Vietnam is expected to establish a fashion industry materials and accessories exchange by 2025, a move that could significantly reshape its textile and footwear sectors. This initiative, promoted by the Ministry of Industry and Trade, aims to reduce reliance on outsourcing and enable Vietnam to better control its fashion supply chain.
Economic Impact and Export Growth
The creation of this exchange could have a profound economic impact on Vietnam. Currently, textiles and footwear are major export industries, with an annual growth rate consistently exceeding 10%. In the first half of 2024 alone, these industries generated nearly $30 billion in export revenue, accounting for 16% of Vietnam’s total exports.
Pham Tuan Anh, Deputy Director of the Department of Industry under the Ministry of Industry and Trade, emphasized the importance of these industries: “The textile and footwear sectors create around 5 million jobs, representing 22% of Vietnam’s industrial workforce. This exchange could further increase these figures.”
Economists predict that localizing raw material procurement within the next five years could boost Vietnam’s GDP by 15-20%. If the current growth trend continues, this could result in an annual GDP increase of 1-2 percentage points.
Enhancing Global Competitiveness
Vietnam is already a key player in the global fashion industry, ranking as the world’s second-largest footwear exporter and the third-largest textile exporter. The proposed exchange could further solidify this position.
Dr. Linh Nguyen, an economist at the National University of Hanoi, stated: “By controlling more of its supply chain, Vietnam can offer faster turnaround times and potentially lower costs. This could make Vietnam a more attractive manufacturing destination compared to competitors like Bangladesh or India.”
The exchange could also provide international brands producing in Vietnam with more convenient access to materials, potentially attracting more high-value contracts and foreign direct investment (FDI).
Challenges and Risks
However, the path to establishing this exchange is not without challenges. A significant obstacle is Vietnam’s current reliance on imported materials, particularly from China, South Korea, and other ASEAN countries.
Supply chain expert Tran Van cautioned: “Shifting from established import relationships to local procurement must be managed carefully. If the transition is not smooth, there could be short-term disruptions.”
Another concern is the potential reaction from key suppliers. China, in particular, may view this move as a threat to its exports and could take countermeasures.
Ensuring that locally produced materials meet international standards in terms of quality and variety will be critical to the success of the exchange.
Regional Economic Impact
The exchange could have varying impacts across different regions of Vietnam. Traditional textile hubs such as Ho Chi Minh City and Hanoi are expected to benefit greatly, but the plan also opens up opportunities for the development of new industrial clusters.
Nguyen Thi Mai, a regional development planner, said: “We are exploring the possibility of establishing specialized zones across the country. For example, the central region could focus on natural fibers, while the northern region could specialize in technical textiles.”
This regional specialization could lead to more balanced economic development across Vietnam, potentially reducing the economic gap between urban and rural areas.
The proposed exchange represents a bold step for Vietnam’s fashion industry. If successful, it could transform Vietnam from a manufacturing-centric country into a more integrated and influential player in the global fashion supply chain. However, careful planning and execution will be critical to overcoming challenges and fully realizing the potential benefits of this initiative.
Key Areas of Focus for Investors:
- Potential growth for local textile and accessories manufacturers
- Opportunities in logistics and supply chain management
- Changes in foreign direct investment patterns
- Impact on existing import/export businesses
- Emerging demand for quality control and certification services
- Potential for new industrial real estate development
- Increased demand for skilled labor in the textile and design industries
- Opportunities for technical solutions to support the exchange’s operations
