Quick Answer
Vietnam is a common choice for companies pursuing supply chain diversification (China plus one) and is a member of the Regional Comprehensive Economic Partnership (RCEP): RCEP entered into force on 1 January 2022 for 10 countries including Vietnam, Thailand, Japan, China and Australia, and for South Korea on 1 February 2022. Keys to sourcing from Vietnam: (1) verify factories on site or through a third party, (2) put specifications and samples in writing, (3) confirm origin and destination duties, (4) spell out payment and document terms. Note that Taiwan is not an RCEP member, so Vietnamese goods exported to Taiwan don’t get RCEP preferences; but goods exported directly from Vietnam to RCEP members can be assessed against RCEP rules of origin.
Why Do Companies Consider Vietnam?
According to English Wikipedia’s “China plus one” article, companies adopt the strategy because of rising operating costs, risk diversification and access to new markets, with common alternatives including India, Vietnam, Thailand, Indonesia, Malaysia and the Philippines. Vietnam has therefore become one of the production locations many brands and buyers evaluate.
What RCEP Means for Vietnam Sourcing
| Situation | Does RCEP apply? |
|---|---|
| Vietnamese goods exported to RCEP members such as Japan or Australia | Check RCEP rules of origin to claim preferential duties |
| Vietnamese goods exported to Taiwan | No; Taiwan is not an RCEP member |
| Transshipped via Taiwan and re-exported | Transshipment doesn’t change origin; direct consignment rules also apply |
ASEAN explains that RCEP’s rules of origin and regional cumulation let businesses use regional supply chains more flexibly. This is a common multilateral trade plan: lawfully shipping directly from Vietnamese factories to RCEP markets. See What Is Multilateral Trade? and What Are Rules of Origin?
The Vietnam Sourcing Process
- Define needs: specifications, quantity, target price, lead time and target-market regulations.
- Find suppliers: trade shows, industry directories, sourcing agent networks.
- Screen and sample: business records, capacity, certifications; test samples for actual use.
- Audit the factory: quality, food safety or social responsibility; see Factory Audit vs Product Inspection.
- Negotiate and contract: payment, lead time, quality standards, Incoterms.
- Track production and inspect.
- Ship with documents: commercial invoice, packing list, bill of lading, certificate of origin.
Common Challenges and Responses
| Challenge | Response |
|---|---|
| Language and communication | Put specifications, drawings and packaging requirements in writing |
| Quality consistency | Pre-shipment inspection and retained approval samples |
| Lead times | Regular production updates and built-in buffers |
| Documents and origin | Confirm the certificate of origin format the destination requires in advance |
How Tang Sugar Can Help
Tang Sugar’s international sourcing agent service focuses on Asia, the Americas and parts of Europe, helping with supplier development and evaluation, specifications and samples, negotiation, lead times and shipping coordination. When goods need to ship directly from Vietnamese factories to a third country, it can be combined with our triangular and multilateral trade service. Contact us.
FAQ
Is Vietnam an RCEP member?
Yes. RCEP entered into force for Vietnam and nine other countries on 1 January 2022.
Can imports from Vietnam to Taiwan use RCEP preferences?
No. Taiwan is not an RCEP member.
What should I watch for when sourcing from Vietnam?
Written specifications and samples, factory audits and pre-shipment inspection, confirmed origin and destination duties, and clear payment and document terms.
Can Vietnamese factories ship directly to other countries?
Yes. This is a common third-country shipment arrangement in triangular or multilateral trade; documents and origin information must be consistent.
Further Reading
- Thailand Sourcing Guide
- China Plus One: How to Diversify Your Supply Chain
- Finding and Evaluating Overseas Suppliers
- China Sourcing Agent Guide
- How to Choose a Taiwan Trading Company
Sources
- ASEAN: RCEP Agreement enters into force
- Wikipedia: China plus one
- Tang Sugar: International Sourcing Agent
