www.ChinaSourcingReports.com

HANOI

Ha NamLaos

Thailand

Cambodia

Ho Chi Minh City

China

VIETNAM

Vietnam supplier profi lesDetailed profi les of 38 suppliers with verifi ed manufacturing and export credentials

Product gallerySpecifi cations and full-color images of 213 top-selling export products ranging from backpacks to shopping bags

Industry trendsCoverage of current issues, plus insights into supply centers, products and pricing

January 2013US$150

Essential sourcing intelligence

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Global Sources is off ering this series of Developing Country Sourcing Reports as part of its corporate social responsibility undertakings in partnership with the Hinrich Foundation, a philanthropic development organization whose mission is promoting sustainable global trade.

The aim is to give international buyers new sourcing opportunities from experienced exporters, generating orders and creating lasting jobs in developing economies.

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BAGSSupplier capability in Vietnam

Low labor cost is pushing the development of Vietnam’s bags industry as an increasing number of suppliers with manufacturing facilities in China transfer production to more economical locations in Asia.

Manpower expenditure in Vietnam is more cost-effective compared with China, which has effected several minimum wage raises in recent years. As a result, several prominent brands have entirely or partially moved their lines to the former.

Besides this competitive advantage, Vietnam enterprises are easily able to produce items in different natural materials not readily available elsewhere. These mostly include plant-based inputs indigenous to the country. In addition, designers incorporate traditional motifs with modern styles, further enhancing the diversity of models.

Objective, methodology & scope

1. The majority of manufacturers profiled in this report expect to keep prices unchanged over the next six months to maintain interest among repeat customers and to attract new buyers. A considerable number of companies will raise quotes in response to higher expenditure on raw materials.

2. Exports over the coming 12 months are widely forecast to increase as more makers are seen to transfer their production lines from China to Vietnam. Furthermore, strong demand from new markets such as Russia and Brazil is spurring growth, complementing revenue from traditional destinations.

3. Finding new clients in conventional markets is the most critical challenge facing manufacturers. Most suppliers

Key findings

Executive Summary

In this report

• 18 in-depth company profi les• 20 short company profi les• 213 top-selling export products• Supplier demographics• Supplier survey• Industry statistics and charts

This Vietnam Sourcing Report is part of a series designed to provide buyers with information on new products from export manufacturers in supply markets that specialize in handmade merchandise.

The Developing Country Sourcing Report series is part of Global Sources’ corporate social responsibility initiatives. It is offered in conjunction with the Hinrich Foundation, whose mission is promoting sustainable global trade. One of its objectives is to help create jobs in developing Asia through export promotion.

To produce this report, large, midsize and emerging manufacturers, all with substantial export experience, were surveyed. The selection of suppliers is designed to reflect the composition of the industry in Vietnam in terms of geographic location, materials used and range of products offered.

For in-depth profiles, our researchers visited the facilities of each company and interviewed senior executives who discussed their recent performance and provided forecasts for the next 12 months. All other makers in this report were either visited or contacted by phone.

In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including a breakdown of exports by product type and market. Suppliers also participated in a survey designed to provide insight into the industry.

This report covers different classifications of bags available in Vietnam, including fashion, business, travel and special-purpose types. Each product category has its own price guide that describes features of low-end, midrange and high-end models.

The Industry Overview section discusses key issues affecting export manufacturers. It provides insight on the composition of the industry and elaborates on the important supply centers within Vietnam.

The Products & Prices section details the features and price ranges of bags. It also examines the design and manufacturing processes, main materials used, and sourcing centers where components are procured.

have established customers in the EU, several members of which are affected by the sovereign debt crisis. Because of this, buyers from those countries are purchasing less in terms of volume and frequency.

4. Design trends focus on improving the visual appeal and functionality of models. Releases feature various decorative elements that range from rhinestones to animal bone. In addition, usability is being improved by increasing storage capacity.

5. Production zones in Vietnam are generally concentrated in two areas. Hanoi and its neighboring provinces in the north are the key hubs for bags made of fabric and animal-derived components. In the south, Ho Chi Minh City and its environs are popular for plant-based items.

