Vietnam's textile and garment sector is demonstrating remarkable resilience in 2025, navigating a complex landscape of recovering global demand and competitive regional pressures. While the industry celebrates substantial export growth in its core garment segment, yarn manufacturers face a different reality—one marked by pricing challenges despite increasing production volumes.

The January-November 2025 period has been particularly revealing, showcasing both the strengths and vulnerabilities of Vietnam's position in the global textile supply chain. As international buyers return to Vietnamese suppliers and orders extend well into the second and third quarters, the sector's recovery from previous years' slowdowns is undeniable. Yet beneath this positive narrative lies a more nuanced story about yarn pricing dynamics that deserves closer examination.

Strong Growth in Textile and Garment Exports

Vietnam's textile and garment sector recorded nearly $34.8 billion in export value in the first nine months of 2025, up 7.7% from the same period last year, setting a strong foundation for the full eleven-month period. The industry has shown consistent momentum throughout the year, with exports reaching major markets across the globe.

Industry Outlook and Strategic Adaptations

Vietnam's textile and garment industry has demonstrated impressive adaptability in 2025. The Vietnamese textile-garment industry's export revenues is expected to hit $46 billion this year, marking a 5.6 per cent YoY increase, showcasing the sector's resilience and growth trajectory.

Strategic Initiatives for Sustained Growth

Market Diversification: Beyond traditional markets like the US and EU, Vietnamese manufacturers are expanding into emerging markets. Exports to Islamic countries alone reached $1 billion, and by July 2025, revenue from the Middle East had already hit $700 million.

Technology Investment: The industry is rapidly embracing automation and digital transformation to enhance competitiveness and meet stringent sustainability requirements from international buyers.

Supply Chain Integration: Fifty-two per cent of the raw materials used by the sector is now procured from indigenous sources, reducing dependency on imports and improving cost structures.

Conclusion

Vietnam's textile and garment industry presents a tale of two segments in January-November 2025. The garment manufacturing and export sector has achieved impressive growth, supported by recovering demand in major markets, particularly the United States, and successful market diversification strategies. With the US remaining the top buyer and companies securing orders well into future quarters, the downstream segment's outlook remains positive.

However, the yarn manufacturing segment faces a more challenging reality. Despite achieving volume growth, yarn exporters continue to grapple with regional price pressure, particularly from competition in India and China. The dominance of China as a yarn purchaser—accounting for the vast majority of exports—creates both opportunity and vulnerability, as pricing power remains firmly with buyers.

Looking ahead, Vietnam's textile industry must navigate these divergent realities carefully. Success will require continued investment in productivity and automation, strategic market diversification beyond traditional buyers, and most critically, addressing the yarn segment's profitability crisis through supply chain optimization and value-added product development. The sector's ability to balance volume growth with sustainable pricing will ultimately determine its long-term competitiveness in the global textile market.

For yarn manufacturers specifically, the path forward may require moving up the value chain toward specialty yarns and technical textiles where pricing power is less commoditized, while also working toward greater raw material self-sufficiency to reduce input cost volatility. Only through such strategic adaptations can Vietnam's yarn sector achieve the profitability that matches its impressive production volumes.