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1 Sep 2026

Econ Digest

Why Vietnam? A large market, a manufacturing base, or a gateway connecting Thai businesses to the world

คะแนนเฉลี่ย
  • Vietnam is a large, fast-growing market, but opportunities are not equally distributed across all segments. Vietnam offers strong potential for consumer products, food and beverages, health and beauty products, and services targeting younger generations and urban populations. However, average income per capita remains around 40% lower than that of Thailand, making consumers highly value-conscious and price-sensitive. Purchasing power and consumer behavior also vary across Hanoi, Ho Chi Minh City, and other cities. Thai products benefit from their reputation for quality and strong brand image, but companies need to adjust pricing, packaging sizes, and distribution channels to suit different customer segments.
  • Vietnam serves as a manufacturing base for multinational corporations' exports, creating opportunities for Thai businesses to integrate into global supply chains. Opportunities are particularly strong in supporting industries such as electronics products, packaging, plastic components and raw materials, food and beverages, warehousing, and logistics. However, investment decisions should not be based solely on labor costs. Businesses must consider total costs, including productivity and workforce skills, suppliers, energy, land, logistics, and regulations. For Thai companies, the optimal strategy may not be to relocate all production to Vietnam but rather to allocate manufacturing activities between Thailand and Vietnam according to each country's strengths.
  • Thai companies can manufacture in Vietnam to access markets beyond Vietnam. Vietnam has 17 free trade agreements (FTAs) covering more than 50 countries and markets worldwide. Its key advantages include membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and FTA with the EU and the UK, in addition to the Regional Comprehensive Economic Partnership (RCEP) and agreements under the ASEAN framework. This network makes Vietnam not only a destination market but also an export base to markets where Thailand does not have direct FTAs. Nevertheless, access to tariff preferences depends on rules of origin and standards of the destination country. Businesses therefore need to design their sourcing strategies and production processes accordingly from the outset.
  • Ultimately, Vietnam may not be the answer for every business, but it is a strategic option that should not be overlooked. For some companies, Vietnam represents a new consumer market; for others, it serves as a manufacturing base; and for some, it is a bridge that connects Thai expertise with global markets.​



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Econ Digest

Vietnam