Vietnam’s Textile and Garment Advantage in 2025: Key Insights for Global Businesses

Vietnam has firmly established itself as one of the world’s leading textile and garment exporters, playing a pivotal role in the global textile and garment industry and ranking just behind the top producers. But what makes Vietnam more than just a low-cost alternative? And how can international companies leverage the Vietnamese textile and garment sector while avoiding common sourcing pitfalls?

With its rapid growth and dynamic development, manufacturers and sourcing managers need an up-to-date overview of the industry. This article highlights key insights from FVSource’s Vietnam Textile & Garment Production Capabilities White Paper 2025, showing why Vietnam deserves a central role in your global sourcing strategy.

A Brief History of Vietnam’s Textile and Garment Industry

Vietnam’s textile and garment sector has a rich history spanning over 4,000 years, with traditional weaving and handicraft techniques forming the foundation of the early industry. The modern industrial textile sector began around 120 years ago with the establishment of the Nam Dinh Textile Factory in 1898.

After 1954, a number of factories were established in northern Vietnam. The country’s garment industry took shape after 1976, primarily to fulfill processing contracts for the Soviet Union, producing an estimated 10–15 million items annually with an export value of around 100 million rubles per year.

A major turning point came with the Đổi Mới reforms in 1986, which opened Vietnam’s economy to global trade. By 1987, buyers and investors from Korea, Hong Kong, and Singapore began exploring opportunities, placing orders and setting up factories. However, the industry’s export capacity remained relatively modest compared to other regional players such as Malaysia, Thailand, Indonesia, and the Philippines. 

Breakthrough Growth Leading to 2025

Vietnam’s textile and garment industry has entered a period of breakthrough growth. From modest beginnings, export turnover has multiplied many times over the past two decades. By 2025, Vietnam ranks as the world’s third-largest textile and garment exporter, a remarkable leap from its earlier stages.

The industry has evolved beyond basic processing to more advanced value-chain stages, including FOB (Free on Board) and ODM (Original Design Manufacturing) production. Many factories are now investing in in-house design, R&D, and technology upgrades, enabling them to compete on both quality and price. Automation, sustainable practices, and modern production management are increasingly standard, helping Vietnamese manufacturers meet rising global expectations.

Why Global Brands Choose Vietnam?

Vietnam has become a preferred manufacturing destination for many leading global brands, including Nike, Adidas, Uniqlo, Puma, and more. In fact, 60% of Uniqlo’s products sold in Vietnam are produced locally, highlighting that the country is not just a low-cost alternative but a strategic hub for apparel production.

So why do major brands continue to choose Vietnam?
The answer lies in Vietnam’s unique combination of competitive advantages: cost efficiency, flexible production capacity, diverse factory models, modern infrastructure, and reliable logistics. These factors enable global brands to execute critical production plans with confidence, respond quickly to market demands, and maintain high-quality standards.

While this provides a glimpse of Vietnam’s appeal, the full picture of why the country has emerged as a top textile and garment sourcing destination is explored in detail in the Vietnam Textile & Garment Production Capabilities White Paper 2025.

Managing Risks in Vietnam’s Textile and Garment Sector

Vietnam offers significant opportunities for textile and garment production, but businesses must be aware of potential risks. Managing supplier relationships remotely can present challenges such as overstated production capacity, communication gaps, complex export procedures, and quality control concerns.

To address these risks, companies typically adopt structured risk management practices and collaborate with experienced local sourcing partners. This approach helps mitigate operational disruptions, ensures smoother production processes, and maximizes the strategic advantages of working with Vietnamese manufacturers.

Looking Ahead: Vietnam’s Role in Global Sourcing

Looking ahead, Vietnam’s textile and garment industry is expected to sustain strong growth. Rising global demand, combined with cost advantages and expanding production capacity, secures Vietnam’s position as one of the world’s leading sourcing destinations.

Sustainability is also becoming a defining trend. From eco-friendly raw materials to cleaner production technologies, Vietnamese manufacturers are increasingly meeting international standards. This dual focus on cost competitiveness and responsible production positions Vietnam as a reliable and forward-looking partner in the global textile and garment supply chain.

Conclusion

Vietnam is not just a low-cost alternative. Its textile and garment industry offers flexible production, diverse factory models, modern infrastructure, efficient logistics, and a growing commitment to sustainability. These advantages make Vietnam a strategic destination for global brands and sourcing professionals.

However, this article only provides a snapshot. To fully understand how Vietnam compares with other sourcing hubs, manage supply chain risks, and leverage production advantages, access the FVSource Vietnam Textile & Garment Production Capabilities White Paper 2025.

Download the White Paper today to gain a complete picture, plan your sourcing strategy effectively, and maximize opportunities in Vietnam’s textile and garment sector.