Vietnam has emerged as one of the world's leading manufacturing destinations, achieving 8% GDP growth in 2025 with US$930+ billion in total trade. With 11 million skilled workers, 18 free trade agreements (including CPTPP and RCEP), and a February 2025 Comprehensive Strategic Partnership with New Zealand targeting NZ$3 billion in bilateral trade by 2026, Vietnam offers unprecedented opportunities for Kiwi businesses.
Vietnam has emerged as one of the world's leading manufacturing destinations, achieving 8% GDP growth in 2025 with US$930+ billion in total trade. With 11 million skilled workers, 18 free trade agreements (including CPTPP and RCEP), and a February 2025 Comprehensive Strategic Partnership with New Zealand targeting NZ$3 billion in bilateral trade by 2026, Vietnam offers unprecedented opportunities for Kiwi businesses.
The country excels in electronics (US$125B in exports), textiles (US$44B), footwear (US$24B), and furniture (US$16.3B), while rapidly advancing in sustainability and high-tech manufacturing. Key advantages include competitive costs, reduced tariffs (up to 90% elimination on covered products), government incentives, strategic location, and growing commitment to environmental and labor standards. Vietnam is transitioning from a low-cost assembly hub to a sophisticated manufacturing powerhouse with Industry 4.0 capabilities.
Here's something I've been noticing lately: every savvy business owner I talk to seems to be asking the same question - "Should we be sourcing from Vietnam?"
The short answer? Probably yes.
But let me tell you why this moment in particular is different, and why Vietnam isn't just another manufacturing destination to add to your spreadsheet.
Everyone knows China as the world's factory. But here's what's happening quietly in Southeast Asia: Vietnam just posted 8% GDP growth in 2025. Their manufacturing sector now represents a quarter of their entire economy. And they're doing it with over 11 million skilled workers across more than 100,000 registered factories.
This isn't a country playing catch-up anymore. This is a manufacturing powerhouse that's fully arrived.
I remember when Vietnam was mostly known for textiles and basic assembly work. Today? They're assembling your iPhone, manufacturing semiconductors, and producing everything from sustainable fashion to precision automotive components. Samsung, Intel, LG, Foxconn - they've all planted massive operations here, and they're not doing it for the Instagram photos.
Something significant happened just last month that most people missed.
New Zealand and Vietnam upgraded their relationship to a "Comprehensive Strategic Partnership." Sounds bureaucratic, right? But here's what it actually means for Kiwi businesses:
We're targeting NZ$3 billion in bilateral trade by 2026 - more than double what we're doing now. The doors have been flung wide open for closer business collaboration, streamlined market access, and enhanced cooperation in digital transformation and sustainability.
This isn't just diplomatic theatre. This is New Zealand saying "Vietnam matters to our economic future."
And if you're running a business that imports products, you need to pay attention.
Let's talk about something most people find boring but could save you serious money: trade agreements.
Vietnam has locked in 18 free trade agreements. Eighteen. That's not a typo.
They're part of CPTPP (which includes us), RCEP (the world's largest trade bloc), and a bunch of others that basically mean: lower tariffs, easier customs, and access to markets you didn't even know you needed.
What does this mean practically? Close to 90% of tariffs on covered products just... disappear. The money you used to pay in import duties can now go toward growing your business instead of feeding government coffers.
I don't know about you, but I'd rather keep that money.
Okay, let's get specific. What's actually worth sourcing from Vietnam in 2026?
Vietnam isn't just assembling electronics anymore - they're designing chips, doing advanced packaging, and moving into higher-value production. We're talking smartphones, laptops, consumer electronics, and components that power the devices you're using right now.
The government has a National Semiconductor Strategy running to 2030. They're serious about becoming a tech manufacturing hub, not just an assembly line.
Here's where it gets interesting. Vietnam is the world's third-largest textile exporter, making clothes for Nike, Adidas, H&M, Zara, and Uniqlo.
But here's the twist: 70% of textile factories are now doing lean manufacturing, cutting waste by up to 15% annually. They're adopting eco-friendly practices, using recycled fibres, and meeting EU sustainability standards.
If you're in the fashion game and your customers care about sustainability (and they do), Vietnam can help you tell that story authentically.
Second-largest footwear exporter globally. Everything from flip-flops to high-end fashion shoes. The craftsmanship is exceptional, the pricing is competitive, and major global brands trust Vietnamese manufacturers with their entire lines.
Vietnamese furniture makers are artists. Whether you want traditional wooden pieces or contemporary designs, indoor or outdoor, they've got the skills and the materials. The wood quality is outstanding, and the attention to detail rivals anything you'd find in high-cost manufacturing countries.
This one surprised me. Vietnam is getting seriously committed to sustainable manufacturing:
With their commitment to the Paris Agreement (27% carbon reduction by 2030) and their National Green Growth Strategy, Vietnam is positioning itself as the place to source if you care about your environmental impact.
And let's be honest - in 2026, you should care about your environmental impact.
Let's talk about what everyone's really wondering: is it actually cheaper?
Yes. But it's more nuanced than just "cheap labour."
