Textile orders expected to rise from fourth quarter of 2023

VCN - The revenue of textile and garment enterprises is expected to gradually improve after a sharp discount during the holidays in the fourth quarter of 2023. ​
Textiles and garments face Textiles and garments face "double" difficulties: Lack of orders, unit prices are deeply reduced
Textile and garment exports will reach US $ fourty one billion Textile and garment exports will reach US $ fourty one billion
Dealing with outputs for the furniture, textile and footwear industries Dealing with outputs for the furniture, textile and footwear industries
Vietnamese textile and garment enterprises introduce raw materials at a textile and garment exhibition. Photo: N.H
Vietnamese textile and garment enterprises introduce raw materials at a textile and garment exhibition. Photo: N.H

In July 2023, Vietnam's textile and garment export turnover reached US$3.8 billion, down 9% year-on-year, lower than the 17% decrease in the first half of 2023. This is also the month recording the highest export value since the beginning of the year.

Export turnover of the industry in the first seven months of 2023 reached US$22.8 billion, down 15% year-on-year. Of which, export turnover to the US - the largest export market contributed 39% of total exports, reaching US$8.7 billion, down 24%. The exports to Europe and Japan reached US$2.7 billion, and US$2.2 billion respectively, down 10% and up 4%.

Thus, the Vietnam National Textile and Garment Group (Vinatex) expects the country's textile and garment export turnover in 2023 to reach about US$40 billion, down 10% compared to 2022.

In the textile and garment industry update just released on August 24, SSI Research pointed out that, due to the global economic downturn, inflationary pressure and high inventory levels in the first half of 2022, major textile and garment exporters also recorded a year-on-year decrease in exports in the first half of 2023. Specifically, China recorded a decrease of 7.3%. Bangladesh is the only country to record a 4% increase in the first half of 2023.

According to a survey of major retailers, although Vietnam is rated higher than Bangladesh in terms of quality and production capacity, Bangladesh has advantages in cost, tax and government subsidies. Bangladesh is among the 45 developing countries that are currently exempt from European tariffs. Meanwhile, the implementation of EVFTA, strict rules of origin for fabrics are an obstacle for Vietnam's textile and garment when about 70% of fabrics are imported from China.

In times of economic downturn, cost is one of the most important factors in choosing a manufacturer. The minimum wage in Bangladesh is currently US$75 /month, while the minimum wage in Vietnam and China is US$199/month and US$300/month, respectively. SSI Research also notes that in 2022, the USD/BDT rate decreased by 17%, while the USD/VND rate decreased by 3.5%. Accordingly, exports of Bangladesh become more competitive than that of Vietnam.

However, Vietnam continues to be ranked higher in product quality, labor productivity and delivery time, which are important factors for retailers as the economy recovers and demand increases.

In the second quarter of 2023, most of the listed textile and garment companies recorded a significant decrease in net revenue and net profit, with profit margin more narrowed than the previous year. TNG Investment and Trading Joint Stock Company and Thanh Cong Textile - Investment - Trade Joint Stock Company (TCM) recorded a decrease in net profit of 37% and 96% respectively over the same period in 2022. Song Hong Garment is more positive with a 2% slight decrease in net profit.

Song Hong Garment has the highest FOB orders in the apparel industry, helping the company receive great benefit from the industry's recovery while its major long-time customers such as Walmart, Columbia and Target have recorded revenue growth in recent quarters.

While orders are expected to recover in the fourth quarter of 2023, Vinatex thinks the recovery will be slow as spending on non-essential items takes time to recover. Therefore, SSI Research estimates that the average selling price will continue to remain low (about 20% lower than the average in the first half of 2022) and only slightly increase compared to the same period last year for FOB orders. Profit margin of manufacturing enterprises will continue to narrow although input material costs are gradually improving; gross profit margin will hardly return to its peak in 2019.

Vietnam's textile and garment: go faster or be usurped Vietnam's textile and garment: go faster or be usurped

Moreover, Vinatex expects the trend of orders with smaller volumes and faster delivery to last until 2024. In the second half of 2023, domestic garment manufacturers expect that the orders in the third quarter of 2023 will still be equivalent to the level of the second quarter of 2023. Following a sharp holiday sale in the fourth quarter of 2023, the revenue outlook should improve. According to the statistics in the past, when the amount of clothing inventory in the US peaked in January 2007, it took the market two years to absorb with the inventory to recover in December 2009.