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4 Vietnam Sourcing Reports

CONTENTS

Contents

Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses. Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed. The author and the publisher of this report (and the publisher’s affi liates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, “Contents”), whether as to the accuracy, completeness, quality, fi tness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or defi ciency in, or for any use of or reliance on, such Contents (or any portion thereof ).

All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. Products that are not the specifi c topics of editorial articles are shown for illustrative and/or demonstrative purposes only. We, our affi liates, and our affi liates’ respective directors, offi cers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof ) which infringe on any intellectual property or other rights of a third party.

Copyright 2013 Trade Media Limited. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Trade Media Holdings Limited and Trade Media Limited is prohibited.

Published by Publishers Representatives Limited (on behalf of Trade Media Limited)4th Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322 SMB, George Town, Grand Cayman, Cayman Islandsc/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong

ISBN 978-988-15980-8-0

EXECUTIVE SUMMARY .............................................................................................................................................................................................. 3Key fi ndingsObjective, methodology & scope

INDUSTRY OVERVIEW ............................................................................................................................................................................................. 11 Supplier summary Exports

Products & prices ...................................................................................................................................................................................................... 13Production & export statisticsPrice guides

Supplier survey ......................................................................................................................................................................................................... 15Export pricesExport salesExport marketsMajor challengesR&D focus

SUPPLIER PROFILES .................................................................................................................................................................................................. 19Supplier matrix: Comparison of supplier location, sales revenue & export capability Profi les of 38 verifi ed suppliers

PRODUCT GALLERY .................................................................................................................................................................................................. 77Fashion bagsBusiness bagsTravel bagsSpecial-purpose bags

CONTACT DETAILS .................................................................................................................................................................................................. 113

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..................................................................................revenue & export capability & export capability

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Industry Overview

Industry Overview

The bags industry in Vietnam continues to perform strongly as the country emerges to be a preferred alternative production zone among investors operating manufacturing facilities in mainland China.

Because of the soaring labor cost in the mainland, a growing number of foreign businesses are moving their factories to more economical hubs such as Vietnam. Several brands have already established workshops in the country. These include adidas, Nike, Prada and Simone. Popular fashion labels such as DKNY, Michael Kors, Kate Spade and Burberry, on the other hand, have revealed plans of relocating some of their production lines to Vietnam as part of their “China plus-one approach.”

This development comes as rising manpower expenses continue to beset the mainland. Data from the Ministry of Human Resources show that 18 out of the country’s 31 provincial-level regions raised the minimum monthly wage by about 20 percent as of September last year. The adjustments have resulted in increases of at least 5 percent in export prices.

The southern sourcing hub of Shenzhen has the highest minimum salary, which is pegged at $240. In contrast, the monthly pay of workers in Vietnam is only between $67 and $96, making the country an attractive destination for foreign investors. The government, however, plans to push up the minimum wage in mid-2013 by as much as 35 percent due to soaring living costs. Nonetheless, even if the new rates come into place, domestic labor rates will still be lower compared with that of the mainland.

ExportsShipments of domestically produced bags have been rising dramatically over the past three years amid robust

overseas demand.According to the General Statistics

Office of Vietnam, total revenue in 2010 surged 31 percent to $959 million although key markets were still reeling from the global financial crisis. Earnings were predicted to be even higher but the credit crunch caused sales of nonessential items such as bags to decline.

Foreign sales in 2011 reached $1.3 billion, up 36 percent from a year earlier. In 2012, exports totaled $1.5 billion, marking a 16 percent jump from the previous year.

The positive figures are credited to strong sales in the US, the EU and Japan, which combined to take up 80 percent of turnout. Vietnam-made bags are also receiving strong interest from clients in the Asia-Pacific regions. Deliveries to mainland China, Taiwan and South Korea have accelerated between 11 and 48 percent in the first half of 2012.

Shipments to the EU dipped 2 percent in the January-July period last year amid the sovereign debt crisis affecting several members of the association. Despite the drop, demand remains high in more stable countries in the association such as France, Germany, Italy and Sweden. Strong sales were also posted in the UK and Spain.

