II. Major risks for textile and garment enterprises in Vietnam
1. Competitor risks
In Vietnam, the employees are hardworking and labor costs are nottoo high, but the infrastructure and equipment of the textile industry are backward, cannot meettimely development requirements of the garment industry, production of raw materials in Vietnam isstill weak, textile industry still dependson imports (imports of cotton90%, fabric imports about 70%). These factors make the pricetextile products of Vietnamhigher than that some competitors.
Table 5. Average export prices of textile and garment products into US market (USD)
Cat. Unit China India Pakistan Bangladesh Sri Lanka Vietnam Indonesia
1 M2 2,67 3,72 2,08 2,06 3,53 3,33 3,35
31 M2 2,65 …show more content…
Delay in implementing regulations on the transfer of quotas as well as the process of putting it into execution often make factories that are missing quota fall into a difficult situation when foreign partners continue to contract and switch to another enterprise with quota or even withdraw from the Vietnam market to switch to other neighboring markets where they do not have to worry about the risks brought by the quota .Investing too much in the garment industry and unfocused …show more content…
Risk in negotiating and signing the contract
Vietnamese textile and garment enterprises often depend on the foreign partners’ ways to translate document or interpreting the meeting. This proves that enterprises do not pay much attention to having employee who are good at English. Those enterprises often hire interpreters to translate when foreign partners come to negotiate some businesses.
In addition to this risk, there are many risks if the negotiating staffs donot understand the information on the goods, and their partner. According to the actual survey of 50 textile enterprises, most do not use of technical personnel in the negotiations to adviseand the decisions are made by Director (or officials negotiating decisions). Just a few enterprises have the participation of technical staff in the negotiations.
Besides, if negotiating staff do not know the entire situation, they can make enterprise meet some following
1. Competitor risks
In Vietnam, the employees are hardworking and labor costs are nottoo high, but the infrastructure and equipment of the textile industry are backward, cannot meettimely development requirements of the garment industry, production of raw materials in Vietnam isstill weak, textile industry still dependson imports (imports of cotton90%, fabric imports about 70%). These factors make the pricetextile products of Vietnamhigher than that some competitors.
Table 5. Average export prices of textile and garment products into US market (USD)
Cat. Unit China India Pakistan Bangladesh Sri Lanka Vietnam Indonesia
1 M2 2,67 3,72 2,08 2,06 3,53 3,33 3,35
31 M2 2,65 …show more content…
Delay in implementing regulations on the transfer of quotas as well as the process of putting it into execution often make factories that are missing quota fall into a difficult situation when foreign partners continue to contract and switch to another enterprise with quota or even withdraw from the Vietnam market to switch to other neighboring markets where they do not have to worry about the risks brought by the quota .Investing too much in the garment industry and unfocused …show more content…
Risk in negotiating and signing the contract
Vietnamese textile and garment enterprises often depend on the foreign partners’ ways to translate document or interpreting the meeting. This proves that enterprises do not pay much attention to having employee who are good at English. Those enterprises often hire interpreters to translate when foreign partners come to negotiate some businesses.
In addition to this risk, there are many risks if the negotiating staffs donot understand the information on the goods, and their partner. According to the actual survey of 50 textile enterprises, most do not use of technical personnel in the negotiations to adviseand the decisions are made by Director (or officials negotiating decisions). Just a few enterprises have the participation of technical staff in the negotiations.
Besides, if negotiating staff do not know the entire situation, they can make enterprise meet some following