Vietnam’s Textile and Garment Exports Rebound in Q1 2024
Major Markets Show Positive Growth
According to the Ministry of Industry and Trade, textile and garment exports reached $3.25 billion in March 2024, a 1.5% increase year-over-year. For the first quarter of 2024, total export turnover hit $9.5 billion, up 9.6% compared to the same period last year.
All major export markets for Vietnamese textiles and garments recorded positive growth. Exports to the United States reached $3.42 billion, an 8.6% increase; exports to the European Union totaled $855 million, up 3.2%; and Japan maintained a strong growth momentum with an export value of $1.02 billion, a 10.1% rise.
General Director of May 10 Group, Than Duc Viet, reported that the company’s total revenue in the first three months of the year reached VND 1,128 billion, a 24.41% increase compared to the same period last year, fulfilling 25.07% of the 2024 target. Export revenue alone reached VND 1,020 billion, while domestic revenue amounted to VND 73.1 billion, a 3% increase year-over-year.
Emphasizing the positive market signals, Chairman of the Vietnam National Textile and Garment Group (Vinatex), Le Tien Truong, stated that many of the group’s member companies have received orders that extend into the middle of this year. According to him, the textile and garment industry is anticipating a successful year as inflation gradually decreases and purchasing power improves in key markets.
Textile and garment exports have been a bright spot in the first months of 2024. Photo: MINH PHONG
According to Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (Vitas), demand in key export markets and production conditions for enterprises have improved compared to the same period last year. Demand for apparel products has increased in global markets. Most textile and garment companies in Vietnam have secured orders through the second quarter of 2024, with some even receiving orders extending into the third quarter.
Mr. Giang highlighted another notable signal: many retail corporations in free trade agreement (FTA) member nations such as Canada, Australia, and Europe have come to Vietnam seeking cost-competitive supply chains. “Global textile and garment manufacturers and supply chains continue to choose Vietnam as a production and sourcing destination,” said Mr. Giang.
While the global economy is expected to face challenges in 2024, the Vietnamese textile and garment industry remains committed to achieving an export turnover target of $44 billion, a 9.2% increase compared to 2023. Can Van Luc, member of the National Monetary and Financial Policy Advisory Council, acknowledged that order-related challenges persist, the market recovery is gradual, and input costs remain high. Additionally, supply chain risks, the trend towards greening, and the circular economy pose stricter demands on export goods.
Challenges and Uncertainties
Despite positive signs in terms of orders and market demand in the early months of 2024, the textile and garment industry still faces significant challenges. The ongoing conflict in the Red Sea, the Russia-Ukraine tensions, and intensifying trade wars between countries pose risks. For the textile and garment sector, the conflict in the Red Sea is particularly concerning due to its impact on shipping costs.
Than Duc Viet expressed concern over how the situation in the Red Sea is driving up shipping costs, reducing company profitability. In light of this, he stated that the company has implemented various strategies to overcome these challenges, such as exploring domestic and international markets, diversifying products and customers, and researching and developing new products and materials.
The Ministry of Industry and Trade also assessed that the global economy is entering a new phase marked by increased risks, challenges, and uncertainties. Global and regional economic growth in Europe and the Americas is projected to be lower in 2024 compared to 2023. Protracted and volatile geopolitical conflicts could widen, affecting Vietnam’s export activities. Moreover, the increased focus on sustainable development, climate change mitigation, and consumer safety will continue to shape stringent standards and regulations related to supply chains, raw materials, labor, and the environment.
“Countries are diversifying their supply sources, focusing on partners that are geographically closer to their markets or comparable to Vietnam, such as Turkey, Mexico, India, Indonesia, and Bangladesh. This will increase competition in Vietnam’s export markets,” said the Ministry of Industry and Trade.
Vitas Chairman Vu Duc Giang also acknowledged the persistent pressures facing the textile and garment industry, including labor issues. To overcome these challenges and meet export targets, Mr. Giang emphasized the need for industry players to diversify markets, products, and customers.
Additionally, he stressed the importance of investing in science, technology, and human resources. Notably, businesses must proactively embrace the green transition, adjusting production processes and investing in new technologies to maintain competitiveness and meet the demands of global supply chains.
To promote export activities in general and textile and garment exports in particular, the Ministry of Industry and Trade advised businesses to closely monitor market trends and policy changes in partner countries. Based on this information, they can propose appropriate solutions and develop diverse export markets, both traditional and new.
Support from the Government
The Ministry of Industry and Trade announced that it will request Vietnamese Trade Offices in various regions to regularly update on foreign market conditions, regulations, standards, and requirements that could impact Vietnam’s import and export activities. They will provide recommendations to local authorities, associations, and import-export businesses.
Furthermore, the ministry will assist businesses in effectively utilizing FTAs to diversify markets, supply chains, and boost exports.
