Vietnam’s garment and textile adapt to market changes for growth

(VOVWORLD) - Slow global growth and the financial market’s potential risks have forced consumers to tighten their spending, especially for garments and textiles. New export requirements on environmental, social and governance issues are pushing Vietnamese garment and textile enterprises to change themselves towards flexible adaptation and sustainable development.

Vietnam’s garment and textile adapt to market changes for growth - ảnh 1(Photo: Tran Viet/VNA)

Vietnam’s garment and textile turnover and market share are on the decline due to the gloomy global market and strict requirements set by import countries. But this can be considered an opportunity for enterprises to improve price and product quality competitiveness.

Cao Huu Hieu, CEO of Vietnam National Textile & Garment Group, said that domestic companies are facing price competition for garment orders, but the number of orders and companies ordering remains on the rise.

“It is not just a story of the US market, the world’s largest textile consumption market, but when this market rebinds, it will automatically stimulate the demand of all related systems. Second, the fiber industry has been undergoing difficulties for 18 months,” Hieu explained, adding, “The market is reported relatively gloomy and will continue so at least until the end of the first quarter and maybe even the end of 2024. The garment industry has seen signs of improvement since December last year and into this January.”

Vietnam’s garment and textile adapt to market changes for growth - ảnh 2Cao Huu Hieu, CEO of Vietnam National Textile & Garment Group (Photo: VNA)

The garment and textile sector has increased investment in new technology to improve labor productivity and save costs to meet new market requirements. This has helped the sector raise its competitiveness and attract more foreign investors, said Nguyen Xuan Duong, President of Hung Yen Garment Corporation.

Duong told VOV, “Over the years, many businesses have invested in textiles and fibers. Our business is aiming to build a chain with foreign partners in addition to building a domestic chain.”

Vietnam has participated in bilateral and multilateral free trade agreements including new-generation FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU‑Vietnam Free Trade Agreement (EVFTA). These are creating favorable conditions to expand markets for businesses, especially those in garment and textile.

According to Tran Thanh Hai, Deputy Director of the Import-Export Department of the Ministry of Industry and Trade, although the export market is experiencing difficulties, businesses are encouraged to make the most of FTAs to maintain exports to key markets.

Hai said it’s time for businesses to continue to apply the experiences and lessons learned to come up with appropriate strategies and tactics for their business activities.

He underscored greater attention to newly arising trade barriers such as trade remedy measures or measures relating to labor and the environment.

The strategy for developing Vietnam’s textile, garment and footwear industry until 2030 with a vision to 2035 defines that garment and textile is one of Vietnam’s key export industries that has quality, competitive products in the world market.

It meets the domestic market needs while maintaining its position as one of the world’s largest manufacturers and exporters of textile and garment products.

Vu Duc Giang, Chairman of Vietnam Textile and Apparel Association, said to develop textile industrial parks, it’s necessary to invest in wastewater treatment infrastructure that meets environmental regulations and customer evaluation terms.

“Without textile and dyeing industrial zones, it would be difficult for us to attract investors. As the world fashion market changes very quickly by seasons, Vietnamese companies must meet fabric requirements seasonally. This is a difficult problem which won’t be solved overnight,” said Giang.

The textile and garment strategy has set an export target of 44 billion USD this year, up more than 9% over last year.

In addition to the State support in market connection and administrative reform, companies’ adaptation to market fluctuations will help the sector grow sustainably.