In his opening remarks, Vinatex General Director Cao Huu Hieu said that the Group’s positive revenue and profit performance in the first half of 2026 was the result of the collective efforts of the entire Vinatex system, with human resource management making a meaningful contribution. He noted that the Group’s human resources function has continued to strengthen its role as a strategic advisor to the Board of Directors and the Executive Office in developing solutions to stabilize the workforce and meet production and business requirements. The Human Resources Division has worked closely with member enterprises, providing regular guidance, addressing operational challenges, and helping resolve bottlenecks encountered during implementation. In particular, a number of enterprises that had previously faced operational difficulties have gradually regained momentum. This serves as clear evidence of the effectiveness of integrating human resource management with production and business operations at the enterprise level.

During the second quarter, the implementation timeline for several Human Resources Division initiatives was adjusted as member enterprises prioritized stabilizing production, optimizing order fulfillment, and maintaining workforce stability amid market uncertainties. Nevertheless, the Group’s overall objectives remained on track.

Regarding key performance indicators, Vinatex has set a target of keeping the annual employee turnover rate below 15%. In the first six months of the year, the average turnover rate across the Group stood at 9.8%. However, workforce stability varied considerably among member enterprises. Average employee income increased by more than 10% during the period, although income levels remained uneven across the Group. Accordingly, further efforts are needed to develop solutions tailored to the specific conditions of each enterprise to improve employee income and strengthen workforce retention. In addition, greater attention should be given to developing a strong succession pipeline to ensure the long-term sustainability of Vinatex’s human resources.

Presenting the Human Resources Division’s six-month review of its 2026 action program, Ms. Tran Tuong Anh, Member of the Board of Directors of Hoa Tho Textile and Garment Corporation and Human Resources Division expert, reported that the Group’s employee turnover rate in the first half of 2026 declined by 0.4% compared with the same period in 2025. No labor shortages emerged across the system, contributing to stable production and the successful achievement of the Group’s first-half business objectives. The Human Resources Division continued to build a data-driven human resource management platform by developing a set of core HR metrics and standardized reporting templates for implementation across the Group. It also provided focused support to four key enterprises: Branch of Vinatex – Nam Dinh Spinning factory, Eight March Textile company Ltd. (EMTEXCO); Hanoi Textile and Garment Joint Stock Corporation (HANOSIMEX); and Nam Dinh Textile and Garment Joint Stock Corporation (NATEXCO) – in the areas of human resource management, digital transformation, training, and recruitment. The Division also organized training and experience-sharing programs for more than 200 middle managers, collaborated with Hanoi University of Industry and Trade to assess training needs and provide consulting on work-integrated degree programs in Garment Technology and Spinning Technology; strengthened professional knowledge sharing through its quarterly Human Resources Newsletter, which provides legal updates and shares HR management knowledge and best practices.

Despite the progress achieved, several challenges remained in implementing the Human Resources Division’s initiatives: the fragmented HR data resulting from the lack of standardized and integrated personnel records; limited dedicated HR resources, with many staff members undertaking multiple responsibilities and requiring further capacity building; uneven progress in digital transformation across member enterprises; an employee performance evaluation system based on KPIs that is still under development and in the pilot phase; delays and inconsistencies in the implementation of certain training programs; and varying levels of organizational maturity among member enterprises.

During the conference, participants also heard presentations from the   Human Resources Division’ Executive Committee on workforce trends, employee compensation, and the effectiveness of human resource management across member enterprises during the first half of the year; an outlook on the labor market and employment trends for the second half of 2026, as well as a thematic session entitled “Personal Data Protection in Human Resource Management: From Regulation to Action,” aimed at enhancing awareness and ensuring compliance with legal requirements in HR management.

Sharing practical experience in human resource management, two presentations delivered by Hue Textile and Garment Joint Stock Corporation and Hoa Tho Textile and Garment Corporation on “Applying KPI/OKR Performance Management Tools in Human Resource Management” and “Applying HR Metrics to Measure and Improve Human Resource Management Effectiveness” provided participants with valuable practical insights and actionable solutions. The presentations generated strong interest and lively discussions among members of the Human Resources Division throughout the conference.

In his closing remarks, Mr. Cao Huu Hieu, General Director of Vinatex and Director of the Human Resources Division, affirmed that human resource management has increasingly demonstrated its strategic value, making tangible contributions to the production and business performance of member enterprises. The Human Resources Division has also worked closely with the Group’s Yarn and Garment Production and Business Divisions to develop solutions that ensure an adequate workforce for operations, contributing to the positive growth achieved in the first half of the year. Coordination between the Group’s Human Resources Division and member enterprises has improved significantly, while initiatives such as on-site support, workplace-based training, and specialized consulting have begun to deliver positive results. The capabilities of HR professionals have received greater attention, with several member enterprises making systematic investments in their human resource management systems. These efforts have laid a solid foundation for the next phase of Vinatex’s management transformation.

Despite the progress achieved, several issues still require focused attention. These include inconsistencies in the quality of human resource management across member enterprises; the incomplete standardization and integration of HR data, which limits data analysis and decision-making; uneven implementation of certain training programs, with post-training effectiveness yet to be clearly measured; and the lack of in-depth root cause analysis and targeted solutions for persistent operational bottlenecks at some enterprises, resulting in limited improvement outcomes.

On this basis, the Group’s leadership called on the Human Resources Division to focus on the following key priorities during the third quarter and the second half of 2026:

(1) Expedite the completion of the Group’s HR data system and the Human Resource Management Maturity Assessment Toolkit, with both scheduled for issuance in July 2026.

(2) Fully implement the approved training plan, with particular emphasis on evaluating training effectiveness through measurable improvements in employees’ competencies and job performance.

(3) Continue implementing the support program for the four key enterprises facing operational challenges in a more proactive and results-oriented manner, ensuring that all initiatives are closely aligned with production and business performance.

(4) Further strengthen workforce stability by prioritizing employee retention and the effective utilization of the existing workforce. The Group aims to keep the employee turnover rate below 10%, continue improving employee income, particularly at enterprises where average income remains below the Group and local averages; recommend measures to enhance labor productivity, thereby creating sustainable opportunities for long-term income growth.

(5) Improve the quality of succession planning and leadership development by transforming from a procedural exercise into practical management; proactively preparing a strong pipeline of current and future managers to support the long-term development of member enterprises.

Against the backdrop of evolving U.S. trade policies and expectations of continued challenges in the second half of the year, the Human Resources Division should further reinforce its role in enhancing business performance by shifting toward a more proactive approach to workforce management, ensuring that the workforce are fully prepared to meet production and business requirements.

The Group’s leadership also called on the management of member enterprises to recognize human resource management as a core component of corporate governance. Enterprise leaders are expected to take direct responsibility for overseeing, monitoring, and delivering key performance targets related to workforce management, employee income, training, and talent development.

