How to Move Your Supplier From China To Vietnam Guide // 5-Steps To Move Your Manufacturer To Vietnam
As global manufacturing faces mounting pressure from the escalating U.S.–China trade war and a new round of tariffs announced in 2025, more businesses are rethinking their reliance on China and seeking alternative supply chain strategies. Vietnam has emerged as the leading destination for companies looking to diversify away from China, offering competitive costs, a skilled workforce, and a rapidly expanding manufacturing ecosystem. While the opportunities are substantial, the shift to Vietnam also comes with its own set of complexities and strategic considerations.
This blog post serves as a practical guide for businesses of all sizes considering or currently transitioning from China to Vietnam. Whether you’re a small business hoping to reduce exposure to tariffs, a multinational seeking to future-proof your supply chain, or an entrepreneur looking for more resilient and agile operations, understanding the ins and outs of this move is essential for long-term success.
We’ll break down the most critical steps in relocating manufacturing, comparing the business climates, regulatory environments, labor markets, and cultural differences of China and Vietnam. You’ll also learn how to identify and partner with qualified Vietnamese manufacturers, overcome logistical hurdles, and manage compliance in a new legal landscape.
Finally, we’ll highlight the strategic advantages of moving to Vietnam, including its participation in major free trade agreements, its improving infrastructure, and its position as a gateway to Southeast Asian markets. If you’re planning to move production out of China, this post will equip you with the insights, tools, and confidence to make a seamless transition and secure your company’s competitive edge for the future.
We developed a 5-step process for moving manufacturing from China to Vietnam—scroll below for the guide. If you want insights on getting started with manufacturing in Vietnam, whether you're a small or large business, email us, and we’ll be happy to help! Depending on your business sector and investment volume, we can provide personal insights.
Is Vietnam Becoming The “New China”?
There is a lot of hype surrounding manufacturing in Vietnam, especially after the US-China Trade War, resulting in trillions of dollars of capital leaving China. Most of that capital ended up in Vietnam – a rising regional manufacturing star. Chinese manufacturers are relocating to Vietnam to reduce labor costs and expand their production capabilities. So, what is the first choice for manufacturers leaving China? Vietnam, of course!
Vietnam has a population of 95 million, making it one of the easiest countries in the region to find a suitable workforce, including academically educated personnel. Vietnam borders the southern Chinese province of Guangxi (a large manufacturing province) near Shenzhen and Hong Kong. Most manufacturing in Vietnam is concentrated in Hanoi Province, located at the northern edge of China.
The trend of factories relocating to Vietnam appears to be accelerating as manufacturers exit China, driven by rising salaries in China and the targeting of Chinese exports by US and EU tariffs. Other factors contributing to the decline in Chinese manufacturing include the COVID-19 pandemic, currency devaluations, and the Chinese Government’s push to transition to high-end industrial manufacturing, such as aerospace and technology. In contrast, Vietnamese manufacturing remains focused on essential consumer goods.
Vietnam’s proximity to China makes importing goods from China easy by road, while labor costs remain 1/3rd of China’s. Shipping from Vietnam takes the same time to reach international markets in the US and Europe, providing significant savings for businesses. There are shipping options by sea freight, air freight, and rail. As a result, Vietnam is rapidly becoming the #1 choice for Chinese outsourcing giants, including domestic Chinese companies.
Vietnam’s Manufacturing History
Vietnam has a long history of manufacturing goods, specifically handcrafted items. During French colonial rule in the early 20th century, Vietnam was a large handicraft manufacturing economy. The handicraft industry in Vietnam specializes in the fabrication and delicate sewing of products. However, it was never a large-scale manufacturing economy, and the country is now undergoing a shift in this direction.
US corporations such as Nike, moving billions of dollars to Vietnam, are reshaping the manufacturing landscape and echoing a migration in the early 80s when companies from the US and East Asia moved to mainland China and established large factories (after the country opened up to trade).
