According to data from S&P Global Market Intelligence, Vietnam has surpassed Mexico to become the leading country in the “nearshoring” trend (companies move production, services and logistics activities from a distant country to neighboring countries).
Evidence is that Samsung Group has invested heavily in electronics factories in Vietnam. Nike and Adidas Group have also shifted production activities to Vietnam. Intel has also established a large-scale presence with a chip factory in Ho Chi Minh City.
More than 35% of Vietnamese companies noted increased demand from multinational manufacturers over the past year. This is in contrast to Mexico, where only 15% of firms reported a similar increase. The survey, conducted in May 2024, shows that Vietnam is increasingly attractive to international businesses.
The article also points out that Vietnam has some advantages such as geographical location, easy access to large markets in Asia and highly competitive labor costs attract companies that want to optimize costs. In addition, the Vietnamese Government also implements many policies aimed at supporting foreign investment.
According to the article, Vietnam's workforce plays a key role in this success story, and is an important factor for companies to consider relocating their production sites. Vietnam ranks 9th out of 60 countries in the US’ ManpowerGroup's Total Workforce Index, showing that Vietnam possesses a reliable and highly skilled workforce.
Mexico has also benefited from the “nearshoring” trend, but has seen slower growth. Some companies have seen sales increase due to the “nearshoring” trend, but the overall impact has not been as pronounced as in Vietnam. Mexican manufacturers remain optimistic about future growth opportunities.
The window of opportunity for countries to capitalize on this trend is limited. Experts estimate the investment transition period to be 10-12 years. This time frame increases competition among emerging manufacturing hubs. Countries must act quickly to attract and retain this investment, the article added.
