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Southeast Asia: The Next Manufacturing Powerhouse?

By FedEx | October 31, 2023

Vietnam is among the global production hubs on the rise in Southeast Asia, where increased shipping capacity and faster transit times are helping local businesses grow cross-border trade.

Are you a small business producing, exporting, or importing in or out of Southeast Asia? We’ve launched new flights from Vietnam, improving shipping times to major Asia markets and Europe by 1 day.

Read on to find out how our enhanced network enables SMEs to access greater cross-border opportunities than ever before - and why you should include Southeast Asia as part of your future supply chain strategy.

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Southeast Asia has shown remarkable and sustained growth in recent years, defying numerous headwinds to emerge as a global powerhouse.

For decades, export manufacturing has played a critical role in powering these Tiger Economies. And now, Southeast Asia’s manufacturing hubs are growing and diversifying further, with higher-value goods and services.

Globally, companies are diversifying their supply chains across SEA to be more resilient against disruption. Moving manufacturing footprints away from a single source to produce goods closer to end-markets is a rising trend post-COVID. Vietnam is one of the markets increasingly being tapped for production and supply chain capabilities.

In response to expansive potential in SEA, we’ve strengthened our network in the region to give SMEs greater interconnectivity for intra-Asia and Asia-Europe trade. All of this presents businesses with opportunities to unlock new business growth.

Why businesses should import from Vietnam

Vietnam has developed the infrastructure and manufacturing ability to offer major, emerging opportunities for trade. Here’s why you should consider tapping possibilities in the region:

1. Location and connectivity

One of Vietnam’s advantages is its location. The country neighbors major markets such as China and other parts of Southeast Asia, and has strong historic trade links with markets like Singapore and India. A long coastline also provides direct access to South China Sea ports and proximity to major global shipping routes.

At FedEx, we have just increased flights on our route from Ho Chi Minh City to the rest of Asia and Europe. Exporters shipping from Southern Vietnam will benefit from faster connections to major Asian markets in just one business day, and two business days to Europe.
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2. Upward growth

Vietnam is also a high-growth market. In particular, its southern key economic region (KER) is on the up, recording growth of 5.7% in import and export turnover. Led by Ho Chi Minh city, the region is a growing manufacturing player in the textile industry, with major sportswear brands based in the region.

3. Emergent tech

As part of Vietnam’s global factory status, the country has emerged as a potent force in technology and consumer electronics. One rising industry is the production of semiconductors, which power everything from smartphones and laptops to cars and Internet of Things (IoT).

This has led to an increased demand for air cargo transportation, serving the tech industry’s need for more shipping capacity and faster transit times. And demand is expected to rise, driving investments in the region for digital products and services.

4. SME industry

SMEs are the heartbeat of Vietnam’s economy, accounting for 96% of all businesses in the country. Local businesses have opportunities to achieve cross-border trade success in Asia and beyond, but need to work with a global logistics network that can help them compete and win.

RELATED: 5 Reasons SMEs Should Tap Into Intra-Asia Trade

Why speedy logistics is crucial for Vietnamese SMEs

Roughly a third of the global population now shop online. With e-commerce becoming a core focus, Vietnam’s manufacturers need powerful export strategies.

There’s greater demand for reliable logistics solutions to ship products straight from the source to wholesalers and end-customers elsewhere. On top of that, the growth of e-commerce poses clearance and delivery challenges, making fulfillment and customer satisfaction more complex for shippers.

In major B2B exporting industries, many rely on fast time-definite shipping, which offers more choice, reliability, and speed. Offering this to customers also gives retailers a competitive edge and can increase potential revenue.

Beyond business advantages, the delivery experience has - in today’s e-tail landscape - become an extension of who a brand is and what they stand for.
Globe and magnifying glass focused on Southeast Asia and Europe

At FedEx, we’re dedicated to enabling cross-border trade to customers, from SMEs to multinationals. To support our customers in Southeast Asia and beyond, we offer a complete suite of tools and resources to ship with ease, such as FedEx Ship Manager, FedEx Delivery Manager , FedEx Mobile, and other online tools to make international delivery more convenient.

Thanks to our operational strength and differentiated service offerings, SMEs and e-commerce businesses across AMEA and Europe can enjoy fast connectivity and an enhanced customer experience.

How businesses can expand to Europe through SEA and Vietnam

Asia has long been a world leader in regional integration, forging ever-adapting networks in trade, investment and innovation. And businesses in the region are always looking to Asia-Europe trade for growth prospects.

Southeast Asia’s businesses, in particular, are using e-commerce as a conduit for trade success and growth with Europe.

ASEAN nations are the EU’s third largest trading partner outside Europe, after the US and China. The EU is also the second-largest investor in ASEAN countries, and is now the main trade partner for Central Asia, accounting for about a third of its overall external trade.

Of these countries, Vietnam has played a major role in exporting tech and textile products, including 29.6K metric tons of high-tech goods and 24.2K metric tons of consumer fashion goods in 2022.
Female business owner in dungarees holding FedEx package

Meanwhile, major trade deals like the Regional Comprehensive Economic Partnership (RCEP) are already improving access to trade between markets in Asia, and will continue to help break ground on future trade.

RELATED: The RCEP Will Help Vietnamese SMEs Go Global

For Asian SMEs and e-commerce businesses exporting to or importing from Europe, new network expansions can enable them to connect more seamlessly to and from European countries and territories.

Businesses in the region looking to go global are partnering with smart logistics providers like FedEx to take their ventures to new horizons. Are you ready to tap into the vast wealth of opportunities in intra-Asia and Europe?

Get going now: Sign up for a FedEx account to unlock faster shipping.
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