Many pioneer companies that were the first to invest in China are now manufacturing in Vietnam. Want to make history? Now is the best time to get involved in Vietnam. The manufacturing sector has grown so much that even small-scale investments are viable, and you can manufacture virtually every product under the sun at a low cost.
Chinese Suppliers Are Moving To Vietnam
Want proof that Vietnam is the next big thing in Asia? Consider the initiatives of domestic manufacturers in the area. Chinese manufacturers are seeking lower labor costs and can save as much as two-thirds by relocating their manufacturing operations to Vietnam. If you’ve dealt with a Chinese manufacturer in the last ten years, there’s a chance they’ve started producing in Vietnam and are moving part of their operations there.
The larger your Chinese supplier, the more likely they are to have outsourced some of their production to Vietnam. Many Chinese manufacturers are now engaging in “double-dealing” by manufacturing part of their production in China while outsourcing the rest to Vietnam. Some Chinese companies maintain their main production lines in China, while manufacturing small parts in Vietnam; others have relocated their factories entirely to Vietnam.
If you’ve worked in China for a long time and are accustomed to dealing with Chinese suppliers, this knowledge will prove helpful in Vietnam, as many cultural nuances are the same in both countries. Chinese also influence Vietnamese suppliers and pass down knowledge to the workers. It’s not uncommon to walk into a 5,000-person factory in Vietnam and find out 500 workers are from China.
We at Cosmo Sourcing find that most mid-level managers in both countries are fluent in 3 languages: Chinese, Vietnamese, and English. As a result, transferring manufacturing from China to Vietnam is a relatively straightforward process. If you have specification sheets, product documentation, and checklists written in both Chinese and English, you’ll find it easy to translate them into Vietnamese.
What Companies Are Moving From China To Vietnam?
Apple, Nike, Adidas, LG, and Samsung are made in Vietnam!
Companies such as Apple, LG, Panasonic, Nike, and others have partially or entirely shifted production to Vietnam. As a result, we constantly deal with manufacturers in Vietnam, and there is widespread anticipation that this country will benefit immensely from America’s push to “detach” from China for manufacturing purposes.
The US-China Trade War greatly benefited Vietnamese manufacturing, as many companies relocated to avoid international tariffs, not only to save on labor costs. The COVID-19 pandemic didn’t stop American companies from continuing the shift in manufacturing from China to Vietnam.
Example: Apple announced that it would start producing 4 million AirPod units in May 2020, effectively moving large supply chains away from China directly to Vietnam. Nearly 1/3rd of all AirPod units will now be manufactured in Vietnam. In addition, Inventec has announced plans to build a plant in Vietnam, which will be Apple’s leading partner for headphone manufacturing. The rising tensions between the US and China, which have led to an outflow of capital from China, have intensified this year. This accelerates the process of capital inflows in the Vietnamese manufacturing sector.
According to US Census Bureau reports, there was a nearly 36% increase in “Made In Vietnam” goods imported to the US in 2019, compared to a net decrease of 16% for all “Made In China” goods.
On average, the Vietnamese export market doubles every 2-3 years, and the trend appears to have accelerated significantly over the last 24 months.
As the largest companies globally, from footwear to tech, are leading the revolution in Vietnamese manufacturing, many small and mid-sized manufacturers are expected to follow suit. Vietnam’s innovation in footwear makes it an ideal choice for small business owners, as Vietnamese suppliers typically have lower minimum order quantities (MOQs) than their Chinese counterparts. At the same time, their product costs offer significant savings on consumer goods.
Nike currently manufactures nearly 50% of its products in Vietnam. Nike manufactures footwear and a range of products, including backpacks, jerseys, sports bottles, and other accessories. In 2010, the company moved from China to Vietnam, effectively shifting 37% of its total product manufacturing to Vietnam. China was still a significant manufacturing center for Nike at the time, with 34% of all Nike products manufactured there. Last year, Nike ramped up their production in Vietnam with new factories, and the company now manufactures 47% of its total products in Vietnam.