Reviewing the Group’s production and business performance in the first half of the year, General Director Cao Huu Hieu said that amid continued global economic uncertainties, weakening consumer demand in many key markets, and intensifying competitive pressures, Vinatex proactively adapted to the changing environment and maintained stable production across its operations. The Group’s consolidated revenue for the first six months of 2026 was estimated at VND 10,049 billion, equivalent to 46.9% of its full-year target and up 9.6% year-on-year. Consolidated pre-tax profit was estimated at VND 882.9 billion, reaching 64% of the full-year plan and increasing 32.4% compared with the same period in 2025. Across the Group, the workforce totaled 48,134 employees. Average monthly income reached VND 12.4 million per employee, up 8.9% year-on-year and approaching the full-year target of VND 12.6 million per employee per month.

According to General Director Cao Huu Hieu, the results achieved in the first half of the year reflected the collective efforts of the entire Vinatex system. In particular, the Yarn Production and Business Division and the Garment Production and Business Division continued to play a pivotal role in coordinating operations and supporting member companies in improving production and business efficiency.

For the second half of 2026, Vinatex aims to achieve its full-year revenue target. The Group targets consolidated pre-tax profit of approximately VND 1,400 billion, exceeding the annual plan by 2–3%, while the Parent Company is expected to outperform its profit target by 4%, reaching around VND 270 billion. Vinatex also targets a 10% increase in its annual import-export trade surplus, a 9–10% rise in average employee income, and the achievement of its annual targets for capital efficiency and total factor productivity (TFP).

To achieve these objectives, General Director Cao Huu Hieu called on the entire Vinatex system to implement four key strategic of priorities in a coordinated manner:

First, secure orders and strengthen customer relationships by reviewing and optimizing the customer portfolio, with priority given to retaining strategic customers. The Garment Production and Business Division will continue assessing the competitiveness of the garment sector and guide product portfolio adjustments in line with each member company’s capabilities. Meanwhile, the Yarn Production and Business Division will focus on developing a product mix that better meets the demands of the Chinese market, FDI enterprises and the domestic market.

Second, protect profit margins by tightly controlling production costs, improving raw material management, optimizing cotton procurement, and implementing productivity improvement initiatives to achieve the Group’s Total Factor Productivity (TFP) growth target.

Third, strengthen cash flow management by reducing inventories of raw materials and finished goods, accelerating receivables collection, maximizing the utilization of idle assets, and expediting value-added tax refunds to supplement working capital for production and business operations.

Fourth, maintain competitiveness by accelerating digital transformation, enhancing management platforms, strengthening quality management and social responsibility systems, and tightening controls over product traceability and rules-of-origin verification to meet the increasingly stringent requirements of export markets.

At the conference, representatives of Vinatex’s Yarn Production and Business Division and Garment Production and Business Division presented an overview of market developments in the first half of 2026, shared their outlook for the remainder of the year, and proposed solutions to achieve the Group’s 2026 business targets.

A key highlight of the conference was the evaluation of the performance of Vinatex’s capital representatives at its affiliated enterprises. This marked the 15th year that the Group has conducted evaluations under its revised assessment framework. Over the years, particularly during the 2020–2025 period, the evaluation system has been continuously refined in terms of assessment criteria, methodology, and implementation.

Vinatex currently has nearly 30 member enterprises that vary significantly in scale, level of development, production conditions, and market orientation. As a result, a one-size-fits-all formula or strategy is neither practical nor effective. Instead, the Group applies a common management approach that is both systematic and flexible, enabling each enterprise to capitalize on its unique strengths while leveraging the collective advantages of the entire Vinatex system. This approach aims to enhance overall competitiveness and build Vinatex into a large-scale, efficient textile and garment manufacturing group that is increasingly adaptable to evolving market demands and emerging industry trends.

Summarizing 15 years of evaluating the performance of Vinatex’s capital representatives at affiliated enterprises, Dr. Le Tien Truong, Chairman of Vinatex, affirmed that the evaluation framework has laid an important foundation for improving the Group’s capital efficiency, strengthening corporate governance, and building a sustainable ecosystem of member enterprises.

Over the past 15 years, the 2009–2014 period laid the foundation for Vinatex’s capital representative evaluation system. The 2015–2020 period marked its expansion from a primary focus on financial performance to a broader assessment of enterprise development capabilities through a comprehensive overhaul of the evaluation framework.

During the 2021–2025 period, the evaluation system took a further step forward by shifting from outcome-based assessment to data-driven management. The KPI system evolved from being merely an evaluation tool   into a management instrument for identifying issues, analyzing root causes, and recommending improvement measures tailored to each enterprise. In addition to traditional financial indicators, the framework incorporated a range of modern management metrics, including the Z-score to measure financial health, revenue and profit per employee, employee turnover rate, Total Factor Productivity (TFP), and the Cash Conversion Cycle (CCC). As a result, the evaluation system now provides a more comprehensive reflection of both the management performance of capital representatives and the competitiveness of member enterprises.

For the 2026–2030 period, Vinatex will continue to enhance the evaluation framework by introducing three additional indicators alongside the existing criteria: Return on Capital Employed (ROCE), the Quick Ratio, and the Deployment Rate of Tranined Successor Candidates.

The conference participants expressed strong support for and appreciation of the objectives and recent innovations in Vinatex’s evaluation framework for capital representatives at its affiliated enterprises.

In recognition of the outstanding achievements recorded in 2025, Vinatex decided to allocate nearly VND 7 billion from the Parent Company’s Reward Fund to reward capital representatives at member enterprises. The Group particularly commended the exceptional performance of eight enterprises: Phong Phu Corporation, Hoa Tho Textile and Garment Corporation, Viet Thang Corporation, Hue Textile and Garment Joint Stock Corporation, Viet Tien Garment Corporation, Garco 10 Corporation, Nha Be Garment Corporation, and Hung Yen Garment Corporation.

In his concluding remarks, Chairman Le Tien Truong emphasized that after July 24, 2026, the United States’ temporary additional tariff measures on Vietnam are likely to be replaced by new measures under Section 301. However, until now, there is still insufficient information regarding the extent of their impact on individual countries, as well as issues related to overcapacity, intellectual property, and labor standards. Vinatex and its member enterprises should therefore continue to closely monitor policy developments and take appropriate actions.

Regarding priorities for the second half of 2026, Vinatex should focus on three key areas:

First, the Group’s business results in the first half of 2026 reflected not merely growth in scale, but higher-quality growth. This was achieved through improved operational efficiency, higher productivity, and greater sustainability, while the Group’s asset base remained largely unchanged. These results demonstrate that the entire Vinatex system is progressing in line with the strategic direction set at the beginning of the year – driving growth through efficiency rather than expansion.

