Given an unstable global economy with strong consumer demand for transparency and sustainability, Vietnam’s textile-garment industry is facing mounting difficulties, prompting a need to transform for growth.

Vice General Secretary of Vietnam Textile & Apparel Association (VITAS) Nguyen Thi Tuyet Mai said the US and EU – two major textile and garment import markets of Vietnam – have recently issued stricter regulations on the origin of products.

Economist Huynh Thanh Dien said that Europe is expected to adopt a common strategy to eliminate ‘throwaway’ consumption toward a goal of having only sustainable and recyclable apparel entering the EU market by 2030.

Kieu Manh Kha, Supply Chain Manager at the Vietnam Office of the Cotton Council International, noted all brands will require their supply chain to provide traceability information by 2030. In the short term, by 2025, about 25-50% of brands will apply the requirement.

About 80% of enterprises operating in the Vietnamese textile and garment industry are small and medium companies. The sector employs over 2 million industrial workers and nearly 1 million service workers, but the labour productivity remains low and production costs have yet to be optimised.

In the context of the current volatile and difficult business environment, experts held that only sustainable and flexible development, investment in digital transformation, and application of scientific advances and circular economy model can help businesses stand firm in the market.

In December last year, the Prime Minister signed a decision approving the strategy for the development of the textile, garment and footwear industry to 2030, with a vision to 2035.

According to Mai, this is the legal corridor for the sector to seize opportunities serving growth in the next 15 years, with an expectation that the nation can completely export with Vietnamese brands by 2035.

To this end, enterprises need to comply with labour commitments, sustainably protect the environment, and be profitable, she said.

Regarding the transparency of origin, Kha advised businesses to consider joining the US Cotton Trust Protocol programme as quickly as possible. Via the support programme, Vietnamese textile and garment firms can add quantitative traceability to each product, hence a more transparent supply chain for growth in popularity.

Dien suggested given the current difficulties, companies, in the short-term, should turn to new markets rather than getting back to the domestic market.

VNA