With $31.7 billion exported through August, Vietnam still has a path to its $48 billion target—but weaker Western demand, volatile inputs and tougher sustainability requirements are changing how mills compete.
Vietnam’s textile and garment industry is entering the final quarter of 2026 focused increasingly on profitability rather than production volume, as weak demand, volatile cotton and fibre prices, logistics costs and exchange-rate movements squeeze margins.
Exports reached nearly $31.7 billion in January–August, up 2.9% year on year, according to the Vietnam Textile and Apparel Association (VITAS). Reaching the industry’s $48 billion full-year target would require another $16.3 billion—or roughly $4.1 billion per month—during September–December.
Garments remain the weak link
Growth has been uneven across the value chain. In the first half, exports of fibres, fabrics, accessories and nonwovens increased 5.6–10.6%, while garment exports slipped 0.4%, reflecting subdued consumer demand and intense price competition.
Vietnamese producers also remain exposed to imported inputs and logistics disruption. Earlier this year, industry reporting estimated that around 70% of production materials are imported, while Red Sea disruption extended some shipping routes by 14–20 days.
Buyers raise the threshold
Supplier selection is simultaneously changing. H&M, which works with more than 40 suppliers and 70 factories in Vietnam employing over 60,000 workers, is emphasising sustainability, renewable energy and industrial upgrading alongside traditional measures of cost and manufacturing capability.
Vinatex is responding with tighter inventory and cash-flow management, more cautious cotton purchasing, customer profitability reviews and expanded digital management systems.
Pakistan competitiveness takeaway
Vietnam’s trajectory is particularly relevant for Pakistan. Both countries face price competition and increasingly demanding buyers, but Vietnam is responding by combining supply-chain localisation, automation, digital traceability, renewable energy and higher-value product development.
Pakistan’s opportunity is to exploit its integrated cotton-to-garment base while closing gaps in MMF products, productivity, energy competitiveness, rapid product development and environmental data. The competitive benchmark is moving beyond producing garments cheaply: exporters increasingly need to demonstrate speed, resilience, traceability and measurable sustainability performance while protecting margins.