Labour costs in Vietnam are competitive, but that's not the whole story. The real savings come from:
The tariff elimination we talked about - that's real money back in your pocket.
Government incentives - tax breaks for high-tech companies, tax holidays for manufacturing investments, import duty exemptions on machinery. The Vietnamese government is basically rolling out a red carpet for foreign businesses.
Infrastructure investments - they're pouring money into industrial parks, modernizing ports, developing cold chain logistics, and building out Industry 4.0 capabilities. This means lower logistics costs and better supply chain efficiency for you.
When you add it all up, Vietnam offers something rare: competitive pricing without compromising on quality or efficiency.
Here's something that matters more every year: can you actually feel good about where your products come from?
Vietnam is working on this. Hard.
They've implemented stricter environmental regulations on waste, emissions, and water usage. They've updated their Labour Code to improve worker protections. The ILO has initiatives uplifting conditions for 3.2 million workers across 4,000+ factories.
Are they perfect? No. But they're moving in the right direction, and they're doing it faster than many other manufacturing hubs.
For certifications, look for:
These aren't just badges to stick on your website. They're proof that your supply chain can handle the scrutiny your customers (and increasingly, regulators) are demanding.
Okay, so you're convinced Vietnam makes sense. How do you actually start sourcing there without making expensive mistakes?
Vietnamese business culture values relationships and respect for hierarchy. This isn't a "send an email and place an order" situation. Visit your suppliers. Understand their operations. Build trust over time.
I know it's tempting to just fire off emails and hope for the best, but that's not how you find reliable partners.
Not all suppliers are created equal. You need to:
This takes time. Do it anyway.
Visit factories. Hire third-party inspection agencies. Set up regular inspection schedules. Establish clear quality standards.
The cost of fixing quality issues after products ship is way higher than the cost of preventing them in the first place.
Unless you're already an expert in Vietnamese manufacturing, you need local expertise. This could mean:
The people who've been doing this for years know things you don't. Use their knowledge.
Work with suppliers who understand CPTPP, RCEP, and AANZFTA requirements. Make sure you get proper documentation for preferential tariff treatment. Understand rules of origin.
This is where you can save serious money, but only if you do it right.
Vietnam is rapidly digitizing. Look for suppliers with Industry 4.0 capabilities, automated production systems, and digital communication infrastructure. You want partners who can give you real-time data on your orders, not someone who needs three days to find out what's happening on the factory floor.
Here's what I'm watching for the rest of 2025 and into 2026:
Vietnam is targeting 8% GDP growth or higher. Their manufacturing PMI hit 54.5 in October 2025, showing robust expansion. They're investing heavily in high-tech manufacturing, semiconductors, green industries, and value-added production.
The US remains their largest export market (US$138.6 billion in the first 11 months of 2025), though there's always the possibility of tariff changes depending on American politics.
But here's the key insight: Vietnam is transitioning from "cheap assembly location" to "high-value manufacturing hub." They're moving up the value chain into electronics, chemicals, precision engineering, and medical devices.
As a sourcing destination, Vietnam isn't just about saving money anymore. It's about accessing capabilities that didn't exist there five years ago.
Look, I've watched a lot of manufacturing trends come and go. But what's happening with Vietnam feels different.
The combination of strong economic growth, extensive trade agreements (especially the February 2025 partnership with New Zealand), commitment to sustainability, and movement toward high-value manufacturing creates a unique window of opportunity.
The businesses that establish relationships with Vietnamese suppliers now - while the NZ-Vietnam partnership is fresh and both governments are actively supporting trade expansion - are going to have a significant advantage over those who wait.
Vietnam hit US$930+ billion in total trade volume in 2025. They've got 11 million skilled manufacturing workers. They're part of 18 trade agreements. And they just became New Zealand's Comprehensive Strategic Partner.
The pieces are aligned in a way they haven't been before.
If you're importing products or thinking about manufacturing something new, Vietnam deserves a serious look.
Not because it's the cheapest option (though it's competitive).
Not because everyone else is doing it (though they are).
But because Vietnam offers something rare in manufacturing: the combination of quality, cost-effectiveness, sustainability commitments, and preferential trade access that can genuinely improve your business.
The February 2025 Comprehensive Strategic Partnership with New Zealand is the cherry on top - we've got governmental support and a clear target of NZ$3 billion in bilateral trade by 2026.
Whether you need electronics, textiles, footwear, furniture, or sustainable products, Vietnam has the capabilities. The question isn't really "Should we source from Vietnam?" anymore.
The question is "How soon can we start?"
Want to explore sourcing from Vietnam without the headaches? We help Kiwi businesses navigate the complexities of international trade and build strong supplier relationships. Talk to our sourcing specialists and let's figure out if Vietnam makes sense for your business.
Sources: Vietnam General Statistics Office, Vietnam Ministry of Finance, NZ Ministry of Foreign Affairs and Trade, Vietnam Briefing Economic Reports 2025, S&P Global Manufacturing PMI, Vietnam Textile and Apparel Association, International Labour Organization, and various trade analyses.
Originally published July 15, 2024. Updated January 27, 2026.
