China Plus One: Why Smart NZ Importers Are Adding Vietnam to Their Sourcing Mix

What Is the 'China Plus One' Strategy?

China Plus One is exactly what it sounds like: instead of relying entirely on China for your manufacturing, you deliberately develop at least one alternative sourcing country. The goal is to reduce supply chain risk -- whether from tariffs, geopolitical tensions, factory delays, or the kind of unexpected disruptions we've all learned to expect.

For most Kiwi businesses, China will remain the primary source for the majority of manufactured goods. It has unmatched infrastructure, supplier density, manufacturing capability, and -- for many categories -- the most competitive pricing. But having a genuine second supplier or fallback option is increasingly seen as good business practice rather than paranoia.

Vietnam is the most popular 'plus one' destination globally right now, followed by India, Thailand, and Indonesia.

Why Vietnam? The Case for Adding It to Your Sourcing Mix

1. Competitive labour costs (still below China's): Vietnam's manufacturing wages remain lower than China's, though rising at roughly 10% per year. For labour-intensive products like garments, footwear, and furniture, this still translates to a meaningful cost advantage.
2. Rapidly maturing manufacturing sector: Vietnam is moving beyond OEM (making to others' specs) into ODM (designing and developing products itself). More sophisticated capability for importers who want customised products.
3. Strong EU trade relationships: The EU-Vietnam Free Trade Agreement enables 0% tariffs on furniture exported to the EU -- meaning many Vietnamese factories already produce to European quality standards.
4. Sustainability focus: Vietnamese manufacturers are increasingly investing in certifications like FSC, GOTS, and OEKO-TEX -- important for NZ brands selling to sustainability-conscious consumers.
5. Government infrastructure investment: Vietnam is actively building ports, logistics networks, and industrial zones to attract more foreign manufacturing.

Sourcing Hack #1: The EU Quality Shortcut -- When vetting Vietnamese furniture or textile suppliers, look specifically for factories that already export to EU markets. They're required to meet higher product standards and documentation requirements -- you get quality assurance 'for free' by piggybacking on their EU compliance. Ask for EU buyer references as part of your vetting process.

What Products Work Well from Vietnam?

Vietnam isn't a one-size-fits-all replacement for China. There are product categories where it genuinely excels:

• Furniture and timber products: Vietnam is a top-five global furniture exporter -- US$15.5B in exports Jan-Nov 2025. Solid wood dining sets, rattan outdoor furniture, timber shelving -- quality is strong and the range is growing rapidly.
• Textiles and garments: Apparel, activewear, loungewear, and children's clothing are well-established industries. Vietnam's garment sector is targeting US$48B in exports by end of 2026.
• Footwear: Vietnam is the world's third-largest footwear exporter. If you're sourcing shoes, sandals, or boots, it's worth a serious look.
• Handcrafted and artisanal products: Woven baskets, ceramics, lacquerware, bamboo homewares. Great for NZ lifestyle and gift brands targeting the premium market.

Where China still leads: Consumer electronics, plastics and injection-moulded products, industrial equipment, and high-volume commodity goods requiring significant automation.

The Honest Challenges of Sourcing from Vietnam

1. Supplier vetting is harder: China has mature platforms like Alibaba and Made-in-China.com with verified supplier profiles. Vietnam's B2B platforms are less developed, making it harder to vet suppliers without boots on the ground.
2. MOQs can be higher: Many Vietnamese factories are accustomed to large export orders (primarily for EU and US brands) and aren't always set up for smaller quantities.
3. Communication can be trickier: English proficiency varies more widely than in China's established export manufacturing zones.
4. Factory visits are more complex: Industrial zones are spread across the country rather than concentrated in specific export hubs.
5. Production costs remain higher than some alternatives: Vietnam is 40-45% more expensive than Bangladesh or Indonesia for certain categories.

Sourcing Hack #2: The Agent Advantage -- When starting out in Vietnam, working with a local sourcing agent is worth every cent. They know which factories are legitimate, who to call when things go sideways, and how to navigate local business culture. Don't try to manage a new Vietnamese supplier relationship entirely from Auckland.

How to Get Started with Vietnam Sourcing

1. Identify one product category to test first -- don't transition your entire range at once.
2. Find verified suppliers through Global Sources, Vietnam.vn, or a sourcing agent with established Vietnam connections.
3. Request samples before committing -- non-negotiable with any new supplier, anywhere in the world.
4. Be precise in your specifications. Vietnamese factories are capable of high quality, but only if you tell them exactly what you need.
5. Plan for longer lead times initially. New supplier relationships always take longer to establish.
6. Run a proper risk assessment. Understand your exposure if the new supplier has quality issues or delays.

Is Vietnam Right for You?

Vietnam makes sense if you're sourcing furniture, garments, footwear, or artisanal homewares; if you're concerned about supply chain concentration in China; or if your customers are increasingly asking about ethical and sustainable sourcing.

It's less compelling if you're sourcing electronics, plastics, or highly automated products; or if your price sensitivity means you need to be in the absolute cheapest market for your category.

The truth is, the best supply chains we see are rarely either/or -- they're both. China for some things, Vietnam for others, each product in the place that makes the most sense for it.

Figuring out whether Vietnam makes sense for your sourcing is something our team genuinely loves helping with. Book a free consultation with the Epic Sourcing team at epicsourcing.co.nz and let's have a look at your specific product together.