“Should we move production to Vietnam?” is a question we’ve been asked constantly over the past several years, and the honest answer has always been: it depends on what you’re making, and what you’re actually optimizing for. Here’s an updated, practical look at where the real differences sit today, beyond the headline labor-cost comparisons that dominate most generic sourcing articles.
Labor cost is real, but it’s not the whole story
Vietnam’s manufacturing labor costs remain lower than China’s in most categories, and that gap hasn’t closed. But labor cost is one input in a landed-cost equation that also includes raw material availability, component sourcing (many Vietnamese factories still import key inputs from China, which affects lead time and cost stability), tooling investment, and logistics. For product categories where Vietnam has built deep local supply chains: footwear, apparel, furniture, some electronics assembly. There, the total landed-cost advantage is significant. For categories where Vietnam still depends heavily on imported components, the labor savings can be partially offset elsewhere.
Capacity and capability have both matured, but unevenly
Vietnam’s manufacturing base has genuinely matured over the past decade, not just in volume but in capability. More factories now handle higher-complexity work than would have been realistic ten years ago. But this maturity is uneven across categories. Textiles, footwear, and furniture have deep, competitive manufacturing ecosystems. More complex electronics, precision components, and categories requiring dense local supplier networks (where you need dozens of specialized component makers within a short distance of the assembly plant) are still comparatively thinner in Vietnam than in China’s most developed manufacturing clusters.
The practical implication: “Is Vietnam ready for my product?” doesn’t have one universal answer. It depends heavily on category-specific capacity, which is exactly the kind of thing generic market reports gloss over and category-specific research doesn’t.
Lead times and MOQs are trending toward parity, but aren’t there yet for everyone
For well-established categories, lead times out of Vietnam are now competitive with China. For newer or lower-volume manufacturing relationships, minimum order quantities and lead times can still run less favorably than an equivalent, more mature relationship with a Chinese factory, simply because the buyer-supplier relationship and production planning maturity take time to build, regardless of country.
Quality control expectations haven’t lowered. If anything, they’ve gotten stricter
Buyers who assume Vietnam sourcing means relaxed QC standards are setting themselves up for problems. If anything, the newness of many buyer-supplier relationships in Vietnam (versus decade-long relationships some importers have in China) means more due diligence is warranted, not less. A supplier you’ve worked with for eight years has already been through the friction; a new one hasn’t.
What we actually tell clients
The decision to add or shift sourcing to Vietnam should be made category by category, not as a blanket strategic move. For product types with mature Vietnamese manufacturing ecosystems, the case is often strong: genuine cost advantages, improving capability, and reduced concentration risk from diversifying beyond a single country. For more complex or component-dependent products, a hybrid approach (keeping certain components or full assembly in China while shifting other production to Vietnam) is often more realistic than a full switch.
The mistake we see most often isn’t choosing the wrong country. It’s making the decision based on general “Vietnam vs. China” narratives instead of category-specific research into whether the supply chain, capacity, and quality infrastructure actually exist for the specific product being sourced.
Considering a shift in sourcing strategy and want a straight, independent read on whether Vietnam fits your specific product category? Talk to us. We don’t get paid by either side of that decision.