APEC Vietnam’s potential US$ billion market

The textile and apparel export sector of Vietnam which targets a 10% growth seeks the Asia Pacific Economic Co-operation(APEC) as a potential US$ billion market. The textile and apparel industry continues to maintain high export turnover

General director of Vietnam National Textile and Garment Group (Vinatex), Mr Le Tien Truong has said that to fulfill the export target of US$31 billion for 2017 set by the Government, another US$ 8 billion is needed before the year ends. With the average growth rate in August and September, this year’s targeted export turnover of US$31.2-31.3 billion is achievable, enjoying 10%-11% growth when compared to one year earlier.

Mr Truong notes that the Vietnamese clothing industry has experienced exponential growth in key markets. Of the five main destination markets for Vietnamese clothing goods, four are APEC members (the US, Japan, the Republic of Korea and China) and the other is the EU.These four nations combine to make up 70% of Vietnam’s apparel and textile export turnover contributing remarkably to its export growth in 2017.

Exports to the US market have so far grew by 6.5% and are expected to reach roughly US$13 billion this year, making up 13-13.5% of market shares in the US. Exports to Europe and Japan have posted slower growth at 4-4.5%. Meanwhile, export growth was at 14.5% in Europe and 12% in Japan. Exports to the Korean market are expected to hit nearly US$2 billion this year.Apart from the foresaid four markets, China is seen as a lucrative market for Vietnam.

In the first eight months of the year, apparel and textile exports to China rose 30% to US$670 million. Although Vietnam primarily imports raw materials from China, about US$6 billion worth of fibres, the country sees significant growth in its export turnover to this vast market.

Vietnam has also recorded a staggering growth rate of 90% to nations within the Eurasian Economic Union and Russia, also a member of APEC. Export turnover to the Russian market will likely exceed US$200 million this year making it among the top 10 markets with the most Vietnam has exported apparel products to.

According to Mr Truong, out of the world’s five largest apparel exporters-China India, Bangladesh, Vietnam and Turkey, Vietnam has achieved the highest growth in the context that the global market is still facing tough competition this year.

The outsourcing costs for the apparel industry remain low due to lower absolute price in US$ and the global aggregate demands have not increased. Therefore, to increase export turnover, it is essential to seek new customers and new market shares. This is proving to be a thorny issue for export businesses.

Russia is regarded as a potential market for Vietnam over the next 4-5 years, Truong says, while hoping that that this market will become a major destination for Vietnamese apparel products, with US$1 billion in export turnover. By that time, APEC member economies will become a major market of Vietnam’s garments and textiles, constituting 74-75% of the country’s total export turnover.

Vu Duc Giang, Chairman of the Vietnam Textile & Apparel Association says that the key import markets are coping with unpredictable fluctuations as trade protectionism is running counter to the trend of WTO trade liberalization.For the reason, the market expansion should go along with technological development, particularly the adaption to the fourth industrial revolution and brand name building to bring more goods to the global market.