Second, member enterprises need to recognize that the second half of the year will present significant challenges, with uncertainty surrounding tariffs and international trade policies remaining the most critical. Profitability in the second half may not match the exceptionally strong performance recorded in the first six months. However, experience over the years has shown that periods of heightened market volatility and policy uncertainty often create the greatest opportunities for enterprises with strong adaptability. In 2021, amid the COVID-19 pandemic, in 2022 during geopolitical disruptions, and in 2025 amid major shifts in the global trade environment, Vinatex consistently delivered results that exceeded expectations. This demonstrates that periods of policy uncertainty provide opportunities for businesses that can identify challenges early, make timely decisions, and execute effectively. After years of continuous improvement, Vinatex has built strong adaptive capabilities, making agility an integral part of its management approach while maintaining discipline and unity across the Group. As a result, whenever the market becomes more volatile, Vinatex’s member enterprises should view such changes not as risks, but as opportunities to reinforce the competitive advantage.

Third, Vinatex expects second-half profit of 2026 to reach approximately 60–65% of the first-half result, enabling consolidated profit for the full year to exceed the level achieved in 2025. This target represents both the Group’s forecast and its confidence, while also serving as a shared objective for the entire Vinatex system. Alongside its profit target, Vinatex remains committed to increasing average employee income by more than 10% and further improving capital efficiency and cash flow management across all member enterprises.

This article analyzes the key shifts in the sourcing strategies of U.S. fashion brands, highlighting the profound and ongoing reconfiguration of global supply chains.

The U.S. Fashion Industry Continues to Face an Uncertain Business Environment

Entering 2026, the U.S. fashion industry is operating in an environment marked by inflation, high interest rates, trade disruptions, and weakening consumer confidence. An April 2026 report by Professor Sheng Lu from the University of Delaware (U.S.) indicates that consumption patterns are becoming increasingly segmented by income level, with middle- and lower-income consumers remaining under considerable financial strain due to the high cost of living and persistently elevated borrowing costs.

U.S. economic indicators suggest that inflationary pressures are regaining momentum. The CPI climbed to 3.8% in April 2026, marking its highest since May 2023 and an increase of 0.5 percentage points from the previous month. Meanwhile, the Federal Reserve maintained its policy rate at 3.5%–3.75% during its early-May 2026 meeting and has not indicated any intention to ease monetary policy in the near term. Despite a 4.9% year-on-year increase in retail sales in April, many fashion companies believe that consumers are becoming more price-conscious and increasingly selective in their purchases of non-essential goods.

Kohl’s reports that its core customers, lower- and middle-income households, are still facing financial pressure and are increasingly focused on value. Macy’s likewise sees rising uncertainty in consumer spending due to macroeconomic conditions, geopolitical tensions, and evolving trade policies. For Carter’s, tariffs continue to weigh heavily on market sentiment and have made the business outlook considerably harder to predict.

Beyond consumer trends, U.S. trade policy remains a major wildcard for the global fashion industry. Businesses anticipate that tariff and trade uncertainties will persist well into the second half of 2026, forcing fashion brands to keep their sourcing strategies flexible and their supply chains increasingly diversified.

Tariffs Continue to Squeeze Corporate Profit Margins

Sheng Lu’s analysis of the financial results of roughly 30 major U.S. fashion companies shows that tariffs remained among the industry’s biggest margin pressures in fiscal 2025. Many companies reported that import tariffs had shaved between 0.2-4.6% off their gross profit margins.

Macy’s estimates that tariff-related impacts will reduce its gross profit margin by approximately 0.2–0.3% in 2026. Meanwhile, GAP stated that changes in global tariff rates during 2025 had a significant adverse effect on profitability, reducing both its gross margin and operating margin by around 1.2% for the full year and by approximately 2% in the fourth quarter of 2025. At the same time, Abercrombie & Fitch reported approximately USD 90 million in tariff-related costs included in its cost of goods sold, resulting in an approximately 2.5% decline in operating margin compared with the previous year.

Some companies have faced significantly greater pressure due to their heavy reliance on sourcing from Asia. Columbia Sportswear reported that unmitigated tariff costs exceeded USD 30 million in 2025, equivalent to an impact of approximately 3–4% over a two-year period.

Meanwhile, PVH Corp. – the parent company of Calvin Klein and Tommy Hilfiger – estimated that its total tariff-related costs could reach approximately USD 195 million in 2026. However, the company stated that it is implementing a range of mitigation measures aimed at offsetting around 60% of the impact this year, with a target of reducing more than 75% of the tariff burden by the end of 2026.

In response to mounting cost pressures, many U.S. fashion companies are pursuing multiple strategies simultaneously, including adjusting prices, optimizing product portfolios, discontinuing underperforming product lines, renegotiating with suppliers, and shifting sourcing to countries with more competitive cost structures. Some companies are also accelerating their full-price selling strategies and limiting promotional activities in an effort to protect profit margins.

However, a key concern is that most companies believe the current trade environment remains highly unpredictable due to the continually evolving U.S. tariff policies. As a result, brands are required to maintain more conservative inventory levels while enhancing the flexibility of their supply chain management and global sourcing strategies.

U.S. Fashion Brands Implement Selective Price Increases

In addition to optimizing sourcing strategies and controlling costs, price increases have become one of the most widely used measures adopted by U.S. fashion brands to offset the impact of tariffs. However, rather than implementing across-the-board price hikes, most companies have opted for a selective pricing strategy, targeting fashion items, new product launches, or premium segments in order to minimize adverse effects on consumer demand.

Columbia Sportswear stated that it had implemented high-single-digit price increases in the U.S. market for its Spring and Fall 2026 collections to offset tariff-related costs. Meanwhile, Levi’s reported that tariffs had reduced its profit margin by approximately 1.5%. However, a significant portion of this impact has been mitigated through price increases, product cost optimization, and a stronger focus on full-price selling. According to the company, consumers have so far shown no significant negative reaction to these pricing adjustments.

The trend toward reducing promotional activities and increasing the share of full-price sales is also being widely adopted by many brands as a means of protecting profit margins. Victoria’s Secret noted that scaling back discount programs had significantly improved its average selling price per item, thereby supporting the profit margins of its PINK brand. Meanwhile, Oxford Industries stated that its 4–8% price increase was driven primarily by product mix enhancement and a higher proportion of newly introduced, higher-value products.

Nevertheless, companies remain cautious in their pricing strategies for basic product categories in order to protect price-sensitive consumers. Urban Outfitters, Inc. (URBN) stated that it continues to prioritize maintaining entry-level prices for its core products and only raises prices for categories where “the product value proposition is strong enough for consumers to accept.”

This trend suggests that the U.S. fashion industry is entering a new phase of competition, in which brand building, product development, and pricing management capabilities are becoming increasingly critical to offset cost pressures and sustain profitability.

The Shift in Global Sourcing Continues to Intensify

Under the combined influence of tariffs, geopolitical developments, and the need to diversify supply chains, U.S. fashion brands are accelerating the reconfiguration of their global sourcing networks in 2026. According to Sheng Lu, four major trends have emerged: a reduction in sourcing dependence on China; increased procurement from cost-competitive Asian markets, particularly Vietnam, Bangladesh, and India; a growing emphasis on nearshoring to Mexico and Central America; and closer attention to newly negotiated trade agreements affecting the textile and apparel sector.

