Vietnam is rapidly emerging as a pivotal player in the global supply chain, driven by strategic economic policies, technological advancements, and a commitment to sustainability. As current global businesses seek resilient and efficient supply chain solutions, Vietnam offers unparalleled strategic advantages for long-term success.
The Evolving Global Supply Chain Landscape
The global supply chain has undergone significant shifts in recent years due to geopolitical tensions, technological disruptions, and sustainability concerns. Trade conflicts, such as the ongoing U.S.-China trade tensions, have accelerated the need for diversification, leading businesses to adopt the “China Plus One” strategy. Additionally, supply chain disruptions caused by the COVID-19 pandemic and conflicts in key trading regions have heightened the urgency for resilience and risk mitigation.
Technological advancements, including AI-driven logistics, blockchain-enabled transparency, and automation in manufacturing, are reshaping supply chain efficiency. At the same time, sustainability imperatives are pushing companies to adopt greener supply chain practices, focusing on renewable energy, circular economy models, and emissions reduction.
As companies re-evaluate their sourcing and production strategies, Vietnam is emerging as a top destination, offering cost competitiveness, a skilled workforce, and strong trade connectivity.
Vietnam’s Strategic Role in Global Trade
Situated in Southeast Asia, Vietnam serves as a crucial gateway for trade between Asia and the rest of the world. The country’s active participation in major trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), has opened access to markets representing over 30% of global GDP. These agreements have significantly reduced trade barriers, facilitating the seamless flow of Vietnamese goods into international markets.
In 2024, Vietnam’s export landscape showcased remarkable growth, with total exports reaching approximately $405.53 billion, a 14.3% increase from the previous year. This surge underscores Vietnam’s deepening integration into global supply chains and its capacity to meet the rising demand for goods in the Asia-Pacific region.
Notably, the country has become an attractive destination for companies implementing the “China Plus One” strategy, aiming to diversify their manufacturing bases beyond China. This trend has been accelerated by geopolitical factors and the need for supply chain resilience.
Chart 1. Largest Trading Partners of Vietnam in 2024. Source: Bao Chinh Phu
Note for chart 1: The U.S. remained Viet Nam’s largest export market with US$119.6 billion, while China was the largest supplier of goods to Viet Nam with US$144.3 billion.
Driving Economic Growth Through Technology
Vietnam’s economic expansion is significantly bolstered by a strong focus on digital transformation and technological innovation. Central to this effort is the National Digital Transformation Program, which aims to develop digital government, economy, and society by 2025, with a vision toward 2030.
The program has set ambitious targets, including providing 80% of online public services at level 4 accessible via multiple platforms, processing 90% of ministerial and provincial work records in a network environment, and ensuring 100% connectivity and data sharing for government reporting systems.
A key component of this transformation is the integration of blockchain technology into customs processes, which has streamlined procedures, reduced clearance times, and enhanced transparency. Additionally, the program emphasizes the expansion of broadband coverage and the promotion of digital platforms for businesses in industrial parks and export zones, thereby enhancing supply chain operations.
Vietnam’s commitment to technological advancement is further evident in its burgeoning semiconductor industry. The government has outlined a strategic vision to establish over 20 semiconductor plants by 2030, aiming to elevate the country’s position in the global semiconductor supply chain.
Picture: Vietnam’s largest FDI provider Samsung committed more than $2.6 billion in the semiconductor industry at Samsung Electro-Mechanics in Thai Nguyen province. (Photo: baodautu.vn)
This initiative is supported by significant foreign investments, such as Hana Micron’s planned investment of approximately $930.49 million by 2026 for packaging operations, and Amkor Technology’s $1.6 billion initiative to establish a state-of-the-art facility in Vietnam.
- Read our sectorial note about Vietnam’s Semiconductor here
These concerted efforts in digital transformation and technological innovation not only enhance Vietnam’s supply chain capabilities but also position the country as a critical hub for electronics manufacturing in the region.
Sustainability as a Cornerstone of Vietnam’s Supply Chain Growth
Vietnam is proactively aligning its supply chain strategies with global sustainability trends to meet the increasing demand for green and responsible business practices.
| National Green Growth Strategy | Vietnam’s National Green Growth Strategy, approved in October 2021, aims for sustainable practices across all sectors from 2021 to 2030, with a vision for 2050. It focuses on reducing greenhouse gas emissions, promoting efficient resource use, and restructuring industries for green production. |
| Commitment to Net-Zero Emissions | At COP26 in 2021, Vietnam committed to achieving net-zero carbon emissions by 2050, implementing policies to encourage environmentally friendly practices in businesses. |
| Direct Power Purchase Agreements (DPPA) | To support decarbonization, Vietnam introduced Direct Power Purchase Agreements, allowing companies to buy electricity directly from renewable producers. Major brands like Samsung and Nike are interested in this initiative to power their operations sustainably. |
Despite these initiatives, Vietnam faces challenges in fully implementing green supply chain practices. A study highlighted several obstacles, including limited technological capabilities, insufficient infrastructure, and the need for greater awareness among businesses regarding the benefits of sustainable practices. Addressing these challenges requires collaborative efforts between the government, private sector, and international partners to build capacity and promote the adoption of green technologies.
By proactively embracing sustainable supply chain practices and addressing existing challenges, Vietnam is positioning itself as a competitive and responsible player in the global market, aligning with international sustainability standards and meeting the evolving expectations of consumers and business partners worldwide.
Conclusion
To conclude, Vietnam’s strategic positioning, technological advancements, and commitment to sustainability make it an increasingly vital player in the global supply chain. As businesses continue to adapt to evolving geopolitical, economic, and environmental challenges, Vietnam offers a resilient and dynamic solution. With its robust trade agreements, strong digital transformation efforts, and a clear vision for green growth, the country is well on its way to becoming a central hub for global trade in the coming years. By embracing innovation and sustainability, Vietnam not only enhances its economic competitiveness but also aligns itself with the future of responsible, efficient supply chains worldwide.
