An In-Depth Look at Vietnam's Textile Industry

Together with countries such as China and Bangladesh, Vietnam remains one of the leading textile exports in the world. This country plays a significant role in this sector, and its main export destinations are the US, Europe, Japan, and South Korea. But how much is the Vietnam textile industry worth?

In 2022, the Vietnamese garment industry made $44.4 billion in exports; however, the following year, the sector experienced a turnover decline of 10% (Viet Nam News, 2024). In this regard, Cao Huu Hieu, Director of Vietnam National Textile and Garment Group (Vinatex), declared: "The industry has gone through unprecedented difficulties due to geopolitical instability and rising inflation, which led to a decline in global textile and clothing demand in 2023," (Textalks, 2024). Luckily, it now seems that the garment industry is again on the rise. According to recent data, the Vietnamese garment sector experienced a 9.62% increase in export turnover in the first quarter of 2024, earning a total of over $9.43 billion (Vietnam Briefing, 2024). 

Despite having a huge potential for cotton production, this country still imports most of this material (Vietnam Briefing, 2023). The Vietnamese garment and textile industry is, in fact, composed of three main sub-sectors. First, the upstream sector, namely fibre production. This sub-sector mostly focuses on domestic consumption as the fibre produced in Vietnam tends to be of low quality. Second is the midstream sector, which comprises fabric production and dyeing processes, and lastly, the downstream sector, in other words, garment manufacturing. The latter make up the vast majority of the apparel sector in the country, with cut-make-trim models topping the list. But what are Vietnam's main textile and garment hubs?

Vietnam's Leading Textile and Garment Hubs

While the north of Vietnam is known for electronic manufacturing, the south is recognised for its garment production, with Ho Chi Minh City being one of the country's main textile hubs. This is because this metropolis is home to the largest port in the country while being renowned for its highly skilled workforce and low-cost labour. It is here that the 2024 International Textile Garment Expo was held, attracting over 1,000 exhibitors from countries all over the world, including Belgium, Germany, Italy, Japan, and China (Nhan Dan, 2024).

However, amidst this success, it's important to analyse the conditions of the many workers employed in this sector and the sustainable policies implemented by the companies operating here to limit their impact on the environment. 

Vietnam Garment Industry and Sustainability

It is estimated that Vietnam is home to roughly 6,000 companies in the textile and garment sector, employing approximately 2.5 million people. Although forced labour and child labour have experienced a significant decline in recent years, they remain problematic issues in the country. 

In 2012, over 6,000 children and teenagers aged between five and 17 worked in the Vietnamese garment industry, mainly in cloth production's fabrication and finishing stages. Unfortunately, almost 43% of the minors working in this industry were under 15 years old, the minimum age for employment in the country. Of these, roughly 96% were female (Bureau of International Labor Affairs, 2014). According to a report by Anti-Slavery International, Vietnam should also implement stricter rules concerning workers' rights as companies here often require their employees to work over eight hours per day, the limit established by law (Anti-Slavery International, 2022). 

But what about sustainability? In 2018, the World Wildlife Fund (WWF), in collaboration with the Vietnam Textile and Apparel Association (VITAS), launched a revolutionising program called ‘Greening Vietnam’s Textile Sector Through Improving Water Management and Energy Sustainability’ (WWF, 2020). As the name suggests, this program aims to limit water and energy consumption to reduce the negative impact of the Vietnamese garment industry on the environment. Commenting on this project, Mr Vu Duc Giang, Chairman of VITAS, commented: “Vietnam ranks as the fifth largest exporter of apparel goods in the world, but our industry is more famous for low-cost production with limited environmental standards. With customers worldwide now more conscious about the environment, many global brands are forcing them to change their operations to include higher environmental and social standards. If we do not change our practices now, Vietnam could lose competitiveness.” (WWF, 2018). 

While the country seems on the right track for a greener future, much still needs to be done to improve sustainability policies and human rights laws to protect the many working in this sector. 

The History of Vietnam's Garment Industry

Even though Vietnam has a long history of clothing production, its modern textile industry began to flourish only in 1958. Following the beginning of the Vietnam War, the French started to build factories on these lands. Unfortunately, while this sector's debut seemed promising, everything had to stop with the intensification of the conflict. After the country's unification in 1976, the Vietnamese textile and garment industry finally had an opportunity for growth. But the challenges for this sector weren't over. 

During this early period, the Communist Government ruled the country and had complete control over production, limiting innovation and growth. Almost all the clothes produced in Vietnam were for domestic consumption or exported to Eastern European countries. 

In 1991, following the official collapse of the Soviet Union, the Vietnamese garment industry could finally start trading with other countries, expanding its exports. 

In 1998, Vietnam was admitted to the Asia-Pacific Economic Cooperation (APEC). A few years later, in 2001, it signed a bilateral trade agreement with the USA, further boosting its exports. Last but not least, in 2007, the country joined the World Trade Organization (WTO), marking the true beginning of the growth of its textile sector (Immago, 2022). 

As of today, Vietnam remains one of the key players in the global textile industry. Even though its environmental policies and worker conditions need further improvement, this country is fully committed to advancing this sector and will most likely remain a major global garment producer for future years.