Vietnam is one of the fastest-growing Southeast Asian economies today, thanks to both endogenous and exogenous factors. The Vietnam economic sectors are emerging as leaders in supply and manufacturing, with the manufacturing sector already representing 25% of the GDP and private consumption increasing at an annual rate of 20%.
Among the most attractive Vietnam economic sectors for exporting or investing are textiles, where Vietnam has become the world’s second-largest exporter of garments after China, surpassing Bangladesh. Manufacturers and investors are increasingly turning to Vietnam due to more favorable economic conditions compared to China, including 50% lower labor costs with hourly rates of USD 2.99 and USD 6.50 for Vietnamese and Chinese workers, respectively.
The Vietnam economic sectors: electronics, surpassing coffee, textiles, and rice to become the country’s primary export, presents a key business opportunity for foreign technology, notably exemplified by Samsung’s investment of USD 17.5 billion and establishing Vietnam as a global manufacturing base for its products. Pharmaceutical sector forecasts indicate significant growth to USD 16.1 billion by 2026, driven by the Vietnamese government’s strategies for global healthcare coverage and a growing consumer market seeking fairer healthcare access. The pharmaceutical sector’s volume reached around USD 6.4 billion in 2021 through the collective efforts of over 250 factories, 200 import-export units, 4,300 wholesalers, and 62,000 retailers.
The automotive sector in Vietnam demonstrates the country’s ambitious stance, with sales estimates nearing 2 million units by 2035. Vietnam’s rising purchasing power is reflected in expectations that 9% of Vietnamese households will own a car by 2025 and 30% by 2030, comparable to Indian and Filipino household levels. Despite regional competition, Vietnam aims to build its automotive industry for export, featuring models like those manufactured by VinFast.
E-commerce is equally transforming Vietnam into an attractive market for foreign investment. The expanding economy and middle class are fostering a robust consumer culture, significantly increasing available income levels. The pandemic has further boosted demand for e-commerce retail, with an 18% sector growth equating to USD 11.8 billion in 2020. The favorable conditions for starting a business, including reduced or zero customs tariffs on imported or exported goods from other countries, present promising prospects for this Vietnam economic sector that deserve attention.
Antonio Viñal
Lawyer
AVCO Legal
madrid@avco.legal
