Entries tagged with “vietnam”

Articles

2 articles found for vietnam:

  • Friendshoring: Strategy to Reduce Supply Chain Dependency on China

    Supply chains globally have barely recovered from the unprecedented challenges posed by the pandemic. The Russia–Ukraine war has added to the woes of already fragile supply chains. The only silver lining is that companies realize the perils of relying on a select few countries for manufacturing, raw materials, and components. For decades, companies have followed strategies such as offshoring, nearshoring, and outsourcing business operations to low-cost countries. However, recent events accelerated the movement to safeguard supply chains and move away from depending entirely on countries like China. One such concept that could be a game-changer for global trade order is “Friendshoring.”

  • Navigating the Global Expansion Challenge: Insights for Startups

    Transitioning from a domestic company to a global business is a notable milestone for startups, unlocking new customer bases and expansive growth opportunities. However, venturing into international markets can be a complex and uncertain journey. As the investment landscape evolves and global competition intensifies, startups must exercise caution and undertake strategic planning in their pursuit of international expansion. They must be aware of market considerations, common pitfalls, and essential strategies for success.


Special Reports

2 special reports found for vietnam:

  • Manufacturing on the Move: Reshoring Trends in Mexico and Vietnam

    In a world shaped by the seismic shifts of the COVID-19 pandemic, the Ukraine-Russia conflict, and the Red Sea crisis, a new narrative of resilience and adaptation is unfolding. Major companies are navigating through turbulent waters as supply chain disruptions cast a spotlight on the imperative of diversification. The World Container Index echoes this tumultuous journey, soaring to US$3,659 amidst the Red Sea crisis, symbolizing the challenges and opportunities in global trade. In a surprising turn of events, Mexico has emerged as a formidable contender, outpacing China as the leading importer to the US in 2023. This shift reflects a paradigm where unfavorable sentiments towards Chinese trade practices have paved the way for Mexico's ascent. With significantly lower average wages and strategic advantages stemming from the USMCA trade agreement and proximity to the United States, Mexico stands tall as a beacon of opportunity in the trade landscape. Meanwhile, Vietnam's ascent in labor productivity adds a new dimension to the global manufacturing stage, drawing attention and admiration from investors worldwide. As the allure of countries like India, Indonesia, and Thailand grows stronger, fueled by their proximity to China, competitive labor costs, and demographic advantages, a new era of exploration and innovation beckons. These nations stand at the crossroads of possibility, offering a canvas for companies to paint their supply chain futures with hues of diversity and resilience.

  • India's EMS Sector in Full Momentum

    COVID-19 pandemic and higher China dependency led to supply chain disruptions in electronic components and finished goods. Consequently, the global electronic manufacturing giants reduced dependency on China by shifting their manufacturing bases to countries such as India, Vietnam, Indonesia, which have better unit economics. We believe India will benefit from this electronics manufacturing (EMS) wave, given its: i) digitized economy driving domestic demand; ii) 1.8–6x cost effective and skilled labor vs Vietnam and China; iii) high import bill (53% of total electronics market) leading to import substitution; iv) China+1 strategy; and v) robust government initiatives to push local manufacturing.  The EMS wave kick-started in India following government announcements to push local manufacturing in FY20. As a result, the electronics import/export ratio reduced sharply from 8.3x in FY18 to 3.2x in FY23. This has resulted in a 2–5x increase in book-to-bill ratio of major India-based EMS companies, along with a rise in the entry of global manufacturing giants; Foxconn and Pegatron have announced plans to double operations in India over the next couple of years. 

    We believe that India is ready to be the next EMS hub. India’s EMS market of $20bn (2.3% of global market) is poised to expand at 32% CAGR over CY21–26E and outpace global/USA/China/Europe markets. Kaynes, Syrma, Avalon and Dixon, which are some of the leading listed EMS players in India, are likely to benefit from this EMS wave.