China Plus One Strategy and an Open Door for Vietnam - A Case Study

Companies in China involved in low-value production and assembly are turning to Vietnam due to rising costs and an increase in regulations. This strategy called “China plus one” has been implemented by several companies in the last few years. However, with growing trade issues between China and the US, the trend of shifting low-cost manufacturing to Vietnam has recently picked up the pace.

Despite its advantages such as low manufacturing costs, overall proximity to China, and an excellent network of trade agreements, Vietnam is not without its share of challenges. Manufactures need to figure out how to realign their supply chains, which production elements to relocate, market entry strategies, and understand the rules and regulations that govern Vietnam’s several trade agreements.