Textile VN competition from neighboring

From the clothes sold in the country to export, VN is facing increasingly fierce competition tranhngay by neighboring countries such as Cambodia, Laos and Myanmar.

The export turnover of textile industry in 2015 reached about $ 27 billion and plans to launch this year will increase by about 10%. But recently, in addition to the rise of emerging markets such as Bangladesh, Cambodia, the export orders shifted spread to Laos, Cambodia make enterprises (companies) anxious.
Orders fled VN
Vu Duc Giang, chairman VN Textile Association, said textile industry is facing many challenges, particularly the many small and medium enterprises to close down due to loss of competitiveness and production conditions extremely difficult emergency. Many customers have moved down the line to Myanmar and Laos by these countries have tax incentives to export goods to Europe and America. Meanwhile, garment export tax on VN average American is 17%, exports to the EU is close to 10%. If you want to drop to 0%, you should wait until the Agreement Trans-Pacific Partnership (TPP) is done and come as early as 2018. The cost in these countries would also be more competitive. In particular, labor costs in the textile industry VN lowest less than USD 200 / person / month, in Cambodia, only labor cost from 100-120 USD / person / month. This also occurred in Laos similar or Myanmar. Besides, the cost of space rental and other costs during activities such as social insurance, union … countries are lower than VN. So, along with the tax advantages of exports to major markets such as the US, the EU, the orders are pouring in these countries tends to increase.
Pham Xuan Hong, Chairman of the HCM City Textile embroidery knitting, further analysis: Many enterprises with foreign investment before have built factories in VN is now expanded investment in Cambodia. Also Myanmar is emerging as a new market and low costs should also be more new plants go into operation. “The consumption of textiles in the major markets such as the US, EU and Japan are declining since the end of Q1 so far, along with the competition from the new market, many companies have orders decreased and even some companies are not enough to make all your goods 2. in particular, Cambodia and Myanmar are the formidable new rival in the segment produced in accordance with the large number of orders, lower average values which so far has received VN . Therefore if there is any change, many domestic enterprises will be difficult to survive, “Pham Xuan Hong said.
The “Made in Cambodia” more
Not only is competition for export orders, even in the domestic market, products from Cambodia, Laos also began to penetrate more and more. Ms. Phan Thanh Hai (District 3, HCMC) has nearly ten years experience “hit” the “si” (used goods) including clothing, shoes, handbags, carpets … from Cambodia VN said, two years ago, Ms. Hai navigation “beat” every brand and clothing exports from Cambodia to VN sold to the market from south to north, mainly children’s clothes. In the ASEAN region, Walmart customers mainly come from the US line-ordering of children in Cambodia. So children exports in HCMC also mostly “made in Cambodia.” Exports from Cambodia price range be 1.5 – 1.8 million / 100 coat while in the wholesale purchase price of up to 2.5 million VN / 100 females. Even this price is now higher than last year from 30-35% due to the market demand is increasing. Ms. Hai said: “The prices of these companies are often cheaper compared to only 2/3 of VN products should be how much all that much. In particular, exports from Cambodia to buy the products guaranteed to be “genuine” should be more comfortable. ” Similarly, Mr. Binh, who specializes in buying and exports dropped connections in Saigon Square shopping district (City) said, the “nature”, the good prices, many sellers if pimping, street strings, like “beat” every other party (Cambodia – PV). If additional transport costs, export from Cambodia still more profitable to buy while shopping in the longer easily confused VN goods “phony”. But according to some clues specialized reviews from Cambodia clothing line, just call via Phnom Penh, 2 days after the restaurant had, freight per sign. Average $ 1.8 / kg for every 100 kg event. If the amount of up to 300-500 kg, freight rates fell to $ 1.6 / kg.
Avoid cheap labor strategy
A strategic consultant of the Group Robenny recommends: VN not be regarded as the country’s cheap labor compared elements of labor productivity, discipline … so do not take that element the “strengths” to compete in ASEAN. The current reality in the country and commodity exports were competing with cheap primarily because emerging markets. So cheap labor strategy is the strategy for the countries began to develop and VN avoid this path. Myanmar, an emerging market, will be formidable opponents in the competition of cheap labor, but what we need is the improvement of labor productivity, investment environment, learn from Singapore, Thailand, Indonesia in revenue foreign investment and not look at the Laos, Cambodia … that comparison. For example, Singapore is regulated foreign investors in Singapore have committed to hire senior personnel are Singapore; Indonesia recently launched program of government commitment, resolve investment licenses for foreign investors with a door policy, within 3 days.
Mai Phuong – Former Russian