The trends in electronics manufacturing are as follows. Nintendo announced that it would manufacture Switch consoles in Vietnam. The automotive industry is also slowly expanding into Vietnam. Komatsu, a major manufacturer of motor vehicles in Asia, has announced plans to establish large-scale production facilities in Vietnam.
Nike reduced its manufacturing in China to a mere 27%. Adidas closely follows suit and manufactures a significant % of its products in Vietnam. Vietnam is popular not only among textile and footwear giants but also among tech giants. LG, Samsung, Foxconn, Apple, and Nintendo are heavily investing in Vietnam.
Moving Manufacturing From China To Vietnam// Step-by-Step Process
Step_01 // Find Out If You Can Manufacture In Vietnam
The first step is determining if the product you want to manufacture can be made in Vietnam. China is a “do it all” destination that can manufacture virtually every product and source material domestically. Vietnam’s population is ten times smaller than China's, focusing on a few key niche markets, mostly basic consumer goods. The following is a list of the top exports of the Vietnamese economy:
Crude oil: 22%.
Textiles: 17%
Footwear: 10%
Seafood/fisheries: 10%.
Electronics: 4%.
Source: Wikipedia.
Other significant exports include transportation products, auto machinery, wooden products, furniture, rice, and coffee. If your business is focused on any of the niches mentioned above, you’ll quickly get your product made in Vietnam. In addition, Vietnam is the world’s leading destination for manufacturing fashion and apparel, footwear, and handicrafts.
It is also perfect for a diverse range of electronics. We’ve seen an increase in metal and medical equipment (read our guides on metal manufacturing and medical manufacturing in Vietnam). The top export partners of Vietnam were the United States (19%), Japan (13%), China (10%), Australia (7%), Singapore (5%), Germany (4%), and the United Kingdom (4%).
China is more advantageous than Vietnam due to its size, particularly in terms of workforce, experience, and machinery. However, you risk not manufacturing your product if it requires higher technical precision. For example, even though it’s easy to manufacture car wires in Vietnam, it’s nearly impossible to manufacture airplane engines. Vietnam is excellent for products that require minimal workforce training and follow simple designs, such as footwear, electronics, and clothes.
We have recently partnered with medical manufacturers and metal processing factories, enabling us to connect our clients with sophisticated manufacturers across the nation. The bottom line is this: Vietnam’s labor force lacks experience in industrial manufacturing compared to China. If the product is complex, stick to China. If it’s relatively straightforward to make, opt for Vietnam. Manufacturers operate in various niches in Vietnam, but many are relatively new and will require time to gain experience and establish themselves in their respective markets.
The last consideration is the state of the factories and the availability of equipment and tools. If you attempt to transfer the Vietnam documentation, you may encounter issues with an existing Chinese supplier. For instance, if your Chinese supplier designed custom tooling for manufacturing your product (such as molds for product designs), they may refuse to transfer this to your new Vietnamese supplier, as they want to retain their investment in the tooling.
We advise our clients to own the Intellectual Property rights to their Chinese-made products before they attempt to move manufacturing to China. Otherwise, the Chinese supplier will try to bind you to his factory permanently. We can work around this by finding new suppliers in Vietnam that can design custom molds. However, this is a bit more challenging than in China, which has an abundant pool of academically educated labor.
Step_02 // Calculate Costs & Savings
Let’s look at the numbers. Why move to Vietnam if not to reduce costs and increase profits? It’s time to take out the calculator and estimate how much you’ll save on the workforce. We can provide a quote for labor costs in your area of interest, but you’ll generally pay one-third of what you’d pay in China. Example: While a Chinese factory worker may demand $600 per month, his Vietnamese equivalent will demand $200 or less.