China continues to lose ground in the U.S. apparel import market. According to import market share data, China’s share of U.S. apparel imports fell dramatically from about 22% at the beginning of 2025 to roughly 9% in March 2026. Meanwhile, Vietnam has consolidated its position as one of the leading sourcing destinations for U.S. apparel buyers, maintaining a market share of approximately 21–24% during 2025–2026.

Alongside Vietnam, Bangladesh and India are increasingly reinforcing their positions as low-cost sourcing hubs for the global fashion industry. Export data show that Vietnam’s apparel exports to the United States reached approximately USD 17.9 billion in 2025, up 10.7% from the previous year. Meanwhile, Bangladesh recorded around USD 7.5 billion in apparel exports to the U.S., an increase of 4.7% year-on-year. During the first four months of 2026, Vietnam’s apparel exports to the U.S. continued to grow by 3%, while Bangladesh posted a 2.7% increase over the same period.

Many companies believe that the shift in sourcing away from China has been underway for several years and is likely to continue in the foreseeable future. Oxford Industries reported that the share of sourcing from China had declined from around 40% to approximately 15% by the beginning of fiscal year 2026. Meanwhile, Abercrombie & Fitch currently sources from more than 16 countries worldwide in an effort to enhance supply chain flexibility and resilience.

Beyond Asia, many U.S. fashion brands continue to maintain and expand a portion of their sourcing activities in Mexico and Central America to shorten lead times, enhance market responsiveness, and reduce logistics risks. Although the apparel import shares from countries covered by the United States-Mexico-Canada Agreement (USMCA) and the Central America Free Trade Agreement (CAFTA) have remained relatively stable during 2025–2026, nearshoring continues to be viewed by companies as a strategic option for complementing their global sourcing networks amid rising trade and geopolitical uncertainties.

Geopolitics and Logistics Emerge as Strategic Priorities

In addition to tariffs, geopolitics is increasingly becoming a major factor influencing sourcing and logistics activities across the global fashion industry. Conflicts in the Middle East and disruptions along international shipping routes have prompted many companies to heighten their vigilance regarding supply chain risks in 2026.

Nike reported some transportation disruptions related to the situation in the Middle East during its most recent quarter. Meanwhile, Victoria’s Secret noted that certain shipments to North America had experienced delays due to logistics disruptions, although the impact has not yet been considered severe. At the same time, PVH Corp. believes that geopolitical conflicts and volatility in global trade will remain major sources of uncertainty for business operations in the period ahead.

According to data from the Drewry World Container Index (WCI), global container shipping costs have been trending upward again in recent months. As of May 28, 2026, the WCI Composite Index had risen to approximately USD 2,800 per 40-foot container. Freight rates on shipping routes from Shanghai to Los Angeles and New York City have also increased significantly compared with the beginning of the year, underscoring the persistent logistics pressures facing global supply chains.

Against this backdrop, adaptability is emerging as a top priority for many U.S. fashion companies. Rather than focusing solely on cost optimization, brands are increasingly prioritizing the development of more agile and resilient supply chains through sourcing diversification, expanded nearshoring initiatives, inventory optimization, and enhanced responsiveness to geopolitical and global trade disruptions.

Overall, these trends indicate that the global fashion supply chain is entering a period of profound restructuring, driven by tariffs, geopolitical developments, and increasingly stringent risk management requirements. For Vietnam, this presents a significant opportunity to strengthen its attractiveness as a sourcing destination and expand its market share amid the ongoing supply diversification strategies of international brands. However, to capitalize on the shifting order landscape, Vietnamese textile and apparel companies must become more proactive in managing their supply chains, while enhancing their ability to deliver orders more quickly, reliably, and flexibly in response to the evolving dynamics of the global market.

From Market volatility to Workforce pressures

Recent market developments have demonstrated that the global textile and garment supply chain no longer operates under its traditional model. Orders are shifting more rapidly, lead times are becoming shrinking, and requirements relating to quality, social responsibility, traceability, and data transparency are growing increasingly stringent. In this environment, buyers are no longer seeking only low-cost suppliers; they increasingly prioritize companies that can respond quickly, maintain stable production, and adapt effectively to market fluctuations.

As a result, workforce quality has become a core element of competitive advantage. If the industry’s priority in the past was simply to secure enough workers to keep production lines running, the challenge today is to build and retain a skilled, adaptable, and future-ready workforce. Internal capabilities, the ability to maintain flexible production rhythms, and the quality of human capital are increasingly becoming the key determinants of resilience and competitive advantage for textile and garment enterprises in this new environment.

Retaining Core employees means Preserving production capacity

Amid ongoing market volatility, workforce stability has become a critical factor in the production efficiency of textile and garment enterprises. Employee turnover not only disrupts production lines but also increases recruitment and training costs, while raising quality-related risks.

Following the Lunar New Year holiday 2026, the return-to-work rate at Vinatex’s member companies reached 98–100%, reflecting the effectiveness of the Group’s employee welfare, engagement, and job security policies. By maintaining a stable workforce, many enterprises were able to quickly resume production and sustain operational momentum from the very beginning of the year.

In practice, companies that invest in employee well-being and build trust within the organization tend to be better positioned to maintain stable operations, enhance resilience, and strengthen their competitive capabilities in an increasingly uncertain market environment.

From Filling positions to Building the right skills

As global supply chains continue to change, new demands are being placed on the textile and garment workforce. Workers can no longer rely solely on proficiency in a single, fixed role; they must be capable of quickly adapting to new products, processes, machinery, and quality requirements. The industry’s workforce challenge has therefore shifted from securing sufficient manpower to building a workforce equipped with the right skills.

To respond to these new demands, frontline employees must receive practical, production-oriented training, while technical and management staff need to improve their coordination, problem-solving, and interdepartmental collaboration skills. For 2026, Vinatex has outlined several key initiatives, including completing its organizational model, standardizing competency frameworks, preparing workforce plans based on production needs, strengthening training in productivity, quality, foreign languages, and customer skills, and building a KPI system tied to productivity and income.

The issue is not training more but training smarter – developing the exact skills that enterprises need to remain competitive in the new era of the textile and garment industry.

Middle Management as the Foundation of Performance

Middle-management personnel – including team leaders, line supervisors, workshop managers, and shift supervisors – have become a critical link in the textile and garment industry’s workforce equation, as they are directly responsible for managing production and maintaining the closest day-to-day engagement with employees. In an environment where orders change rapidly, product designs are becoming increasingly complex, and profit margins are narrowing, companies will struggle to convert resources and orders into actual productivity if this group lacks the necessary capabilities.

For this reason, Vinatex believes that improving performance must begin with people, organizational structures, and execution discipline. In this process, strengthening the capabilities of middle managers is a key priority for sustaining operational efficiency and meeting the market’s increasingly demanding requirements.

