Vietnamese goods made in. . . China

More and more Vietnamese enterprises are having their production work outsourced to China. The production in China allows Vietnamese companies to reduce production costs and diversify product designs, while they do not need to have high initial investment capital.

The products made in China are mostly products that do not require high production technology, such as clothes, footwear products or office stationery.

Most of the garment and footwear products now available at supermarkets have labels in Vietnamese, but the labels indicate that the products are from China. These include Hong Phat, Phuong Quan brand footwear products, Dung brand fashion, or To Kim Hai brand clothes.

Made-in-China but labeled as Vietnamese products

Dang, Director of VT Fashion Company, said in general, Vietnamese companies only produce 40 percent of khaki-made products and 20 percent of jeans, while they have other products outsourced to other countries in order to save on production costs.

China is the place where the most Vietnamese companies place orders, because it can provide products at the lowest prices. For example, medium-class jeans are priced at 150,000-190,000 dong per pair, while higher class jeans are priced at 267,000 dong. In Vietnam, jean prices can vary greatly, depending on the prestige and location of shops.

Nguyen Thi Thanh, the owner of a kiosk at An Dong Market in HCM City who specializes in wholesaling clothes to supermarkets and shops in the city, said it is very easy to place orders with Chinese producers.

“If you need the products with no label, you can purchase them from wholesalers in Bac Ninh, Mong Cai and Lang Son provinces. The price is low at 100,000 dong per product. Higher class products are priced at 250,000 dong and you can place orders with merchants at border markets or at the markets in Guang Zhou,” she said. “But if you want high quality products with prices over 300,000 dong, you need to go directly to Shen Zhen factories to place orders”.

Thanh said that many Vietnamese fashion brands order products with Chinese producers, and that they then bring the products to Vietnam and sell the products under their own brands.

Product outsourcing has become a trend

Phan Xuan Hong, Deputy Chairman of the Vietnam Textile and Apparel Association Vitas, affirmed it is true that many Vietnamese companies purchased products from Cambodia or China to sell under their own brands. It is because Cambodia makes cheaper products than Vietnam, while Chinese-made products are diversified in designs and have different price levels.

Truong Quang Luyen, Deputy General Director of Hong Ha Office Stationery Company, said it is necessary to import materials and products to sell, because this allows for more competitive prices and results in more diverse products.

Luyen said in order to make simple products like staplers or pens, investors need large amounts of capital in order to set up factories. Meanwhile, investors do not have to spend as much on initial investment capital if they import products.

Vo Van Thanh Nghia, General Director of Thien Long Group, calls this a kind of cooperation in production.

“Labor costs are increasingly high, while large amounts of capital are required to lease land to set up workshops. Therefore, Thien Long wants to cooperate with domestic partners or Chinese, Cambodian and Lao partners in production.”

“The key issue in production cooperation is that Thien Long must control the design, production techniques, and most importantly, quality control of our products, because Thien Long must be responsible for every product it sells,” Nghia said.

Nguyen Huu Phung, Chairman of Viet Fashion Chairman Company, also said it is necessary to have products outsourced to other countries if enterprises want to speed up their development. However, he warns that this will only benefit the enterprises that have big distribution networks, good management, and design staffs. It will be difficult for small companies to do this, since they cannot provide the best prices not can they control the quality of their products.

According to the HCM City Customs Agency, in the first six months of 2010, the import revenue from stationery products was $6.4 million dong, and most of the products came from China. Meanwhile, Vietnam imported $20 million worth of garment products from China, Thailand, Singapore and Korea. The import revenue of footwear products was $82.4 millio,n which came mainly from China and Hong Kong.

-Saigon tiep thi

Tags: made in China, Vietnamese goods