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Vietnam's textile industry is gradually losing its competitive edge in the US and domestic markets

• The global textile and garment industry is estimated to have an CAGR of 4% from 2022 to 2030, with high growth rates in the Chinese and Canadian markets, while other markets maintain a growth rate of 3%. The CAGR in 2021-2023 for the export of apparel and bedding items is projected to be 4%, higher than that of yarn, fabric, and other items.
• For the period 2024-2030, we expect Vietnam's textile and garment industry to grow at a higher rate than the global CAGR of 4% as capturing market share from China in the US market. Companies with a high proportion of export revenue to the US, such as TNG and MSH, will benefit. However, in the long term, Vietnam will find it challenging to gain market share in the US as declining competitive advantages.
• The domestic market, according to data from the Ministry of Industry and Trade, Vietnam's retail revenue of textiles and garments in 2023 reached 246 trillion VND (or USD 9,84 bn), equivalent to a CAGR of 6% for the period 2018-2023. According to Euromonitor data, the CAGR of retail revenue in textiles and garments and the expansion of fashion stores in Vietnam for the period 2022-2027 is 3.8%/2.1%.
• The OBM (Original Brand Manufacturing) segment in Vietnam faces fierce competition from foreign rivals as consumers tend to purchase foreign brands and the demand for online shopping is increasing. The domestic market is highly fragmented, with each fashion brand holding a market share of less than 3%. However, companies can still enter the OBM segment if they can build a strong brand image and boost online sales with a diverse range of products that suit consumer preferences.