Tag: vietnam sourcing

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Looking for manufacturers in Vietnam? In this guide, we give you a high-level overview of what to expect when manufacturing products in Vietnam – and how the country compares to China on many aspects, such as pricing, MOQ, lead times, and more.

Overview

• How has COVID-19 impacted manufacturing in Vietnam?
• Sourcing suppliers in Vietnam using Alibaba.com
• Sourcing suppliers in Vietnam using Globalsources.com
• What kind of products can I import from Vietnam?
• Importing private label products from Vietnam
• Dropshipping products from Vietnam
• Are Vietnamese factories cheaper than Chinese suppliers?
• Are Vietnamese suppliers easier to work with?
• Quality Inspections in Vietnam
• Lab testing in Vietnam
• Minimum Order Quantity (MOQ) Requirements in Vietnam
• Primary industrial cities and clusters
• Shipping & Ports
• Visas for visiting suppliers
• Trade Shows in Vietnam (Pre-COVID 19)

How has COVID-19 impacted manufacturing in Vietnam?

Vietnam closed its borders in early 2020 as the COVID pandemic was taking hold all over the world. However, the country remained open internally which allowed its manufacturers to continue operating as usual.

A larger outbreak occurred in the summer of 2021 which did impact manufacturing in Vietnam – but a fast vaccine rollout starting in August the same year allowed the country to open up faster than almost anyone expected.

Sourcing suppliers in Vietnam using Alibaba.com

There are multiple supplier directories in Vietnam. Yet, Alibaba.com is the largest online supplier directory for those looking for Vietnam-based factories. Alibaba.com has a dedicated section for Vietnamese suppliers, and they are becoming increasingly prominent when searching for many product types.

Alibaba.com allows users to filter suppliers based on country. Thus, you can decide to limit your sourcing to Vietnamese suppliers only.

Alibaba.com also verifies all Gold Suppliers, including those based in Vietnam. Thus, they provide one of the few reliable sources of supplier data in the country, including the following:

• Company name
• Registered address
• Legal form
• Registration No.
• Issuing Authority
• Date of issue
• Applicant name
• Applicant job title

Sourcing suppliers in Vietnam using Globalsources.com

Globalsources.com also has Vietnamese suppliers listed in their directory. However, the number of suppliers is far lower than on Alibaba. Some of them also attend the Globalsources trade shows in Hong Kong.

Despite having relatively few suppliers from the country, Globalsources.com does actually provide more data on Vietnamese suppliers than anyone else does:

• Registered Address
• Incorporation date
• Legal form
• Registration No.
• Authorized Capital
• Paid-Up Capital
• Legal Representative
• Import & Export License Status
• Business Scope

The business scope, legal representative, and registered capital (i.e., paid-up capital) is important to know when selecting a supplier.

Other Supplier Directories

Then there are the local supplier directories. I have never used these myself, but they could perhaps be of interest:

• Vietaz.com
• Vietnamesemade.com

I still feel that Vietnamese suppliers have some catching up to do when it comes to making themselves accessible online.

What kind of products can I import from Vietnam?

Vietnam’s manufacturing base is not as large as that of China. However, it’s possibly a strong second in Asia, when it comes to OEM production. If you are importing products in one of the following product categories, then Vietnam might be a good manufacturing destination:

• Apparel
• Home textiles
• Luggage & Bags
• Furniture
• Packaging & Printing
• Promotional Products & Gifts
• Food & Agricultural Products
• PVC Plastic
• HDPE & LDPE Plastic
• Tarpaulins
• Wood Products
• Hair Extensions

Vietnam is also becoming a manufacturing center for electronic products. However, the electronics industry in the country is largely concentrated on multinationals like Samsung, or major contract manufacturers such as Foxconn. You will likely be disappointed if you expect to find a large number of private-label electronics manufacturers like you can i Shenzhen, in China.

Importing private label products from Vietnam

Vietnamese factories are, generally speaking, accustomed to working with professional buyers and international brands. These companies have their own product designs and technical specifications and do not attempt to source “ready-made” products.

I think this also explains why private labeling is not common among Vietnamese manufacturers, which are more geared towards OEM.

This may change in a number of years when some of these OEMs decide to launch their own domestic brands, that then become regional and in some cases global brands. This is also what happened in China in the last 10 to 20 years.

Private labeling is part of this development, as it relies on existing tooling.

Dropshipping products from Vietnam

Dropshipping as a concept emerged from traders based in Guangdong province and Hong Kong in the late 2000s. However, we have not seen this take hold in Vietnam and I don’t think it ever will.

If anything, many of the Chinese companies operating as dropshipping suppliers are now focused on selling B2C to consumers in Vietnam and elsewhere in Southeast Asia.

Are Vietnamese factories cheaper than Chinese suppliers?

Labor costs are lower in Vietnam, compared to China. However, lower labor costs only have a serious cost impact at a macro level – which certainly matters to big businesses like Foxconn and Samsung.

