Most companies come to Vietnam for one reason: the numbers work. Labor and production costs run meaningfully below China’s across a wide range of categories, and that gap has not closed. But cost is not why companies stay past the first order. What keeps them here is what happens once they have real production data to compare against the sales pitch.
A workforce that has caught up faster than wages have
Vietnam has built genuine manufacturing depth over the past decade, especially in footwear, apparel, furniture, and electronics assembly. Factories that were doing basic assembly ten years ago now handle far more technical work. Wages have not caught up to that capability yet, which is the actual advantage: skilled labor at a price point that is hard to find elsewhere right now.
A government that has made the paperwork easier, not the sourcing decision
Vietnam has signed a growing list of free trade agreements, including the CPTPP, EVFTA, and RCEP, that reduce tariffs on goods headed to your target markets. Licensing and import rules have gotten simpler too. None of that fixes a bad supplier match. It just means the administrative side is no longer the hard part.
The part that actually determines whether this works
The advantages above are real, but they only pay off if the supplier you picked can actually deliver at your volume and spec, and isn’t quietly subcontracting your order to someone else. That verification step is the one most companies skip when they are moving fast on a good quote, and it is the one that decides whether year two looks like year one or looks like a mess.