China and Vietnam top future low-cost sourcing locations

31 August 2011

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31 August 2011 | Adam Leach

Vietnam is equally as popular as China as a potential location among buyers embarking on a low-cost sourcing strategy.

A survey of 102 retail companies, published yesterday by Barclays Corporate found 13 per cent of respondents identified Vietnam as the location where they plan to source footwear, clothing, accessories and industrial wholesale items. In contrast, Vietnam was identified as a second favourite current supplier by only 2 per cent and third preferred by 3 per cent. China was also identified by 13 per cent of respondents who plan to start sourcing from the country.

Richard Lowe, head of retail and wholesale at Barclays Corporate, said: “The challenge for rival destinations such as Vietnam is that China still offers great value and other countries will be hard pushed to take pole position.”

Belgium, Hong Kong, Romania and Brazil were also identified by small numbers of respondents as potential future locations.

China remained the most popular current sourcing location, with 35 per cent buying from the country. The US and Germany took second a third places respectively.

“The Chinese government needs to balance the country’s growth aspirations while keeping inflation in check and, although inflation has probably peaked, there are still significant underlying pressures which mean inflation is likely to fall back but, slowly,” added Lowe.

Earlier this year, Vietnam was also rated the most financially attractive country in the AT Kearney Global Services Location Index. Overall it moved up to eight position overall, while China remained in second behind India.

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