However, this does not automatically translate into lower unit costs for small to medium-sized importers buying products from Vietnam.  For starters, wages are increasing in Vietnam as a result of high demand from major brands. Some contract manufacturers that set up in Vietnam in recent years have been forced to double salaries – and offer bonuses on top of that – to attract enough workers.

Further, there are other costs that impact the unit price, such as logistics costs (keep in mind that materials are often shipped from China) and electricity.

The calculation is different for US importers though, as the China tariffs are still in place and must be factored in.

Are Vietnamese suppliers easier to work with?

The assumption is that “Chinese factories are difficult” so Vietnamese factories must therefore be easier to work with. While I certainly admit that there are communication difficulties when dealing with Chinese factories, I don’t think you should expect things to be that different when dealing with Vietnamese suppliers.

Further, oftentimes issues are more about the complexities of manufacturing rather than anything else. Manufacturing is difficult, be it in China, Vietnam, or even Europe.

Quality Inspections in Vietnam

There are many quality inspection companies present in Vietnam – many of which are based in Hong Kong or Mainland China. The standard cost per inspection is normally around 300 to 400 USD, which is comparable to other countries in the region.

Here is a list:

• Sofeast
• Pro QC International Ltd
• Quality Control Inspections Vietnam
• Vietnam Quality Control
• OFCO Group
• AS International
• Vinacert
• QIMA

Lab testing in Vietnam

In recent years we’ve seen a significant number of companies setting up lab testing facilities in Vietnam. Some are operated by TUV SUD, SGS, Eurofins, and other major testing companies – while others are more local operations.

Here’s an overview:

• Quatest 3
• SGS Vietnam
• UL VS Vietnam
• TÜV SÜD Vietnam
• Intertek Vietnam
• Modern Testing Services Vietnam
• Eurofins Vietnam
• Kotiti Vietnam
• CTC Vietnam
• DT & C Vina

There are still instances in which we cannot find a suitable testing facility in Vietnam. In these situations, the product samples can be sent to a facility in China, Europe, or the United States instead. Lab testing doesn’t necessarily have to take place in Vietnam simply because the products are manufactured there.

Minimum Order Quantity (MOQ) Requirements in Vietnam

Vietnam is a smaller country than China, which automatically translates into lower MOQ requirements – right? Not exactly.

Since the trade war really took off in 2018 there’s been a soaring demand for Made in Vietnam products.  Vietnamese factories were not known for offering lower MOQs before 2018, and have since had even less of an incentive to offer lower MOQs.

If you cannot reach at least 500 to 1000 pcs per SKU and color you may not be able to find a suitable supplier in Vietnam. There are of course exceptions, but this is generally what you will encounter when looking for suppliers.

Primary industrial cities and clusters

In many Asian countries, it tends to be the southern parts that dominate economically. Vietnam is no exception, where Ho Chi Minh City (also known as Saigon) is the nation’s economic and manufacturing center.

There are also large industrial areas in the north. Especially in, and around, the capital Hanoi and the port city of Hai Phong.

Click on the map below to get a better understanding of the geography of Vietnam

Shipping & Ports

As mentioned, Vietnam’s economic center is in the southern parts, making up 70% of all exports. Saigon New Port is naturally the largest container terminal in the country. That said, there are suppliers all over Vietnam, from north to south.

If you start importing goods from Vietnam, it’s likely that your cargo will pass through one of the following ports:

• Hai Phong Port (North)
• Da Nang (Central)
• Saigon New Port (South)
• Cai Mep International Terminal (South)

Freight Forwarders

You can find information about shipping companies in Vietnam on this page. Here is a list of companies:

• Saigon Ocean
• Royal Cargo
• Head Way
• JAS Vietnam
• Logistics Network Vietnam
• T&M Forwarding
• Tien Phong Trade and Transporting Services
• APT International
• Fast Delivery International
• Toll
• Agility
• AIT Worldwide Logistics
• Crane Worldwide Logistic

Air Freight

Most air freight cargo passes through Noi Bai International Airport in Hanoi, and Tan Son Nhat International Airport, in Ho Chi Minh City.

All major freight forwarders and air couriers, such as DHL and FedEx, are present in Vietnam. Further, there is no difference in terms of shipping and customs process, compared to other countries.

Visas for visiting suppliers

Many nationalities can receive a visa stamp on arrival, which allows you to stay in the country for 2 weeks. You can also apply for a business visa if you intend to stay for up to 3 months.

Before you can apply for a business visa you will need to obtain an invitation letter from the company you intend to visit.

Trade Shows in Vietnam (Pre-COVID 19)

As mentioned, Vietnamese manufacturers and wholesalers are not as accustomed to using online supplier directories are their competitors in Mainland China. If you’re serious about sourcing products in Vietnam, you might want to attend one of the following trade shows:

Textiles & Accessories

• Saigontex
• Vietnam textile & garment expo
• Vietnam International Maternity, Baby & Kid Fair
• Vietnam International Jewelry Exhibition Fair

Furniture & Home

• VIFA Expo
• VIETNAMWOOD

Electronics

• NEPCON Vietnam
• The Solar Show Vietnam
• Wire & Cable Vietnam

Materials

• Complast Vietnam