Textile and garment exports to the EU have decreased sharply. What does the Chairman of the Vietnam Textile and Apparel Association recommend?

Exports fall sharply due to weak purchasing power

At the Vietnam - EU Trade Forum organized by the Ministry of Industry and Trade in coordination with the Ho Chi Minh City People's Committee on the afternoon of September 14, Mr. Vu Duc Giang - Chairman of the Vietnam Textile and Apparel Association (VITAS) - said: In 2023, Vietnam's textile and garment exports will face many difficulties due to many factors such as inflation and political instability, which will restrain consumer spending from Vietnam's major export markets, including the EU - because textiles and garments are not essential goods, so orders will decrease.

Regarding the EU market, according to Mr. Vu Duc Giang, in the first 7 months of 2023, textile and garment exports to the EU reached 2.3 billion USD, down 9.6% over the same period. In August 2023, exports decreased more sharply, reaching only 330 million USD, down 17% over the same period, and it is likely that this September 2023 will continue to decrease sharply.

Mr. Vu Duc Giang - Chairman of Vietnam Textile and Apparel Association shared about the current requirements that Vietnamese textile and garment enterprises need to adapt to in order to participate in the global supply chain.

Citing information about major brands reducing orders from Vietnam, Mr. Vu Duc Giang said: Orders from Decathlon, Nike, and Adidas have decreased sharply in the past 8 months.

In addition to the decline in orders due to the economic impact, Mr. Vu Duc Giang said that Vietnamese textile and garment enterprises are also facing great challenges. Accordingly, the commitments of new-generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the Vietnam - EU Free Trade Agreement (EVFTA) have put forward the viewpoint on green use and recycling, and these are the requirements that brands require Vietnamese manufacturers to adapt to.

Another challenge, according to Mr. Vu Duc Giang, is the issue of sustainable development, greening, and standards such as labor and production transparency. “This issue is not a concern for large enterprises, but it will be a challenge for small and medium enterprises. This challenge is financial investment in infrastructure, investment in environmental protection, emission reduction, and conversion of production from coal-fired boilers to electric boilers,” Mr. Vu Duc Giang expressed.

Must change to keep the market

According to Mr. Giang, currently large enterprises such as May Viet Tien, May 10, May Bao Minh, Dong Tien... have all had to accept the "rules of the game" set by importing countries, but small enterprises will not have it easy.

In that context, Mr. Vu Duc Giang said that VITAS has some notes for Vietnamese enterprises to promptly change and adapt such as: Enterprises also need to focus on 3 core issues. First, find solutions to retain employees, especially core employees. Organize vocational training courses, train human resources for green transformation and digital transformation. Second, retain customers by temporarily accepting small orders that are not strengths and are not profitable to create jobs for employees and to build trustworthy, long-term partnerships. Exploit new markets, pay more attention to the domestic market. Third, minimize unnecessary costs of enterprises.

Regarding VITAS, according to Mr. Vu Duc Giang: The Association will continue to perform well its role of connecting businesses with businesses, businesses with brands, businesses with the Government; actively coordinate with prestigious international organizations to implement programs on labor, green energy, recycling, digital transformation, design, brand building, human resource management...; organize trade promotion delegations, create opportunities for businesses to learn, exchange experiences, and find customers.

“We always organize seminars with the participation of brands to share information for businesses to proactively adapt. We also recommend that businesses invest in infrastructure that meets the requirements of third-party assessment organizations hired by brands, including a safe, green, clean environment, switching to an electric boiler system and then an environmental system, investing in software to ensure transparency in development…” - Mr. Vu Duc Giang emphasized.

According to the Chairman of the Vietnam Textile and Apparel Association, there is a lot of information that because Bangladesh has gone green, there are many orders. However, this information is not really accurate because the three core factors that buyers set out are competitive prices, stable quality and delivery time. So "green" will be a plus point.

That does not mean we are not green, because this is an inevitable trend. Therefore, VITAS has planned to invite EU Ambassadors and AmCham Presidents to visit the factory of Tan De Sports Products Joint Stock Company in Thai Binh on November 6, 2023. This is a factory with a standard green model, when from the outside it looks like a forest but when you enter it is a factory and each area has only a few thousand workers. According to Mr. Giang, organizing a survey delegation is to help international partners have a different view of the current positive transformation of the Vietnamese textile and garment industry.

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