As global supply chains continue to be reconfigured, the workforce challenge must be viewed through the lens of competitiveness. Retaining core workers is about safeguarding production continuity. Building new skills is about staying agile in the face of changing products and market expectations. Developing capable middle managers is about maintaining operational discipline and efficiency. These priorities have moved far beyond the responsibility of the HR department; they have become decisive factors in a company’s ability to win orders, keep customers, and sustain its position in an ever-changing global supply chain.

By 2026, the “local brand” advantage is no longer sufficient to sustain the competitiveness of Vietnamese fashion labels. Consumers no longer make purchasing decisions simply because a brand is domestic; instead, they place greater emphasis on product quality, design, shopping experience, delivery speed, and customer service. As a result, brand identity must be accompanied by strong operational capabilities, agile supply chains, and effective customer data management.

The traditional store expansion model has also revealed significant limitations, including rising rental, labor, and inventory costs continue to rise while consumers increasingly shift toward online shopping. Consequently, fashion brands need to restructure toward a leaner, omnichannel retail model that places customer data at the center of decision-making.

In addition, intensifying competition from international brands is forcing Vietnamese fashion companies to seek differentiated advantages rather than competing head-on in terms of scale and price. Competitive strengths such as a deep understanding of Vietnamese culture, climate, fit preferences, and consumer preferences need to be leveraged more effectively and strategically.

More importantly, today’s challenge extends beyond weakening consumer demand; it lies in management capability. The brands that succeed are those that can effectively manage customer data, operate lean business models, and invest in communities and digital content. The withdrawal of several brands in early 2026 is widely viewed as a natural market correction, highlighting the need for businesses to shift from a product-selling mindset to one focused on building long-term customer relationships, optimizing supply chains, investing in brand value, and professionalizing management practices through long-term strategic thinking.

Interviewer: In the context of the textile and garment industry facing increasingly pressing demands for digital transformation and green transition, how do you assess the role of the media in supporting enterprises as they adapt to these trends?

Mr. Le Trong Minh: I believe that the media is not merely a communication channel for promoting products; it also serves as a catalyst that amplifies the values enterprises strive to create. Through media coverage, efforts related to digital transformation, green transition, corporate social responsibility, and corporate culture can gain broader recognition and stronger public trust than through self-promotional communications.

More importantly, the media also plays the role of a constructive watchdog. Objective perspectives from the press help businesses identify shortcomings, improve governance practices, and strengthen operational performance. At the same time, timely reporting on non-transparent business practices contributes to fostering a healthier business environment.

In the context of the global shift toward green growth and sustainable development, I believe the relationship between the media and businesses should be regarded as a strategic partnership rather than merely a channel for publicity. The media helps enterprises communicate meaningful stories and long-term values to society, while businesses contribute practical experiences, emerging trends, and industry expertise that enhance the quality and relevance of media coverage.

In today’s environment, where information spreads rapidly, businesses must also take a more proactive approach to communications. Whenever issues arise or explanations are needed, timely, accurate, and transparent disclosure is critical. Silence or delayed responses can create an information vacuum, allowing unverified narratives to influence public perception and potentially damage trust in the business.

To maximize the effectiveness of green transformation and sustainable development initiatives, businesses need to partner with reputable media organizations that possess a strong understanding of their industries and can effectively reach the intended audience. When communication is delivered through trusted channels and reaches the right audience, the influence and resonance of new strategies, commitments, and development goals are greatly amplified.

In my view, the partnership between the media and businesses delivers its greatest value when it is grounded in transparency, responsibility, and a shared vision for sustainable growth. Under these conditions, the media not only reports on corporate activities but also helps communicate the broader economic and social value that businesses generate through their development efforts.

In your view, how should the media adapt its approach and communication methods so that it not only reports on sustainability initiatives but also encourages textile and garment enterprises to pursue sustainable development in a more substantive manner? How can green transformation be presented as a compelling and engaging topic that resonates with the public while helping audiences gain a comprehensive and accurate understanding of this trend?

Green transformation is no longer optional, it has become a prerequisite for textile and garment enterprises that wish to remain competitive and continue accessing global export markets. However, one of the greatest challenges is that concepts related to sustainable development are often highly technical and difficult for the public to fully understand.

I believe the media should act as a “bridge” between technical expertise and public understanding. Complex concepts related to sustainability need to be translated into practical, relatable stories that resonate with people’s daily lives. Instead of focusing exclusively on emissions targets or circular economy indicators, the conversation should highlight how green transformation influences jobs, incomes, business resilience, and long-term economic development. To achieve this, communication efforts should place greater emphasis on storytelling and adopt a people-centered approach. Through relatable examples, visual illustrations, and real-world experiences, the media can help audiences connect with the purpose and value of the green transition. When the public understands and supports these initiatives, sustainable development goals can be implemented far more effectively.

Instead of focusing solely on a new production line or a major capital investment, we should tell the stories of workers who benefit from safer and better working conditions, and businesses that are able to conserve resources, reduce costs, and secure orders through their green transition efforts. When audiences can see the tangible benefits and practical value of these initiatives, they are far more likely to relate to them and embrace the message.

The media should also take a comprehensive view of the global sustainability standards, which is undoubtedly becoming an essential part of international trade and development, there are instances where environmental requirements may function as technical trade barriers or protection tools. This issue should be reported objective to help businesses make more informed decisions and support state management agency in formulating appropriate policies.

To make communication on green transformation more effective, businesses must also take a proactive role in partnering with the media, through providing background information, sharing transparent data, and facilitating factory visits and press trips with clearly defined objectives. Companies should also engage journalists who possess relevant expertise and a strong understanding of both the business and the industry. When the media has a clear understanding of the underlying issues, stories about sustainability and green transformation become more vivid and compelling, enabling them to generate a stronger impact and broader resonance across society.

Many textile and garment enterprises are currently under pressure to invest in both green transformation and digital transformation while facing limited financial resources. In your view, what approach should companies take to ensure that these transformation efforts meet market requirements while also delivering effective returns on investment? At the same time, what role can the media play in helping businesses strengthen their credibility and transparency in the eyes of investors and financial institutions, thereby improving access to green financing and other sustainable development funding solutions?

In my view, businesses should view green and digital transformation as a business imperative. They are no longer merely matters of environmental responsibility or sustainable development; they have become essential requirements for maintaining competitiveness, securing orders, and deepening participation in global supply chains. As export markets continue to tighten requirements related to environmental performance, emissions, and sustainable governance, companies that are slow to adapt risk losing their competitive edge and, potentially, access to customers altogether. For this reason, investing in green transformation is necessary, but does not require large-scale investments from the outset. In practice, many international brands have already brought criteria such as carbon emissions, renewable energy usage, supply chain traceability, and social responsibility into their supplier selection processes. As a result, green transformation is evolving from a compliance requirement into a new source of competitive advantage for textile and garment enterprises.

