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Enterprises in the textile, garment and footwear industries are facing a decrease in orders through the rest of this year and possibly into the next year.

Hanoi’s firms operating in the supporting industry are developing strongly, reflected through the continuous increases in the number of businesses, their scale and quality. However, according to economists, the capital city still needs specific policies to make the sector grow further.

Vietnam’s garment-textile and footwear have borne the brunt of COVID-19 and firms in the sectors may take a long time to recover, experts said.

Several of Vietnam’s key export sectors, such as textile-garment, leather-footwear, and electronics have become magnets for merger and acquisition (M&As) activities, posing a risk of leading enterprises in those sectors being purchased by foreign investors.

The UK-Vietnam Free Trade Agreement (UKVFTA), expected to come into force in the beginning of 2021, is promising several export opportunities to the European market for Vietnamese garment-textile and footwear enterprises.

More and more Italian textile firms are investing in Vietnam to take advantage of the EU-Vietnam Free Trade Agreement (EVFTA) and export to the European market, experts said.

Cambodian Labour Minister Ith Samheng on September 10 announced the new monthly minimum wage for the country’s garment and footwear industry at 192 USD in 2021 from current 190 USD, although the sector has been badly hit by the COVID-19 pandemic.

Vietnam has been always very good at taking advantage of crisis to accelerate reforms and move faster and grow better, Jacques Morisset, World Bank Lead Economist and Programme Leader for Vietnam, has said.

Cambodia earned 3.7 billion USD from the export of garment products, including clothes, footwear, and travel goods –in the first half of this year, down 5 percent compared to the same period last year, according to Cambodian news agency AKP.

The EU-Vietnam Free Trade Agreement (EVFTA) is expected to provide a host of opportunities to Vietnamese enterprises to bolster their exports, but they must also meet strict requirements in order to fully capitalise on the deal, insiders have said.

Garment-textile and footwear are among the hardest hit sectors by the COVID-19 epidemic.

One of the biggest weaknesses of many domestic manufacturing industries is the heavy dependence on foreign supply chains, according to the Department of Industry under the Ministry of Industry and Trade.

Garment-textile and footwear enterprises are seeking material supplies from markets besides China amid the complicated developments of the acute respiratory disease caused by SARS-CoV2 (COVID-19).

Up to 93 percent of the businesses from the Republic of Korea (RoK) are satisfied with their investments in Vietnam, according to a recent survey conducted by the Korea Trade and Investment Promotion Agency (KOTRA).

With tax barriers for less sensitive commodities being lifted within no later than three years since the adoption of EVFTA, Vietnam’s garment and footwear industries are predicted to be beneficial.

Vietnam was one of the fastest-growing import sources of the US in Asia in the first quarter of 2019, according to Bloomberg. ​

Japan’s large import demand is a good opportunity for Vietnamese businesses to expand their market shares in the country, as well as access other potential markets through the global distribution network of the Japanese group AEON, experts said at a workshop held in Ho Chi Minh City on April 23.

The Government and firms of Mexico see Vietnam as a potential market among members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The CPTPP, which officially came into force on December 30, 2018, is expected to provide a push for Vietnam to reform its economic institutions and further improve the business climate to optimize opportunities brought by the deal.

The EU-Vietnam Free Trade Agreement (EVFTA) is expected to create solid opportunities for Vietnam to expand its export markets in the time ahead, especially in terms of the garment and footwear industries.