Competitive advantagesThe bags industry possesses a number of strengths that help propel the sector.

Robust design capability is the line’s strongest suit. Suppliers meet the requirements of both ODM and OEM clients. The majority of enterprises employ in-house stylists who can launch a collection of unique models.

Craftsmanship is complemented by the country’s dense pool of artisans who are proficient in various manufacturing processes such as embroidery, weaving and sewing. Government data reveal that there are more than 3,000 craft villages across Vietnam.

Another advantage enjoyed by bag suppliers is the ready availability of plant-based materials. Companies can easily obtain bamboo, rattan, water hyacinth and seagrass from domestic vendors, allowing them to offer competitive prices for items made of natural components. Some enterprises have

Supplier summary

Data: All surveyed suppliers

Suppliers surveyed 38Export sales $27.9mnExport ratio 77%Capacity utilized 82%Full-time employees 4,927

Exports

Value $ billion

2010 2011 2012

1.0

1.3

1.5

Source: General Statistics Office of Vietnam

Markets2011

North America33%

EU 37%

Non-EU 3%

Middle East 1%

Asia- Pacific 24%

Other 2%

Includes HS codes 61 and 62

Source: International Trade Centre

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20 Vietnam Sourcing Reports

Supplier Profiles

*CompanyIn-depth profile

Year established

Head office location

Ownership Factory location(s) Full-time employees

Part-time employees

ISOcertified

An Thinh 2007 Tu Liem (Hanoi)

Locally owned

Tu Liem (Hanoi)

100 No

Anh Phuong 1995 District 2 (Ho Chi Minh City)

Locally owned

District 2 (Ho Chi Minh City)

10 20 No

APS 2002 Hoan Kiem (Hanoi)

Locally owned

Hung Yen (Hung Yen)

100 Yes

Bach Thanh Vinh 2010 District 12 (Ho Chi Minh City)

Locally owned

District 12 (Ho Chi Minh City)

15 No

* C2I 2011 Cau Giay (Hanoi)

Locally owned

Mai Chau (Hoa Binh)

52 20 No

* Craft Beauty 2003 Long Bien (Hanoi)

Locally owned

Long Bien (Hanoi);

Bac Ninh, Kim Dong (Hung Yen); Nha Xa (Ha Nam)

80 200 No

Craft Window 2003 Ba Dinh (Hanoi)

Locally owned

Xuan Truong (Nam Dinh), Thuong Tin

(Hanoi)

90 No

Cuong Trieu 2009 Tan Binh (Ho Chi Minh City)

Locally owned

Tan Binh (Ho Chi Minh City)

30 10 No

Cuu Viet 1993 Binh Thanh (Ho Chi Minh City)

Locally owned

Binh Thanh (Ho Chi Minh City),

Bien Hoa (Dong Nai)

50 30 No

* Da Ly Huong 1999 District 2 (Ho Chi Minh City)

Locally owned

District 2 (Ho Chi Minh City)

10 40 No

Duc Kien 2009 Thanh Liem (Ha Nam)

Locally owned

Thanh Liem (Ha Nam)

100 Yes

* Gia Phat 2008 District 7 (Ho Chi Minh City)

Locally owned

Binh Chanh (Ho Chi Minh City)

50 150 No

Hahanco 2004 Thuong Tin (Hanoi)

Locally owned

Thuong Tin (Hanoi)

500 No

* Hasun 1995 Binh Tan (Ho Chi Minh City)

Locally owned

Binh Tan (Ho Chi Minh City)

50 10 No

Hoang Kim 1990 Binh Tan (Ho Chi Minh City)

Locally owned

Binh Tan (Ho Chi Minh City)

200 20 No

Hoang Long 2008 Tan Phu (Ho Chi Minh City)

Locally owned

My Tho (Tien Giang), Vung Liem (Vinh Long)

600 No

SUPPLIER MATRIX

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28 Vietnam Sourcing Reports

Supplier ProfileSupplier Profiles

Capability

Contact details

C2I Development & Trade Promotion Joint Stock Co.