What is important is that businesses should develop a transformation roadmap that aligns with their scale, capabilities, and available resources. Priority should be given to initiatives that deliver clear and measurable benefits, such as energy-efficiency improvements, operational optimization, the digitalization of management processes, or solutions that directly address customer requirements. Early wins provide both proof of concept and additional capacity, allowing companies to pursue the next stages of transformation more effectively.

In addition, compliance with green standards is increasingly becoming an important factor in accessing capital. Today, many investors and financial institutions evaluate not only a company’s business performance but also its commitments to ESG (Environmental, Social, and Governance) principles before deciding whether to invest, establish partnerships, or extend credit.

In this process, the media plays a crucial role as a bridge connecting businesses, financial institutions, and regulatory authorities. Through forums, thematic seminars, and networking initiatives, the media helps bring these stakeholders closer together, enabling businesses to gain access to information on green finance, financial support programs, and emerging requirements from international markets. At the same time, the media contributes to strengthening corporate transparency and credibility by providing objective coverage of companies’ efforts in green transformation and sustainable development. Such visibility serves as an important basis for investors, banks, and business partners when assessing a company’s governance capabilities.

I believe that the role of the media today extends far beyond simply reporting the news. It has become a platform for connecting knowledge, resources, and opportunities for collaboration. When businesses, media organizations, and financial institutions work together, the textile and garment industry’s green transformation journey can be advanced in a more effective, practical, and meaningful manner.

Thank you very much for sharing your insights!

Recruitment Trends: From Academic Qualifications to Practical Performance

Participating in the 2026 Job Fair at Hanoi Industrial and Trade University (HITU), textile and garment enterprises including EMTEXCO and HANOSIMEX highlighted their efforts to strengthen the recruitment and development of young talent by building direct connections with students from an early stage. EMTEXCO has managers and department heads directly conduct interviews to evaluate candidates’ expertise, skills, attitudes, and career orientations. The company also runs annual internship programs that allow students to experience actual manufacturing environments, while providing internship stipends, meal allowances, and other benefits to attract and cultivate high-quality talent.

Meanwhile, HANOSIMEX gives priority to candidates with relevant academic training, as well as those who demonstrate positive attitudes, a willingness to learn, and adaptability to industrial working environments. The company focuses on career development programs, orientation training, investments in modern technologies, and stable employee benefits to attract and retain young workers.

As digital transformation, automation, and technological applications continue to reshape the textile and garment industry, employers are placing increasing value on hands-on capabilities, technological adaptability, and innovative mindsets rather than academic qualifications alone. In addition to professional knowledge, soft skills – including communication, teamwork, problem-solving, responsibility, and the ability to learn quickly – together with foreign language proficiency and digital literacy, are becoming essential assets that enable students to enhance their competitiveness and adapt to the changing requirements of the labor market.

Building Competencies for Future Career Goals

Final-year students at HITU believe that choosing a job is about more than just income; it is also about opportunities to learn, a professional work environment, and clear long-term career prospects. Pham Van Duy, a final-year Mechatronics student, said he is seeking a workplace that provides systematic training, experienced guidance, and a culture of innovation to help young employees quickly adapt, improve their professional skills, and turn academic knowledge into real-world competencies.

After engaging with industry representatives, Duy recognized that the textile and garment sector is undergoing a strong transformation toward automation and advanced technologies. He aims to become a   maintenance and repair engineer specializing in garment machinery, with expertise in modern electronic sewing systems and the ability to contribute to equipment innovation and preventive maintenance solutions that improve manufacturing efficiency.

Meanwhile, Nguyen Thi Nguyet, a Textile Technology student, noted that students today place greater importance on securing jobs aligned with their academic disciplines, working in professional environments, accessing training opportunities, and having clear career development paths. Through discussions with recruiters, students have gained a deeper appreciation of the role that soft skills – such as communication, teamwork, situational problem-solving, adaptability, foreign languages, and digital literacy – play in strengthening their competitive advantage.

Beyond their academic studies, HITU students actively engage in practical projects, research activities, and professional competitions to sharpen their technical thinking and develop teamwork, time management, and problem-solving capabilities. These real-world experiences give them greater confidence as they enter the workforce and help them meet the increasingly sophisticated demands of an industry undergoing technological transformation and embracing smart manufacturing.

Dr. Hoang Xuan Hiep, President of HITU: Vietnam’s Textile and Garment industry is entering a highly challenging transition period, marked by persistent global economic uncertainties, increasing competition, and rising expectations regarding workforce quality. According to Dr. Hiep, the key to overcoming these difficulties is the development of high-quality human resources. This requires enterprises to make stronger investments in training and skills development while continuing to improve wages and ensure stable livelihoods for workers.

Entering 2026, despite persistent challenges, Vietnam’s Textile and Garment industry is presented with new opportunities arising from the recovery of the global economy. In this context, retaining workers, upgrading skills, and developing a high-quality workforce must remain at the center of corporate priorities. These efforts are not merely short-term responses to current challenges but also the foundation for enhancing value creation and sustaining the industry’s competitive advantage in the new era.

Vinatex’s Capital Representatives: From Capital Preservation to Strategic Development

Mr. CEO, could you share with us the key drivers behind the Group’s decision to fundamentally reform the evaluation framework for Capital Representatives over the past year?

Over the years, Vinatex has regularly evaluated its Capital Representatives at member enterprises to acknowledge their significant contributions to the Group’s annual performance. At the same time, these assessments help identify issues that require improvement at an early stage, allowing the Group to recommend corrective measures and support Capital Representatives in carrying out their responsibilities more effectively. This, in turn, enhances their role in driving business development, as well as in preserving and increasing the value of the entrusted capital.

In 2025, this process was comprehensively redesigned. The most significant impetus for the reform came from the growing demand for greater transparency, objectivity, and precision in performance evaluations, coupled with the need to create new growth drivers for the Group as it enters a new phase of development.

Against the backdrop of an increasingly volatile textile and apparel industry and rising pressure to double-digit growth. Improving total factor productivity (TFP), strengthening supply chain linkages, fostering innovation, accelerating digital transformation, building high-quality human resources, and meeting ESG standards have become essential pillars of competitiveness and sustainable development. As a result, our evaluation system also needed to change so that it could adequately reflect these priorities.

Based on these requirements, Vinatex has developed a new evaluation framework that goes beyond measuring final financial outcomes to also assess management capabilities, adaptability to market fluctuations, and the contribution of Capital Representatives to the long-term development objectives of both their enterprises and the Group.

What is the most significant “breakthrough” in Vinatex’s 2025 evaluation criteria for Capital Representatives compared with previous years?

Although this year’s evaluation framework continues to be built around five key pillars: Finance, Market, Human Resources, Investment and Development, and Digital Transformation — the most significant breakthrough lies in the greater emphasis on quantitative assessment and a shift in approach from merely evaluating end results to assessing the quality of governance and the capability to deliver sustainable performance.

