Shrinking orders and rising costs squeeze the industry

“After May 20, the company’s orders will fall to around 50%, and by early June, we may have no orders left in the pipeline,” Pham Van Viet, chairman of Viet Thang Jean Co., Ltd. (VitaJean), said.

His remarks mirror a broader trend across the industry: shrinking orders, volatile demand and rising production costs.

Instead of large contracts, buyers are increasingly placing smaller, short-term orders, making production planning more difficult. Consequently, companies have to continuously adjust production plans to keep their lines running, though such stopgap measures are only viable in the short term.

At the same time, logistics costs have risen significantly. Shipping fees have more than doubled in some cases to US$4,200–US$4,500 per container, driven by geopolitical tensions that have disrupted traditional routes and increased transit times, insurance and fuel expenses.

Input costs have also climbed by about 20%, while selling prices remain under pressure. Many companies say profitability has been squeezed to near zero, with the immediate priority now being to sustain production rather than generate profit.

VitaJean is not an isolated case but highlights a wider industry trend. Major export markets show mixed trends. Demand in the United States has declined sharply, while the EU stays subdued. Markets in Asia, including Japan and the Republic of Korea, have recorded only modest growth.

Despite these challenges, Vietnam’s textile exports still posted slight growth, reaching over US$8.8 billion in the first quarter of 2026, up 1.9% year on year. However, experts warn that this growth remains fragile amid global uncertainties.

According to the Ministry of Industry and Trade, geopolitical tensions and supply chain disruptions are likely to continue affecting trade performance in the coming months.

Technology and restructuring gain momentum

Amid these headwinds, the domestic garment and textile industry is accelerating structural changes to stay competitive.

According to Hoang Manh Cam, Chief of Office of the Board at Vietnam National Textile and Garment Group (Vinatex), despite intensifying global competition, the industry continues to capture opportunities in major markets, particularly the United States, with its apparel share rising from 18.9% to 21.5% in 2025, surpassing China.

The country is also viewed as one of the most competitive manufacturing hubs in Asia, thanks to its production flexibility and reliability in global supply chains. This is why many major brands, including those in the premium segment, are prioritising orders from Vietnam.

However, Cam cautioned that growing reliance on the US also creates risks. Market diversification and spreading demand risk are becoming urgent priorities.

From an industry association perspective, Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), noted that the industry is entering a “new competitive landscape” where technology, sustainability and supply chain resilience are key. This compels firms to transform production models, with technology at the core.

“Investment in technology, automation, robotics, and AI is no longer optional - it is mandatory to maintain competitiveness. At the same time, green transformation and energy efficiency will become key criteria in supplier selection,” Giang emphasised.

Giang revealed that VITAS is implementing training programmes, connecting resources, and updating technological trends to help businesses accelerate their transformation process.

Textile and garment exports lose momentum as growth remains modest

VOV.VN - Vietnam’s textile and garment exports posted only marginal growth in early 2026, indicating a slower recovery in global demand despite maintaining an overall upward trend.