Sourcing is a strategy wherein a business or an individual is located and selected for leveraging efficiencies in production. From components to fully manufactured and assembled goods, sourcing is aimed at finding the most appropriate suppliers ensuring both quality and cost-effectiveness.

Vietnam is one of the countries in Asia that is experiencing exponential economic growth. As a result, sourcing from Vietnam offers businesses everywhere the unique opportunity to find cost effective suppliers. Sourcing from Vietnam holds immense potential for the global market because of high skilled labor pool with lower labor costs as compared to other sourcing countries, robust work and quality ethics, easy access to deep sea ports, and favorable trade policies. The Vietnamese work culture has an edge over other global sourcing countries owing to its stringent efforts to uphold intellectual property, including patents and trademarks.

Vietnam as a sourcing hub

Vietnam is a significant and growing manufacturing destination for many companies around the world. The country is popular for low cost products, especially in the garments and furniture segment of consumer goods. It is the third-largest exporter of footwear in the world and Vietnamese footwear range includes leather, canvas, sports shoes and sandals. Besides this, Vietnam is one of the leading supply centers for competitively priced clothing, wooden furniture and corporate gifts. In addition to this, it has a growing industry in electronic parts, components, assemblies and plastics.

Advantages of Vietnam Sourcing

When it comes to sourcing, companies seek low cost manufacturing, labor and supply costs with standard quality production, and sourcing from Vietnam satisfies all of these requirements. Moderate corporate tax rates and tax concessions are the other key advantages that companies investing in Vietnam-based manufacturing facilities can benefit from.

Benefits of Vietnam Sourcing

• Vietnam proximity to China, South East Asia and its good sea links makes it a perfect base for foreign companies to export to the rest of Asia, and beyond.
• Low cost manufacturing.
• Manufacturing companies flexible in small batch production.
• A large, skilled and literate labor pool.
• Strong quality and work ethics in the workforce.
• Political stability.
• A Government that encourages import and export with favorable trade policies.
• Member of WTO.
• BTA (Bilateral Trade Agreements) to cover protection of IPR, trade in services, business facilitation.
• FTA with EU since 2012 and upcoming TPP (Trans Pacific Partnership) agreement.