Previously, the assessment process focused primarily on indicators related to production and business performance. This year, the Group has added a range of new criteria that more comprehensively reflect management quality and the company’s ability to compete and grow sustainably over the long term.

Specifically, within the financial dimension, for the first time, Vinatex has introduced indicators such as the Cash Conversion Cycle (CCC) and Total Factor Productivity (TFP) to assess cash flow management, growth quality, resource efficiency, and long-term competitiveness. In the market dimension, the evaluation framework goes beyond revenue generation and considers market diversification, customer portfolio quality, and the sustainability of the company’s market structure. In terms of investment and digital transformation, the new criteria are designed to encourage enterprises to increase technology investments, the application of advanced management practices, and enhanced competitiveness. At the same time, the human capital indicators have been further strengthened to support the development of a high-quality workforce.

Another notable enhancement is that the indicators have been designed with adjustment coefficients tailored to the specific characteristics of each business segment — such as spinning, weaving, and garment manufacturing — to ensure fairness and enhance comparability across different business units.

Aligning the Group’s strategic objectives with actual performance at member companies has always been a challenging task. This year, what principles did Vinatex apply in designing the KPI framework for Capital Representatives to ensure that they move beyond merely “preserving capital” and take a more proactive role in “driving strategic development”?

To provide a comprehensive assessment, the KPI framework for Capital Representatives has been structured around a dual objective: measuring current performance while also evaluating the enterprise’s capacity to create sustainable growth and long-term value.

We believe that current business performance remains the most important indicator of a Capital Representative’s management and leadership effectiveness and should be recognized properly. Therefore, performance indicators reflecting current results — such as Return on Equity (ROE), dividend payout ratio, and the actual value of dividends submitted to Vinatex — continue to carry significant weight in the evaluation framework. These metrics directly reflect capital efficiency, profitability, and the enterprise’s tangible contribution to the Group’s overall financial strength.

However, relying solely on short-term results makes it difficult to create motivation for companies to invest in the future. Therefore, in addition to indicators that measure current performance, this year’s KPI framework introduces new metrics to assess governance quality, financial health, and the enterprise’s long-term development capabilities.

More importantly, we have established a direct linkage between the Group’s strategic objectives and the evaluation framework for Capital Representatives. Key strategic priorities such as market development, customer quality enhancement, digital transformation, technological innovation, human capital development, and ESG implementation — have all been translated into specific performance indicators.

The new KPI framework, therefore, is not merely a tool for evaluating annual performance, it also acts as a mechanism for transmitting the Group’s strategic priorities to every member enterprise, ensuring that Capital Representatives clearly understand their responsibility to deliver near-term results while simultaneously advancing the Group’s long-term development directions.

Building a Proactive, Transparent, and Effective Governance Culture

Considering that, enterprises are influenced by numerous external factors, particularly market conditions. How does the Group’s 2025 evaluation framework distinguish the actual capabilities of Capital Representatives from the impact of these external factors?

In developing the 2025 evaluation framework, one of the most important principles was to select indicators that accurately reflect the managerial capabilities of Capital Representatives while minimizing the influence of external factors such as market fluctuations, capital size, and industry-specific characteristics.

For example, within the financial pillar, rather than relying solely on absolute profit figures, the Group uses Return on Equity (ROE) as a key metric to measure capital efficiency. This approach provides a clearer assessment of management effectiveness and the ability to create value from the capital entrusted to the enterprise.

Similarly, in assessing operational performance, the Group has incorporated Total Factor Productivity (TFP) into the evaluation framework instead of relying solely on revenue or output growth rates. TFP measures the efficiency with which key resources, such as labor and capital, are utilized, thereby providing a more accurate assessment of the quality of a company’s growth.

In the market dimension, the evaluation framework also goes beyond revenue size and  dives into indicators that reflect the quality of market development, including the share of revenue generated from key markets, customer mix, and the proportion of strategic customers. These metrics help assess an enterprise’s adaptability, its ability to sustain competitiveness, and its capacity to mitigate risks in a volatile market environment.

In addition, many of the indicators have been tailored to the specific characteristics of different business segments and incorporate adjustment factors or sector-specific indices for the Spinning and Garment industries, thereby ensuring comparability and fairness across the Group.

In essence, this year’s framework goes beyond evaluating outcomes alone; it focuses on assessing the quality of governance and the managerial capabilities that drive those outcomes.

What changes does the Group expect the new KPI framework to bring to the governance culture of its member enterprises after a period of implementation?

Our greatest expectation is to gradually foster a culture of proactive, transparent, and performance-oriented governance across our member enterprises.

More importantly, strategic development objectives must be clearly understood and embraced by Capital Representatives. In doing so, they will not only focus on achieving immediate business targets but also take a proactive role in building long-term growth drivers, including market development, digital transformation, human capital enhancement, and sustainable development.

Through the new KPI framework, the Group also aims to encourage member enterprises to transition from experience-based management to data-driven management, supported by clear and measurable performance indicators. As a result, strategic objectives can be translated into concrete actions, responsibilities can be assigned more clearly, and the overall quality of corporate management and decision-making can be progressively enhanced.

What should be the next step to ensure that the governance and evaluation of Capital Representatives truly become a strategic management tool for the Group?

In the coming period, the Group will continue to refine the governance framework for Capital Representatives at its member enterprises in a more modern, transparent manner and with closer alignment to the Group’s overall management and operational processes. Long-term development criteria will be established early and maintained consistently, enabling Capital Representatives to align with the Group’s strategic objectives and proactively incorporate them into their day-to-day management and long-term decision-making processes. At the same time, a set of supplementary indicators will be designed to reflect the specific characteristics of each year’s market conditions. In addition, the Group will introduce adjustment factors that consider the degree of managerial complexity faced by larger-scale enterprises.

A key priority will be to accelerate digital transformation and build a centralized management data system. By ensuring that production, business, financial, and governance data are continuously updated, the Group will be able to monitor the performance of Capital Representatives against their objectives in real time. This will enable timely support, early warnings, and necessary adjustments, rather than relying solely on year-end evaluations.

In addition, we want the evaluation results to go beyond the classification, recognition, and appointments. They should become a tool for driving continuous improvement. Issues identified through the evaluation process will be translated into governance recommendations and concrete action plans tailored to each enterprise, with effective support and close collaboration from the Group’s functional departments.

Thank you for the interview!

In the United States, the United States Department of Agriculture (USDA) has launched the “Great American Cotton Plan” to promote domestic cotton consumption, support cotton growers, and revitalize the country’s textile supply chain. The program encourages the use of natural fibers, expands credit support, modernizes the textile industry, and prioritizes the use of U.S. cotton throughout supply chains. This trend could increase demand for U.S. cotton, potentially affecting raw material competition and international cotton prices.

In India, the government has exempted all cotton import duties from June 1 to October 31, 2026, in an effort to ease supply shortages and lower domestic cotton prices. This policy is expected to significantly reduce raw material costs for Indian spinning mills, thereby enhancing their competitiveness relative to Vietnamese yarn exporter in major markets such as China, Bangladesh, and Turkey.

