Outsourcing in Vietnam has grown steadily for the past decade and has become an attractive destination for Global Business Process Outsourcing( BPO) thanks to both internal and exteral factors.
Development of Outsourcing in Vietnam
Although the outsourcing industry of Vietnam is fairly young when compared to Philippines, the global leading BPO, it is emerging as an outsourcing destination in the Asia-Pacific region:
- Ho Chi Minh City is Top Outsourcing City in many years( (Tholons)
- Vietnam Ranked 5th in Global Services Location Index (A.T. Kerney, 2019)
Competitive Factors of Outsourcing in Vietnam
- Strategic Location: Strategically located in Southeast Asia and bordered China, Vietnam is desintation which foreign investors seek to diversify their oursoucing chain and choose for the moving from China as wel.
- Strengthening Integration into Global Economy: Vietnam has particiapted Large Trade Organizations and Signed Important Agreements to Open the economy such as: APEC member in 1998, WTO member in 2007, CPTPP 2019, EUVFTA 2019…etc.
- Improving Business Regulations: Vietnam Government has issues laws and regulations to provide an efficient, transparent, and business-friendly environment for foreign investors: Laws on Investment 2020, Laws on Business 2020, Laws on Intellectual Property 2022…etc.
- Stability in Economic Growth and Politics: Despite of Covid19 Pandemic, Vietnam remains the economic growth at high rate. In addition, Vietnam is one of the most politically stable countries in South East Asia.
- Young Population with Growing Skill: More than 72 Million Vietnamese are in the working age population. Labour participation rate is above 77% that makes Vietnam considered as one of the lowest unemployment rates worldwide. Vietnam is in period ” Golden Population Structure”: for every two or more employed persons, there is only unemployed invidual. Though English is not fluent as Filipinos, Vietnam’s authority has conducted the policies to imporve this skill for the labor force.
- Competitive Labor Cost: Low Labor Cost has continually made it a very attractive outsourcing destination for foreign investors and importers.
In Conclusion, there are many competitive advantages of Outsourcing in Vietnam. For foreign company, it is important to consider your specific needs and requirements before entering into an agreement with an outsourcing service provider. In case, your side not has representative in Vietnam, cooperate with an Outsourcing Agency in Vietnam recommended.