Retail in Asia

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Vietnam offers companies China alternative

With China’s experienced workforce, well-developed supply chain and vast scale, few people believe its position as the world’s workshop is under threat. But spiralling wage costs in China have driven a growing number of Labour-intensive manufacturers to switch to countries with lower wages, such as Bangladesh, Indonesia and Vietnam.

Unskilled workers in Vietnam are typically paid USD100-150 a month, compared to the USD300 their counterparts might receive in the manufacturing clusters of southern China. And while Vietnam’s infrastructure cannot compare with its much wealthier northern neighbour, factory managers say that they can cope with both the occasional power cuts and delays at Vietnam’s under-developed ports.

Vietnam already exports billions of dollars of basic manufactured goods such as shoes, clothes and wooden furniture to Europe and the US each year. It surpassed China in 2010 as the biggest source of footwear for Nike, the international sports brand.

(Source: CNBC)