Vietnamese textile and garment products are now exported to 138 countries, boosted by 16 free trade agreements (FTAs), with that number expected to grow to 22 by 2027.
Emerging markets like the Middle East and Africa offer new growth opportunities, according to Giang. Once overlooked, these regions have become more prominent.
In 2024, exports to Islamic countries alone reached US$1 billion, and by July 2025, revenue from the Middle East had already hit US$700 million.
Vietnamese firms are also targeting premium segments, offering products with higher design and technological content – a move that supports long-term competitiveness.
One of the biggest hurdles is production costs, which are about 40-45% higher in Vietnam compared to Indonesia, Malaysia and Myanmar – despite Vietnamese labour being around 40% more productive.
On the upside, the industry is rapidly embracing automation and green technologies, becoming second only to China in regional supply chain modernisation.
However, logistics remain a bottleneck. According to Dang Thi Minh Phuong, Chairwoman of the Ho Chi Minh City Logistics Association, shipping and warehousing costs have surged. Despite salaries of VND35-40 million (US$1,300-1,500) per month, businesses are struggling to recruit container drivers.
She urged firms to restructure supply chains and invest in logistics technology to improve competitiveness. Besides that, the shift from traditional processing models to FOB (Free on Board) and DDP (Delivered Duty Paid) purchasing methods has changed the financial landscape.
Giang stressed the need for stronger cooperation between banks and exporters, urging banks to offer tailored credit packages aligned with modern contract terms.
“Banks must understand the nature of today’s export contracts and build trust with businesses through transparency,” Giang said, adding that: “Only then can we ensure a stable flow of capital to support growth.”
Trade policy is also a pressing concern. The US imposed a 20% reciprocal tax on Vietnamese textile and garment products (down from an initially proposed 40%), significantly impacting export dynamics.
While the first nine months of 2025 saw steady demand as customers rushed to place orders ahead of the tax implementation, new orders from the US have since dropped sharply.
With buyers now demanding that Vietnamese producers absorb part of the tariff cost, profit margins are shrinking.
Furthermore, US authorities have signalled potential tax hikes on products lacking clear origin documentation, in a bid to prevent transit-based origin evasion – a warning to Vietnamese firms re-exporting goods from China.
Additionally, Vietnam currently imports 100% of its cotton and up to 95% of its synthetic fibres. Chemicals and dyes are also almost entirely imported. This lack of domestic input production remains a major weakness, especially under tightening origin rules and shifting trade policies.
To mitigate risks, industry leaders are calling for increased localisation of raw materials, ensuring traceability and reducing exposure to foreign supply shocks.
Despite the industry’s export success, brand development remains a longstanding weakness.
“Vietnamese fashion brands are still small and in the early stages,” said Vinatex general director Cao Huu Hieu. “Meanwhile, international brands dominate even in our domestic market.”
Major global brands invest heavily in design talent, which is currently lacking in Vietnam, according to Hiếu. Building a strong brand identity, especially in fashion, requires a long-term commitment to training, design, and product differentiation.
While Vietnam has made strides in automation, its overall productivity remains moderate compared to other leading textile producers in Asia and Europe. Investments in modern machinery, smart factories, and automation are seen as essential to maintaining competitiveness.
Hieu noted that Vinatex’s strategic goal was to become a complete solutions provider for green fashion – from yarn and fabric to finished garments. The company planned to focus on sustainable, circular, and recycled products, aligning with global trends in eco-conscious consumption.
Trade policy is also a pressing concern. The US imposed a 20% reciprocal tax on Vietnamese textile and garment products (down from an initially proposed 40%), significantly impacting export dynamics.
While the first nine months of 2025 saw steady demand as customers rushed to place orders ahead of the tax implementation, new orders from the US have since dropped sharply.