Labor costs are manufacturers’ leading consideration when they move production from China to Vietnam. China also faces rising labor costs in its large cities, making it increasingly difficult to find long-term employees. For comparison, the wages in China have increased by over 60% during the last ten years. If your company intends to conduct business in China for the next decade, expect a payroll increase of at least 50%. With the new tariffs imposed by the Trump administration, China is no longer the most cost-effective country in which to do business.
In Vietnam, most factories pay employees the minimum wage set forth by each province. The minimum wage range in Vietnam varies from 2,500,000 VND to 4,000,000 VND. The highest wages are paid in provinces with the best infrastructure, such as Hanoi Province (next to China) and Ho Chi Minh City (the largest city). The wages are lower outside these areas, but the infrastructure is less developed.
The minimum wage in Vietnam increases at an average annual rate of 5%, making it relatively easy for employers to handle the adjustments. Example: In 2019, the minimum wage increased by 5.3%, following a 6.5% rise the previous year. The low labor costs, proximity to China, and abundant workforce make Vietnam one of the most favorable destinations for foreign investors looking to manufacture products.
Ultimately, do savings in labor costs justify the move away from China? The answer is yes. With nearly 60% in savings for labor costs, companies can easily double their production output for the same price they’re currently paying in China. Effectively, their expenses remain the same while their profits double.
China has several advantages regarding its labor force, including the sheer scale of the workforce (numbering 788,000,000 adults), which makes it easier to find academically qualified personnel in China than in Vietnam. China is undoubtedly more straightforward to do business with in terms of bureaucracy and infrastructure, but Vietnam’s operational costs make it a far more attractive destination.
Step_03 // Prepare For Relocation (Facilities & Resources)
Do you have your factory in China? If so, you must prepare to move the facilities and equipment to your new Vietnamese factory. If you don’t have your factory, the move will be more comfortable as you only have to relocate your capital and find a new Vietnamese supplier (we can help you with that!). However, when operating a large-capacity factory in China and considering relocation to Vietnam, several key factors must be taken into account.
Warning: The cost of relocating your factory from China to Vietnam may exceed the savings in labor costs, especially for factories with advanced machinery. Moving your entire supply chain to Vietnam may cost over $1 million to convert and transfer the machinery, production lines, and to facilitate training and employee transfers. Consider the long-term benefits before deciding to relocate your factory to Vietnam.
Regarding real estate, you have two options in Vietnam: 1) Buy the land, 2) Lease the land. As a foreign investor, it’s in your best interest to lease land in one of the “Industrial Parks” invented by the Vietnamese Government due to better infrastructure for the factory and tax incentives. The average lease cost is around $90 per m2 - that is, if you plan to put your factory on the ground.
“Vietnam has 325 industrial parks with a total area of 94,900 hectares. HCM City, Bac Ninh, and Thanh Hoa are leading in attracting investment to these parks. Hanoi has also attracted foreign businesses, especially to many industrial parks in suburban regions.” Source: NationThailand
If you lease space in one of the existing factories in Industrial Parks, such as in parks near the capital, HCMC, the price is significantly lower. It’s possible to obtain a lease for as little as $ 3-$4 per square meter. The land is the first thing you should purchase when you move the factory because land in Industrial Parks is scarce, and the sooner you sign a contract, the better. In addition, Chinese investors are acquiring factories in Industrial Parks as an investment, thereby increasing the land area yearly.
Pro Tip: Consider signing a long-term lease in an industrial park to save money and preserve the space.
Aside from land or space, consider the resources and machinery at your disposal. Moving machinery is the highest expense, especially if you have assembly lines in China. Essential production items, such as molding and electrical components, are imported directly from China, and existing Vietnamese suppliers heavily rely on China for various industries. For example, nearly 80% of all electronic components used in Vietnam's electronic manufacturing are imported from China. Vietnam imports 70% of the textiles it uses in the fashion industry from China.
