1. Introduction
Vietnam has evolved into the world’s second-largest apparel and footwear exporter, following China. It currently serves as the core global production hub for Nike and Adidas, manufacturing over 50% of Nike’s footwear and approximately 98% of Adidas’ shoe products. In 2026, Vietnam’s footwear and apparel industry stands at a critical crossroads, shifting from scale-driven expansion to high-quality, green and intelligent transformation. While its export volume remains at a historic peak, the industry is confronted with mounting labor cost pressures, strict global environmental compliance rules and fragile upstream supply chains. This paper systematically analyzes the market evolution, structural challenges, policy rules and overseas development strategies, providing core references for global machinery, material and chemical enterprises deploying the Vietnamese market.
2. Industry Development History and Structural Pain Points
2.1 Three Development Stages
From the 1990s to 2007, Vietnam focused on low-end CMT (cutting, making, trimming) OEM processing, attracting capital from Taiwan, Hong Kong and South Korea relying on low labor costs and WTO accession. The decade from 2008 to 2018 marked a golden boom period. Driven by China’s industrial upgrading and the global “China + 1” supply chain strategy, massive garment and footwear production capacities shifted to Vietnam, forming a mature downstream processing system. Since 2019, the industry has entered a turbulent transformation stage. Despite tariff dividends from multiple FTAs, labor shortages, rising green trade barriers and strict origin compliance standards have forced the industry to abandon extensive labor-reliant growth and accelerate intelligent and localized supply chain upgrading.
2.2 Core Structural Challenges
First, the demographic dividend is fading. Vietnam’s annual minimum wage hikes have weakened its cost advantage over Cambodia and Bangladesh. Meanwhile, emerging electronics and service industries attract young laborers, leading to persistent labor shortages and high turnover in footwear and apparel factories. Second, the industry is trapped in a deep OEM dilemma. Vietnam boasts strong assembly capacity but lacks independent R&D capabilities in spinning, weaving, high-end dyeing and new material development. More than 35% of its raw materials rely on Chinese imports, resulting in vulnerable supply chain resilience. Third, global green barriers continue to tighten. EU carbon tariffs and supply chain due diligence regulations require manufacturers to provide traceable eco-friendly materials with GRS, GOTS and ESG certifications. Non-compliant factories will be eliminated from the global brand supplier system.
3. Core Tariff and Regulatory Rules
Vietnam’s industrial policy follows a clear logic: zero-tariff for exports, FTA-based import preferences, strict production compliance and full origin traceability. Finished apparel and footwear products enjoy 0% export tariff. Export-processing enterprises are exempted from import duties and VAT for raw materials and production equipment used for export orders, providing strong policy support for export-oriented manufacturing.
Rules of origin constitute the biggest threshold for tariff dividends. The EVFTA adopts a “fabric-forward” rule, requiring weaving and sewing procedures to be completed within member states to qualify for zero tariffs. The CPTPP implements a “yarn-forward” standard that mandates spinning processes finished in member countries. In terms of production compliance, Vietnam’s Labor Law caps monthly overtime at 40 hours with a yearly maximum of 300 hours, and enterprises bear 21.5% of mandatory social insurance costs. Its tightened Environmental Protection Law imposes rigorous EIA approval for printing and dyeing projects, strictly restricting high-pollution and low-end production capacity.
4. Development Strategies for Chinese Machinery and Material Enterprises
Vietnam’s market features prominent supply-demand mismatches: local factories urgently need labor-saving intelligent equipment and green compliant raw materials. Chinese enterprises should abandon low-price competition and adopt targeted market strategies.
For footwear and garment machinery manufacturers, core products include AI automatic sewing units, hanging systems, visual cutting machines, automatic glue spraying equipment and supercritical physical foaming machines, which effectively solve labor shortages and high energy consumption problems. It is essential to build localized after-sales service centers to achieve 24-hour on-site maintenance and enhance customer stickiness.
For shoe materials and chemical enterprises, all products must obtain ZDHC, OEKO-TEX and Bluesign certifications. Eco-friendly products such as water-based adhesives, fluorine-free water repellents and bio-based foaming materials are the mainstream market demands. Building overseas pre-positioned warehouses and localized distribution systems can shorten delivery cycles and solve logistics pain points. In terms of sales strategies, the “headquarters access + local factory testing” dual-track model is optimal, as procurement standards and supplier access rights of large Vietnamese factories are controlled by Chinese and Taiwanese headquarters.
5. Industrial Cluster Distribution and Procurement Demands
Vietnam has formed a distinct industrial pattern: shoe manufacturing in the south and garment production in the north. The southern cluster centered on Ho Chi Minh, including Binh Duong, Dong Nai, Tay Ninh and Long An, is the core area for high-end shoemaking, chemical materials and color spinning, with strong demand for intelligent forming equipment and green chemical raw materials. The northern cluster covering Hanoi, Quang Ninh, Bac Giang and Thanh Hoa focuses on bulk garment manufacturing and new intelligent footwear production, presenting huge market potential for automated sewing and warehousing equipment.
High-end printing and dyeing factories prioritize energy-saving dyeing machines, digital color matching systems and ZDHC-compliant auxiliaries and recycled fibers. Sports shoe manufacturers have strong demand for AI visual cutting equipment, water-free glue spraying lines, E-TPU lightweight materials and solvent-free synthetic leather to meet global low-carbon and environmental requirements.
6. 2026 VFM & VTG Exhibition Guide
The 24th Vietnam International Apparel & Textile Industry Exhibition (VTG 2026) and Vietnam International Footwear Machinery & Material Exhibition (VFM 2026) will be held from October 14 to 17, 2026, at SECC Exhibition Center in Ho Chi Minh City, co-located with VitaTex and DyeChem exhibitions. The exhibition only opens to professional audiences with formal business attire and real-name pre-registration.
The event sets up intelligent manufacturing and green compliance special zones, displaying labor-saving intelligent equipment and certified eco-friendly materials. Enterprise delegations with more than 5 members can enjoy VIP passages, exclusive business services and factory shuttle services. Organizers provide two official industrial investigation routes covering southern shoe material clusters and northern textile and garment bases, helping global buyers and suppliers accurately dock with top local factories. Pre-booking via official channels two weeks in advance is required for factory visits due to local strict security and confidentiality regulations.
7. Conclusion
2026 marks a pivotal transformation year for Vietnam’s footwear and apparel industry. The era of labor-dependent extensive growth has ended, and intelligent upgrading and green compliance have become the core competitiveness of industrial development. As a key hub of ASEAN’s textile and footwear supply chain, Vietnam brings huge market opportunities for Chinese machinery, materials and chemical enterprises. The VFM & VTG 2026 exhibition serves as a crucial platform for docking high-quality local clients, verifying product technologies and seizing incremental market shares in Southeast Asia.
