Vietnamese advantage may be short-lived - footwearbiz: Leading site fo

News

Vietnamese advantage may be short-lived

15/03/2012
A recent article in the Financial Times seems to confirm a statement that the China Leather Industry Association made at the end of February, that Vietnam is now three times cheaper for footwear production than China. But the situation may not last long.

The Financial Times has spoken to a number of manufacturers about the attractions of setting up production in Vietnam instead of China. Most agree that China has better infrastructure, including energy supply and port facilities. However, because manufacturers can pay unskilled workers $100 per month in many parts of Vietnam compared to the $300 per month their counterparts in China can earn, companies are willing to put up with the shortcomings.

However, what you win on price, you stand a good chance of losing on price, and the newspaper quoted inflation figures (“the highest in Asia”) of 16.4% in February and an ageing population as reasons why Vietnam’s advantage is likely not to last.

China has a higher media age that its neighour (35.2 years compared to 27.4, according to consultancy McKinsey), but manufacturing companies are ready to consider other countries in the region. One told the FT: “If Vietnam’s attraction is only wages, companies will soon be looking to Cambodia and Myanmar.”

footwearbiz.com cannot be held responsible for content if the language setting is changed from English.

The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.