However, there has been a trending decline in the overall number of manufacturing orders, which may signal deterioration in business conditions for 2015, according to the General Statistics Office of Vietnam.
Hoang Ve Dung, Deputy General Director of the Vietnam National Textile and Garment Group (Vinatex) said the shortage of orders appears to be only a temporary phenomenon and does not signal any long-term downturn in the market.
However, Dung did say that as a precautionary measure, both small and large businesses should adjust their business strategy to a defensive posture to maintain market share and tighten up operations.
This translates to focusing on shoring up weak spots in marketing, boosting trade promotion to existing partners with a view to not losing any customers and keeping a close eye on the company’s purse strings.
Business plans should be strictly aimed at maintaining a company’s existing market share, Dung emphasised. To this end, he is urging domestic businesses to become more proactive through participating in fashion shows and exhibitions.
At present, the Vietnamese garment sector is facing fierce competition from Bangladesh, India and Indonesia which have advantages of material and labour resources. Local businesses are likely to lose in their home turf due to poor competitiveness in 2015 to these countries.
Moreover, Vietnamese garment and textile businesses have been greatly affected by other nations, especially China which can lower the prices of products to attract customers.
Dung said local businesses have already begun renovating their methods of production from outsourcing activities to Freight on Board (FOB) and Original Design Manufacturers (ODM) models, which is a step in the right direction.
Vinatex is also speeding up the transformation of production methods for member businesses and other businesses in the sector, he said.
In the long term the future for the industry remains bright with the signing of free trade agreements between Vietnam and the EU and the Customs Union of Russia, Belarus and Kazakhstan and the Trans Pacific Partnership (TPP) in the offing.
These trade pacts will open up tremendous future opportunities for the garment and textile sector, but right now businesses need to play defence and focus on improving their overall competitiveness.
However, Dung did say that as a precautionary measure, both small and large businesses should adjust their business strategy to a defensive posture to maintain market share and tighten up operations.
This translates to focusing on shoring up weak spots in marketing, boosting trade promotion to existing partners with a view to not losing any customers and keeping a close eye on the company’s purse strings.
Business plans should be strictly aimed at maintaining a company’s existing market share, Dung emphasised. To this end, he is urging domestic businesses to become more proactive through participating in fashion shows and exhibitions.
At present, the Vietnamese garment sector is facing fierce competition from Bangladesh, India and Indonesia which have advantages of material and labour resources. Local businesses are likely to lose in their home turf due to poor competitiveness in 2015 to these countries.
Moreover, Vietnamese garment and textile businesses have been greatly affected by other nations, especially China which can lower the prices of products to attract customers.
Dung said local businesses have already begun renovating their methods of production from outsourcing activities to Freight on Board (FOB) and Original Design Manufacturers (ODM) models, which is a step in the right direction.
Vinatex is also speeding up the transformation of production methods for member businesses and other businesses in the sector, he said.
In the long term the future for the industry remains bright with the signing of free trade agreements between Vietnam and the EU and the Customs Union of Russia, Belarus and Kazakhstan and the Trans Pacific Partnership (TPP) in the offing.
These trade pacts will open up tremendous future opportunities for the garment and textile sector, but right now businesses need to play defence and focus on improving their overall competitiveness.