Prepare to spend tens of thousands of dollars moving your equipment from your existing Chinese facilities to the new Vietnamese facilities. If you only have to move capital, this will be easier as Vietnam has a relatively modern banking sector. In addition, despite relying on China for materials, Vietnam has a significant advantage - geographic proximity to China. The country borders China and has few restrictions on goods entering from China, making it easy to transport the raw materials you need by land.
Step_04 // Find A Sourcing Agent
If you’re trying to move from China to Vietnam and don’t have a factory, you need a sourcing agent. The sourcing agent will connect you with qualified suppliers who can manufacture your product in Vietnam. Typically, sourcing agents have extensive experience working with thousands of factory owners and are familiar with which ones can manufacture your product cost-effectively. They charge a one-time fee and assist you in signing a contract with the supplier, while preserving your Intellectual Property (read more about IP in Vietnam).
Sourcing agencies are critical in Vietnam because factory owners often lack listings on Alibaba or Global Sources, and they’re difficult to contact unless you have boots on the ground.
Example: If you search for “phone case” on Alibaba, over 95% of all manufacturers will be based in China, while barely 0.5-1% will be located in Vietnam. In this case, the sourcing agent can help you manufacture your phone cases in Vietnam at a lower cost than in China. Sourcing companies will also connect you with top shipping companies, ensuring your product arrives on time and in good condition. At Cosmo Sourcing, we support clients across the most popular industries in Vietnam. Recently, we have been assisting clients in complex industries, such as medical manufacturing and electronics.
Step_05 // Start Production & Ship
You’ve signed a contract, paid the supplier, and got the “Made In Vietnam” seal on your products. So what is the final step? Getting it to your doorstep, of course! China has a significant advantage over Vietnam because the Chinese Government has invested trillions of dollars in shipping infrastructure, including Asia’s largest rail network and the most sophisticated seaports.
In China, you have hundreds of competing forwarders and shipping companies offering a wide range of shipping options. Vietnam is slightly less developed regarding logistics, but all the popular shipping companies are present (FedEx, DHL, etc.). It also takes 3-4 weeks for goods to reach US ports from Vietnam, which is nearly the same as the time it takes for goods to reach US ports from China.
The World Bank released a “Logistics Performance Index,” which measures the level of development of a country’s shipping infrastructure. The index analyzes 160 countries, and Vietnam ranks highly at #39, while China takes the #26 spot. Vietnam is conveniently located on the Pacific Coast and boasts a much higher ranking than neighboring countries such as Cambodia (#98th) and Bangladesh (#100th).
Vietnam is nearly on par with China in terms of shipping infrastructure. The Vietnamese Government is investing $5 billion in a new expressway connecting the north to the south, thereby accelerating Vietnam’s growth in shipping infrastructure. At Cosmo Sourcing, we can arrange the most convenient shipping terms from your Vietnamese factory to any seaport of your choice. We’ll even help you arrange shipping from the factory to an Amazon warehouse in the US.
Cosmo Sourcing // Your Trusted Partner In Vietnam
If you want to source from Vietnam, contact the Cosmo Sourcing team; we have been helping clients source from Vietnam since 2014. Cosmo Sourcing has the skills and the team to find you the best supplier possible. We are also established in China and are among the few companies that can find suppliers in China and Vietnam, and select the one you think is best.
Our Vietnam Sourcing services enable you to access new manufacturers that are not available in China, allowing you to avoid Tariffs. Our services are designed to take your idea, turn it into a product, and ship it to its final destination. Cosmo can handle everything from creating a product spec sheet to validating, sourcing, ordering, evaluating samples, arranging inspections, finding freight forwarders, ensuring quality assurance, negotiating, and shipping. We aim to handle every single step of your business in Vietnam for you.
If you start a new business, finding products and suppliers for your products is one of many things you need to handle. Our services are designed to handle every aspect of your business in China and Vietnam, allowing you to focus on growing your own business.
We have helped clients from Fortune 500 companies, brick-and-mortar stores, FBA sellers, and brand-new businesses. So don’t hesitate to contact us and let us know how we can help you.