Meanwhile, China has extended its target price support policy for Xinjiang cotton at CNY 18,600 per ton through 2028 and continues to accelerate the development of its domestic spinning industry. This policy is expected to help sustain cotton supply and expand China’s yarn production capacity, thereby maintaining competitive pressure on Vietnam’s spinning sector.

Against this backdrop, Vietnamese textile and yarn producers need to closely monitor global cotton policy developments and price movements, capitalize on favorable opportunities to lock in raw material purchases, and keep track of yarn price trends in India in order to formulate appropriate pricing strategies and safeguard their export competitiveness.

Latest Regulations on Administrative penalties in the Customs sector

On May 15, 2026, the Government issued Decree No. 169/2026/ND-CP on administrative penalties in the customs sector. The Decree will take effect on July 1, 2026, and introduces several significant changes compared with Decree No. 128/2020/ND-CP.

The new Decree introduces a definition of  object and instrumentalities involved in administrative violations, extends the statute of limitations for imposing administrative penalties by an additional year for cases referred by judicial authorities, and adds 6 circumstances in which enterprises will not be subject to penalties when they make supplementary declarations and fulfill their tax obligations in accordance with the guidance of competent authorities.

In addition, the Decree introduces several new categories of customs-related violations and establishes provisions for handling administrative violations in the electronic environment to support digital transformation. It also removes a number of provisions under Decree No. 128 that are no longer considered appropriate. Enterprises should promptly update and familiarize themselves with these changes to ensure compliance with customs regulations from July 1, 2026 onward.

Government accelerates decentralization, reduction and simplification of Administrative procedures and Business requirements

On May 18, 2026, the Government issued Resolution No. 66.18/NQ-CP on decentralization and the reduction and simplification of administrative procedures and business conditions, effective from July 1, 2026. Under the Resolution, several procedures relating to fire prevention and firefighting (FPF) have been abolished, including acceptance inspection and commissioning procedures for projects that have already undergone FPF design appraisal. In addition, documentation requirements for FPF design appraisal have been simplified.

In the area of occupational safety and health (OSH), the procedures for reviewing and assessing the operating conditions of enterprises conducting self-training in occupational safety and health have been abolished.

In the accounting sector, regulations governing the conditions, examinations, issuance, and revocation of accountant certificates will no longer be applied. Individuals who obtained certificates before March 1, 2027, will remain eligible to sit for the auditor examination.

For the construction sector, the processing time for construction permit applications has been reduced to 10 working days, while applications for amendments to construction permits will be processed within 9 working days, provided that the files are complete and valid.

Detailed guidelines for the implementation of regulations on Electronic Employment Contracts

On May 15, 2026, the Ministry of Home Affairs of Vietnam issued Circular No. 08/2026/TT-BNV providing guidance on the implementation of electronic employment contracts (e-contracts) in accordance with Decree No. 337/2025/ND-CP. Effective from July 1, 2026, e-contracts are encouraged as a replacement for paper-based contracts in order to enhance human resource management efficiency and simplify administrative procedures.

Under the new regulations, both employees and employers are required to register accounts on the e-contract platform through the national electronic identification system (VNeID). Each e-contract will be assigned a unique identification number (ID). The platform will also be used to report workforce changes and facilitate the transition from paper-based contracts to electronic contracts. All electronic employment contracts and their appendices will be stored on the system for a period of 10 years from the date of contract termination.

Sharp increase in sea freight rates requires Textile and Garment firms to re-examine logistics costs

International ocean freight rates are rising sharply as the peak shipping season has arrived earlier than expected, with rates for 40-foot containers increasing by 23% to USD 3,433 per container. Freight rates on the routes from Shanghai to Los Angeles and New York have risen by 31% and 20%, reflecting a strong recovery in global shipping demand.

The increase has been driven primarily by companies accelerating shipments ahead of potential U.S. tariff adjustments scheduled for July 2026, rising import demand related to the 2026 FIFA World Cup, and geopolitical risks in the Middle East that have forced many shipping lines to reroute around Africa. Freight rates are expected to remain elevated at least through the end of July 2026.

Under these circumstances, textile and garment enterprises need to review and update logistics costs within their cost structures, proactively plan delivery schedules, secure shipping space early, and fully account for freight rate volatility to avoid unexpected expenses and protect the profitability of their orders.

A Turning Point in the Supply Chain

According to Haluk Demirtel, Vice President of Operations at Li & Fung, Vietnam’s Textile and Garment industry is experiencing a fundamental structural shift – from a pure contract manufacturing model to an FOB model characterized by greater autonomy and higher value creation. This transformation represents a critical turning point in strengthening Vietnam’s role and upgrading its position in global supply chains.

This transformation has been clearly reflected in trade performance. In 2024, Vietnam surpassed China for the first time to become the largest exporter of textiles and garments to the U.S. market during the first 5 months of the year. Free trade agreements, together with global sourcing trends favoring flexible manufacturing and smaller order volumes, are creating new opportunities for domestic designers and manufacturers.

However, Vietnam’s Textile and Garment industry continues to face significant challenges, particularly its heavy dependence on imported raw materials, which account for approximately 70% of total demand, as well as mounting pressures to achieve sustainable development and enhance competitiveness within global supply chains.

Making Sustainability a Daily Practice

According to Nguyen Lien Chi, Content Director of ELLE Vietnam, Vietnam’s fashion industry continues to face a gap between its manufacturing capabilities for international brands and the development of its domestic fashion labels. Although Vietnam has emerged as a major manufacturing hub, many local brands still rely on low-cost imported materials and have yet to fully understand the principles and processes of responsible production.

She believes that the media should play a critical role in raising awareness and driving behavioral change by “localizing” the concept of sustainability, making its values more accessible, practical, and applicable to everyday business practices. At the same time, Vietnam’s fashion industry needs to establish stronger platforms for  networking, communication, and collaboration among designers, suppliers, and industry experts in order to foster sustainable development.

Slow Fashion and the Redefinition of Value

Fashion designer Vu Thao, founder of Kilomet109, said that the brand has built a network of direct partnerships with artisan communities and ethnic minority groups across Vietnam, utilizing natural fibers and dyes while preserving traditional weaving techniques. According to her, fashion is not merely a product; it also plays a role in safeguarding cultural heritage and improving the livelihoods of local communities.

However, many traditional weaving crafts are facing the risk of disappearing, with only a handful of families in some areas continuing to practice these traditions. At the same time, the understanding of value in fashion is evolving – from a focus on chasing trends to one that places greater emphasis on identity, sustainability, and more meaningful values.

She emphasized that tradition should not be romanticized, as the communities themselves also aspire to innovate and modernize their traditional products. In her view, building sustainable fashion is a long-term journey that requires time, trust, and sustained commitment, because there are “no shortcuts” to  building a truly sustainable fahsion industry.