Annual sales $26,871 Share of total sales 36% Annual export sales $19,742 Total monthly capacity 20,000 pieces Average monthly output 11,500 pieces Capacity utilized 58% Average monthly exports 7,600 pieces Export ratio 66% Major export customers Unique-Exports (India), Arihant Agencies Ghana Ltd (Ghana)

Company facts

C2I was established in 2011 and specializes in handembroidered fashion bags. Total revenue reaches $74,000 annually.

Two-thirds of output in the line is sent abroad. The US is the primary overseas destination, accounting for 76 percent of shipments. Greece and France take up one-tenth of exports. The rest is absorbed by India, Japan and Ghana.

All orders are under ODM basis.The supplier also manufactures

scarves, shawls, home textiles and toys. Quotes range from $2 to $12. Coin

purses are among the lowest-priced items. Tote bags are offered for $3. Cosmetic models start at $4.

Cotton, silk, hemp and jute are the fabrics used. Beeswax is utilized as dye. All materials are sourced from Hoa Binh province.

A designer creates up to four new models every month. Samples are usually sent within a day, relative to material availability.

C2I operates two factories with a total area of 300sqm. Located in the Mai Cau district of Hoa Binh, the workshops are equipped with domestically purchased sewing machines. Weaving and embroidery are farmed out to local home-based workers.

There are 52 permanent employees. Up to 20 additional personnel are hired when large orders are placed.

A staff member inspects all finished products before packing and shipping.

Cartons are normally used as packaging. The minimum order requirement is 500 pieces per model.

C2I collaborates with the Thuan Hoa Social Protection Center, an NGO that provides skills training and job placements to disabled and poor ethnic minority women.

The supplier has participated in the 2012 Hanoi Gift Show. The company plans to expand its market reach in the US over the next 12 months. Upcoming releases will mainly feature multiple functions.

Year established 2011 Head offi ce location Cau Giay (Hanoi) Ownership Locally owned Factory location(s) Mai Chau (Hoa Binh) Full-time employees 52 Part-time employees 20 Total annual sales (all products) $74,054

Sales & output: Bags

Materials used Silk YesLeather (genuine/synthetic) NoPolyester NoCotton YesCanvas YesNatural materials Yes

Exports by product Fashion bags 94%Business bags –Travel bags –Special-purpose bags 6%

Exports by market North America 76%EU 10%Europe (non-EU) –Asia-Pacific 12%Middle East –Other 2%

Business contactNGUYEN Thu ThuyPhone(84-4) 3748-0208Fax(84-4) 3792-1379E-mailthuy@craft2inspire.comhuong@craft2inspire.comURLwww.globalsources.com/c2i.cowww.craft2inspire.comAddressA2 Nguyen Kha Trac Street, Cau Giay, Hanoi, Vietnam

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www.ChinaSourcingReports.com 29

Supplier Profile Executive Sum-Supplier Profiles

Popular export models

Model: TUIDDQNMOQ: 550 piecesPackaging: CartonDelivery: 60 daysPrice: $9.10Description: Handbag; cotton; handembroidered; ethnic motif; black and white; 51x18x25cm

Model: TUIDDDCMOQ: 500 piecesPackaging: CartonDelivery: 60 daysPrice: $12 Description: Handbag; cotton; handembroidered; ethnic motif; black and white; 43x12x27cm

Model: TUIGHEP-1MOQ: 500 piecesPackaging: CartonDelivery: 60 daysPrice: $5.30Description: Handbag; cotton; handembroidered; ethnic motif; violet and lemon; 35x12x17cm

Model: TUITDHOPMOQ: 700 piecesPackaging: CartonDelivery: 60 daysPrice: $4Description: Cosmetic bag; cotton; handembroidered; ethnic motif; yellow; 17x10x9cm

Model: TUIDCMONGMOQ: 700 piecesPackaging: CartonDelivery: 60 daysPrice: $4.30Description: Shoulder bag; cotton; handembroidered; ethnic motif; blue, yellow, and red; 20x3.5x16cm

Model: TUIKDG40MOQ: 550 piecesPackaging: CartonDelivery: 60 daysPrice: $3.20 Description: Tote bag; cotton; handembroidered; ethnic motif; 40x10x40cm; in various colors

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