2026 VFM & VTG: Unlocking the New Era of ASEAN Footwear and Apparel Industry
As global supply chains continue to restructure and shift toward diversified and regionalized layouts, the ASEAN region has solidified its position as the core hub of the global footwear and apparel manufacturing industry. The upcoming 2026 Vietnam Footwear Machinery Fair (VFM) and Vietnam Textile & Garment Industry Exhibition (VTG), scheduled for October 14–17 at the Saigon Exhibition and Convention Center (SECC) in Ho Chi Minh City, stand as the most authoritative industrial platform in Southeast Asia. Centering on the ASEAN 10-nation market, this article systematically reviews the historical development, current industrial landscape, and future development trends of the regional footwear and apparel sector, revealing the core transformation logic and market opportunities behind the industry’s upgrading.
The development of ASEAN’s footwear and apparel industry is a typical epitome of global manufacturing gradient transfer and regional policy dividend release, which can be divided into three key stages. From the 1980s to 2000, the industry remained in the initial low-end OEM stage. Singapore, Malaysia, and Thailand took the lead in undertaking low-cost garment and shoe assembly orders from Europe, America, Hong Kong and Taiwan of China, relying on their preliminary industrial foundation. During this period, the regional industry was purely labor-intensive, with all core raw materials, fabrics and production equipment relying on imports. Other ASEAN countries including Vietnam, Cambodia and Indonesia only participated in sporadic low-end processing links, lacking complete industrial supporting systems and independent production capabilities, and the overall industry showed low added value and fragmented development characteristics.
From 2001 to 2015, the ASEAN footwear and apparel industry entered a rapid capacity expansion stage. Driven by rising labor costs in traditional manufacturing regions and the implementation of ASEAN free trade agreements, global brands fully launched the “China Plus One” supply chain strategy. Vietnam emerged rapidly with superior geographical location, preferential tariff policies and abundant labor resources, gradually becoming a core production base for international head sports brands such as Nike and Adidas. Indonesia and Thailand undertook a large number of mid-end footwear and apparel orders, while Cambodia, Laos and Myanmar relied on ultra-low labor costs to occupy the low-end assembly market. During this period, ASEAN’s overall export scale expanded rapidly, forming a preliminary gradient industrial division: Singapore focused on trade and R&D links; Vietnam, Thailand and Malaysia focused on large-scale finished product manufacturing; underdeveloped countries undertook simple assembly processes. However, the industry’s inherent flaws were prominent: strong processing capacity but weak local supporting capacity, large output but blank independent brands, resulting in long-term dependence on external upstream resources.
Since 2016, the ASEAN footwear and apparel industry has entered a critical stage of supply chain restructuring and iterative upgrading. Frequent global trade policy fluctuations, the launch of the EU Carbon Border Adjustment Mechanism (CBAM), and stricter ESG audit standards have forced international brands to disperse supply chain risks and accelerate the transfer of high-quality orders to Southeast Asia. Vietnam has grown into the world’s second-largest footwear exporter, capable of producing high-end functional sports shoes; Indonesia has expanded its industrial scale relying on local rubber and leather resources; Thailand and Malaysia have phased out backward low-end production capacity and transformed into R&D and production of functional fabrics and high-grade auxiliary materials. At the same time, industry challenges have become increasingly prominent: labor dividends are gradually fading, labor shortages and rising wage costs have become common pain points in core manufacturing countries, and extensive low-cost competition is no longer sustainable, making intelligent and green upgrading an inevitable trend for the industry’s survival and development.
In 2026, the ASEAN 10-nation footwear and apparel industry presents a distinct three-tier gradient pattern with unbalanced development and obvious hierarchical differentiation. The first echelon consisting of Vietnam, Indonesia, Thailand and Malaysia dominates the regional industry. As the core engine of ASEAN’s footwear and apparel manufacturing, Vietnam gathers world-class leading shoe and garment factories, with complete finished product processing links, but still relies on imports for more than half of high-grade shoe materials and functional fabrics. Indonesia benefits from rich natural resources and huge domestic demand market, with steady growth in export capacity, while import tariff policies restrict the rapid localization of upstream supporting industries. Thailand and Malaysia have completed the elimination of low-end backward capacity, focusing on high-value-added links such as functional material research and development and automated production.
Cambodia belongs to the second echelon, enjoying long-term EU tariff preferential policies, with a solid garment manufacturing foundation and rapidly growing footwear production capacity in recent years. A large number of foreign-funded factories have settled in the country, but its industrial supporting system is extremely imperfect, and almost all production equipment and raw materials need to be imported externally. The third echelon includes Laos, Myanmar, the Philippines, Brunei and Singapore. Laos and Myanmar rely on low labor costs to undertake basic garment and shoe assembly orders, but are restricted by backward infrastructure and incomplete industrial chains with fragile order stability. The Philippines retains a small-scale traditional garment processing industry, while Brunei has almost no footwear and apparel manufacturing capacity. Singapore completely withdraws from physical manufacturing and focuses on high-end links such as brand design, international trade and supply chain financial services.
Looking ahead to the next three to five years, the ASEAN footwear and apparel industry will bid farewell to the era of relying solely on labor cost advantages, and usher in a new development era driven by intelligence, greening, localization and flexible supply chains, with four major trends taking shape. First, intelligent automation transformation will be fully popularized. Facing labor shortages and rising human costs, local factories will accelerate the elimination of backward manual production lines and widely adopt intelligent cutting equipment, automatic sewing systems, 3D shoe design tools and digital production management systems to reduce labor dependence and improve production efficiency, which is also the core display focus of 2026 VFM & VTG.
Second, green and low-carbon compliance will become a rigid entry threshold. With the continuous implementation of EU CBAM, corporate sustainable due diligence regulations and product carbon traceability rules, environmental assessment standards for global brand orders will be further improved. Environment-friendly materials such as low-VOC adhesives, recyclable fabrics and supercritical foaming shoe materials, as well as energy-saving and emission-reducing production technologies, will become standard configurations for factory production. Enterprises that fail to complete green upgrading will be completely excluded from the global high-end supply chain.
Third, industrial supporting localization will be accelerated. To meet international rules of origin and obtain continuous tariff preferences, ASEAN core manufacturing countries are vigorously investing in upstream industrial projects such as yarn, fabrics and shoe materials to improve the self-sufficiency rate of local supporting resources, reduce external dependence, and build a closed-loop regional supply chain system. Fourth, differentiated regional division and flexible multi-base layout will be further deepened. Global brands will continue to implement decentralized supply chain strategies. Various ASEAN countries will rely on their own advantages to form complementary industrial layouts, realizing risk diversification and capacity flexibility of the regional supply chain.
