Updated: Dec 16, 2020
The textile sector is one of the oldest industries in the world although it is nowadays totally globalized.
Asia accounts for 80% of the world's textile and clothing exports (out of a total of 500 billion dollars). China is the world's largest exporter, surpassing the European Union in 2010. The Middle Kingdom accounted for 30.7% of the sector's exports in 2010, compared to 26.8% for the European Union. In 2019, China exported $120 billion, almost twice as much as the European Union ($66 billion).
Many foreigners, who came to China between 2000 and 2010, have witnessed the country's evolution and its growth in this industry. Arriving in China in 2006, Benjamin MARSAL, founder and director of the company Beta FV, saw a few small factories turn into giants in less than 5 years (3,000 employees). Like others, his years of experience have allowed him to broaden his knowledge and network of companies and factories. It all started with the sale of metal parts before he became interested in textiles, his biggest industry portfolio today. The main mission of Benjamin's company is the purchase of raw materials and finished products for resale. His company mainly buys products from China (90%), Vietnam, and Thailand for resale in Europe (80%), Africa, the United States, and Canada.
Benjamin explains that if China is the first textile exporting country, it is mainly because the country has raw material, unlike other Asian countries whose resources are limited. Thus, "made in China" should not be seen as a pejorative annotation, but rather as a metaphor for the presence of certain raw materials in the country.
For his part, textiles come overwhelmingly from China (90%), leather being the only exception (Italy). It is mainly exported to France, Spain, and Madagascar. These countries are mainly looking for raw materials and accessories for local production or resale. Beta FV's biggest customer is the online haberdashery industry, especially if we look at the figures for 2019/2020.
The luxury sector is also important: the products are sold directly to the brand's headquarters, which distributes them to their various stores.
Vietnam is known worldwide for its production of furniture and packaging because the country has the necessary resources. On the other hand, textiles (raw materials), although many are represented in the factories, are mostly imported from China. For Benjamin, China will remain a key player in the production of clothing and accessories for several reasons, other than resources: the network of customers it has, the modernization of its factories, the power of the country, and its experience.
Indeed, China has higher productivity than elsewhere because of its experience, first of all, and because of the automation of its factories. Although one of Vietnam's assets is its labor costs (about 50% lower than in China), many customers do not benefit from this, especially when it comes to working on products that the Vietnamese are not used to (silk for example). Vietnam is making progress, it is a fact, but it is not possible to compare it to China at this time because of its demographics, size, and history.
Infrastructure also plays a major role in Vietnam's slow growth. Roads, especially in the south, are in poor condition, and access to the port considerably slows down delivery times. Ships are missed because of queues of trucks several kilometers long, blocking container access to the port. The logistics are already complicated, adding to the difficulties of access. Sometimes, especially during this COVID-19 period, it can take up to eight days for the container to be loaded onto the ship following loading from the production plant. This can also be explained by the shortage of ships and containers at the end of 2020.
Within 10 to 15 years, Vietnam will have a big place in the global production sector. To be present on the territory as soon as possible is then not negligible for those wishing to produce in Vietnam. It is important to understand that market research before setting up is essential, both to produce and to sell. To learn about Vietnam's comparative advantages is therefore very important, as well as being able to answer the question, through studies, "Is Vietnam able to produce this product with the quality and raw material expected?". These studies can be carried out by French International Volunteers in Business (more information on the website), in charge of three or four countries in the region, or by sourcing companies specialized in the said sector and in the country or countries surveyed. You must be strategic, not opportunistic. Each country has its comparative advantage in a particular sector.