Economy

Vietnam has established itself as a manufacturing powerhouse and a credible alternative to China for global sourcing. Robust GDP growth, a pro-business regulatory environment, and sustained foreign direct investment have driven significant export expansion across electronics, textiles, and consumer goods.

Manufacturing accounted for about 24% of GDP in 2024, roughly double the world average.^[2] Labor costs typically run 30-40% lower than in China on a wage basis (2025 estimates), making Vietnam especially competitive for labor-intensive production.^[3] Vietnam's key economic facts provide a solid foundation for any sourcing decision.

Key Industries

Vietnam's exports grew 17% in 2025 to about $475 billion, and processed and manufactured goods made up $421 billion of that. The United States remained Vietnam's largest export market.^[8] Vietnam's manufacturing base spans textiles, electronics, furniture, footwear, automotive parts, and eco-friendly goods.

Logistics

Vietnam's logistics infrastructure has advanced rapidly. With 296 listed seaports (2023) and 22 civil airports^[17], the country efficiently connects manufacturers to international buyers. FedEx and DHL investments support fast, reliable shipments to the US, Europe, and beyond.

Pricing Edge

Vietnam's factory labor costs are typically 30-40% lower than China's on a wage basis (2025 estimates)^[3], making it especially competitive for textiles, electronics assembly, and furniture. Our article on 7 compelling reasons to source from Vietnamese factories covers the full picture.

The standard corporate tax rate is 20%, with preferential rates as low as 10% for qualifying projects,^[4] and 17 free trade agreements covering about 60 markets, including the EU, UK and ASEAN, boost competitiveness.^[5] Australian buyers benefit from AANZFTA duty-free access, in a trading relationship worth A$28.5 billion in 2024-25.^[6] Understanding MOQs in Vietnam factories can significantly improve your margins

Tariffs

The global tariff landscape shifted dramatically in 2025-2026. US tariffs on Chinese goods rose sharply, accelerating the shift toward Vietnam as a primary sourcing alternative. Vietnam's US exports more than doubled between 2018 and 2022 while China's stayed broadly flat.^[7] Just as important for importers, Vietnam's network of free trade agreements gives Australia, New Zealand, Canada, the EU and the UK duty-free access to Vietnamese goods.

Vietnam's tariff exposure remains substantially lower than China's. Our 2026 Vietnam Sourcing Roadmap offers a 12-month execution plan to lock in capacity. Australia and New Zealand buyers can explore AANZFTA duty-free access. Choosing between them matters: AANZFTA, CPTPP and RCEP all reach zero duty on most finished consumer goods but differ on rules of origin and paperwork, and the 2025 Second Protocol to AANZFTA changed how origin must be proved. For a full analysis, see sourcing from Vietnam vs China.