Vietnam continues to be selected by European and American businesses for the supply chain

Thứ Bảy, 8/5/2021| 19:19

Vietnam continues to be selected by many US and European businesses in global supply chains over the next 12 months, according to a survey by Qima - a supply chain solutions provider.

Although China has recovered relatively strongly from the pandemic, the trend to shift global supply chains away from the world's second-largest economy continues.
This is the result of a survey conducted by Qima - a supplier of supply chain solutions - with more than 700 businesses globally in March.
Accordingly, if in 2019, 96% of US-based businesses and 100% of European-based businesses consider China to be one of their three largest suppliers, that percentage will in turn decrease to 77% and 80% in the first quarter of 2021.
Capital strongly affected by the US-China trade war, China as a supplier to Western businesses suffered a new shock in early 2020 when the Covid-19 pandemic raged, forced shut down the economy.

Vietnam continues to be selected by European and American businesses for the supply chainOne-quarter of businesses surveyed globally considered Vietnam one of the top three supply chain markets.

 

However, even as US and European-based businesses gradually reduce their dependence on the Chinese market, the country remains the leading source of supply.
For firms outside of China, more than 85% of respondents said China was one of the top three suppliers of promotional products, electronics and toys.
"This shows that, despite efforts to diversify supplies, buyers continue to view China as one of the most important manufacturing partners and wish to maintain business connections with Chinese suppliers." stated the survey report.
As one of the Chinese alternative supply markets in the region, Vietnam has maintained its position during the volatile 2020 and early 2021. According to the survey, a quarter of enterprises were questioned. Globally, Vietnam is considered one of the top 3 supply markets.
Before the US-China trade war broke out, several Chinese businesses, especially in the textile and apparel industry, had moved factories to Southeast Asian countries like Vietnam. On the other hand, many other manufacturers have also moved to Vietnam since the trade war began.
India, considered a textile powerhouse and currently struggling with the Covid-19 pandemic, is also seen as one of the top supply markets. At least one-third of the businesses surveyed in the areas of promotional products, eyewear, jewellery, fashion accessories and footwear "proposed" for India.
According to the survey, Vietnam is particularly popular with US-based businesses. The proportion of US-based businesses that consider Vietnam one of the top three supply sectors has doubled over the past four years, reaching 43% in early 2021.
25% of businesses based in Europe in this survey also voted Vietnam as one of their top 3 supplier countries in Q1 of 2021. Although this rate is 15 percentage points lower than last year, but still 11% higher than in 2019. This is because the Free Trade Agreement between the EU and Vietnam came into effect from 1st August.
Among surveyed firms that switched to other suppliers last year to avoid pandemics and other risks, a third said Vietnam was their first choice. Particularly for US businesses, this figure is even higher, at 40%, and is expected to continue in 2021. Among the firms surveyed intending to find new suppliers in the next 12 months, 38% of US firms and 28% of European firms report that they plan to choose Vietnam or buy more from suppliers here.
Meanwhile, only 6% and 11% of brands based in the US, EU said, they are still sourcing in China.

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