By Nguyen Hien/ Huyen Trang

Related News

Hai Phong Customs’ revenue rises about VND 1,000 billion

Hai Phong Customs’ revenue rises about VND 1,000 billion

VCN- In the first month of the year, Hai Phong Customs' revenue increased by nearly VND1,000 billion.
Import and export turnover reaches about US$29 billion in the second half of January 2025

Import and export turnover reaches about US$29 billion in the second half of January 2025

VCN - Vietnam's total import and export turnover in the second half of January 2025 (January 16-31, 2025) reached US$28.9 billion, the latest preliminary statistics of the General Department of Vietnam Customs reported.
State revenue in first month of the year equal to 14% of the estimate

State revenue in first month of the year equal to 14% of the estimate

VCN - According to the Ministry of Finance, in January - the first month of 2025, the total state budget revenue is estimated at VND275.9 trillion, equal to 14% of the estimate; meanwhile, the total state budget expenditure is estimated at VND134.4 trillion.
Hai Phong Customs processes more than 1,500 declarations during 2025 Lunar New Year holiday

Hai Phong Customs processes more than 1,500 declarations during 2025 Lunar New Year holiday

VCN - During the 2025 Lunar New Year holiday, Hai Phong Customs Department processed 1,547 declarations.

Latest News

Embracing green exports: a pathway to enter global supply chains

Embracing green exports: a pathway to enter global supply chains

This shift presents both a challenge and an opportunity for Vietnamese businesses to innovate and enhance their competitive edge in the international arena.
New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

The ministry proposes to issue a decree on the establishment, management and use of the Investment Support Fund to stabilise the investment environment, encourage and attract strategic investors and multinational corporations.
Việt Nam’s durian exports to China plummet by 80%

Việt Nam’s durian exports to China plummet by 80%

This sharp decline has had a direct impact on Việt Nam’s fruit and vegetable export revenue, which stood at US$416 million in January 2025, marking a 11.3 per cent decrease month-on-month and a 5.2 per cent drop year-on-year.
Coconut exports reach 14-year high

Coconut exports reach 14-year high

In 2024, fresh coconut and coconut product exports surpassed US$1 billion, marking the highest figure in the past 14 years.

More News

Shrimp exports grow in the first month of 2025

Shrimp exports grow in the first month of 2025

According to data from the Việt Nam Association of Seafood Exporters and Producers (VASEP), shrimp products recorded a 13 per cent increase in export value in January 2025, reaching a total of $273.3 million.
Rice export prices drop, but decline expected to be short-term

Rice export prices drop, but decline expected to be short-term

Việt Nam’s rice export prices have declined, reaching their lowest level in three years.
Key agro products expected to maintain export growth this year

Key agro products expected to maintain export growth this year

At present, agricultural exports, such as rice, coffee and seafood, have steadily secured a stable place in major global markets.
EU issues 12 warnings against Việt Nam’s food and agricultural exports

EU issues 12 warnings against Việt Nam’s food and agricultural exports

The Việt Nam SPS Office has reported that some Vietnamese export products failed to meet the EU’s stringent standards.
Việt Nam to impose VAT on low-value express-imported goods

Việt Nam to impose VAT on low-value express-imported goods

Việt Nam will end a previous policy that exempted imported goods valued under VNĐ1 million (US$39.4) from taxes when shipped via express delivery.
Exchange rate risks need attention in near future

Exchange rate risks need attention in near future

VCN - Exchange rate developments in 2025 are considered to be quite complicated due to US policies related to trade and investment.
Vietnam kicked off the year with a strong start in trade, exceeding US$63 billion in the first month

Vietnam kicked off the year with a strong start in trade, exceeding US$63 billion in the first month

VCN - Data from the General Department of Vietnam Customs indicates a softening of both exports and imports in January 2025, relative to the same month in 2024.
Market edges up slightly as liquidity remains low

Market edges up slightly as liquidity remains low

Market breadth remained positive, with 161 gainers outnumbering 144 decliners.
Business regulations must be trimmed for development of enterprises: Experts

Business regulations must be trimmed for development of enterprises: Experts

The General Statistics Office (GSO)'s socio-economic report for January 2025 reveals that while over 33,400 newly established or resumed businesses entered the market - marking a 15% increase compared to January 2024 - more than 58,300 businesses withdrew from the market, representing a growth of 8.1% on year.
Read More

Your care

Latest Most read
Embracing green exports: a pathway to enter global supply chains

Embracing green exports: a pathway to enter global supply chains

This shift presents both a challenge and an opportunity for Vietnamese businesses to innovate and enhance their competitive edge in the international arena.
New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

The ministry proposes to issue a decree on the establishment, management and use of the Investment Support Fund to stabilise the investment environment, encourage and attract strategic investors and multinational corporations.
Việt Nam’s durian exports to China plummet by 80%

Việt Nam’s durian exports to China plummet by 80%

This sharp decline has had a direct impact on Việt Nam’s fruit and vegetable export revenue, which stood at US$416 million in January 2025, marking a 11.3 per cent decrease month-on-month and a 5.2 per cent drop year-on-year.
Coconut exports reach 14-year high

Coconut exports reach 14-year high

In 2024, fresh coconut and coconut product exports surpassed US$1 billion, marking the highest figure in the past 14 years.
Shrimp exports grow in the first month of 2025

Shrimp exports grow in the first month of 2025

According to data from the Việt Nam Association of Seafood Exporters and Producers (VASEP), shrimp products recorded a 13 per cent increase in export value in January 2025, reaching a total of $273.3 million.
Mobile Version