In Southeast Asia’s dynamic market, Chinese enterprises are gaining significant ground. The general manager of a Hangzhou-based sporting goods company recently told media, “Our business in Southeast Asia is growing rapidly, with orders from Vietnam multiplying several times compared to last year.” However, this surge comes at the expense of local businesses, as seen in Hanoi’s suburbs, where Nguyen, a textile factory owner with 12 years of experience, faces mounting challenges.
Nguyen recently received news from a long-term client that their spring-summer orders would shift to a Zhejiang-based supplier, citing a 12% lower quote and a 10-day faster delivery time. Reviewing his accounts, Nguyen found that over the past six months, he lost seven major clients, accounting for 30% of his factory’s total orders. The hum of machinery in neighboring factories has also quieted, with Vietnamese peers voicing frustrations on social media. This scene reflects a broader shift in the textile industry.
Data from the Vietnam Textile and Apparel Association reveals that in Q1 2025, 23 small and medium-sized textile enterprises in Vietnam shut down. However, the orders shifting to Chinese firms are not merely a result of low-cost competition but stem from comprehensive solutions emphasizing efficiency, stability, and customization.
Beyond Cost: China’s Full-Chain Advantage
Vietnam’s textile industry relies on China for 55-60% of its raw materials, while China boasts a 98% self-sufficiency rate in chemical fibers. This integrated supply chain translates into significant cost and efficiency advantages. According to Euromonitor International, Vietnamese firms face 12-15% higher raw material procurement costs and an average delivery cycle 20 days longer than their Chinese counterparts.
Moreover, the orders flowing to China are not low-end products. Euromonitor’s survey indicates that 61% of orders redirected to China involve mid-to-high-end home textiles and functional fabrics, surpassing Vietnam’s traditional strength in basic materials. In Ho Chi Minh City’s Binh Tan Industrial Zone, the impact is palpable. Kim Min-cheol, a manager at a Korean-invested textile firm, told *Vietnam Economic Times* that a European client of eight years transferred a 2-million-piece outdoor apparel fabric order to a Nantong, Jiangsu-based company. The client cited China’s ability to deliver samples in 7 days and complete orders in 25 days, compared to Vietnam’s minimum of 35 days, compounded by risks of raw material import delays.
Vietnam’s Response and Industry Collaboration
The order losses are a wake-up call for Vietnam’s textile sector, prompting government action. The *Textile Industry Upgrading Plan (2025-2030)* aims to boost Vietnam’s chemical fiber self-sufficiency to 50%. However, industry experts note that achieving this target will be challenging, given that China took 20 years to reach its 98% self-sufficiency rate.
Meanwhile, collaboration between Chinese and Vietnamese textile industries is deepening. A report from the Guangdong Textile Association highlights that 32 Chinese textile firms have established supporting industrial parks in Vietnam, offering “one-stop services.” This model reduces costs for Vietnamese firms while expanding Chinese market share, reflecting not just order capture but the ability to deliver reliable solutions.
More Than Low Costs
Vietnam’s labor costs are roughly one-third of China’s, and land rents are one-quarter, suggesting Chinese firms lack a clear edge in pure cost competition. However, global brands increasingly prioritize efficiency, stability, and customization—areas where China’s integrated solutions outshine Vietnam’s current capabilities.
For Chinese textile firms, capturing orders is just the beginning; upgrading to high-value products is the goal. The shift of orders from Vietnam is part of a broader global supply chain restructuring, pushing Chinese textile firms toward higher-value segments. For Chinese businesses aiming to expand overseas, this presents not just challenges but significant opportunities.
Sources: Textile Fabric Platform, CCTV Finance, Observer Network, and others.