Should European Brands Manufacture in Vietnam? Rethinking the Import vs. Local Production Decision

For years, many European brands have been reluctant to manufacture in Vietnam. Quality, intellectual property (IP), and the value of keeping production in Europe have traditionally made local manufacturing difficult to justify.

But Vietnam’s manufacturing capabilities have changed. For brands entering Vietnam and Southeast Asia, the question is increasingly less about whether Vietnam can produce to European standards and more about whether local production makes commercial sense.

Vietnam’s manufacturing capabilities are evolving

Vietnam has become an increasingly important manufacturing destination in Southeast Asia. In 2025, manufacturing and processing accounted for around 56.5% of newly registered FDI, equivalent to approximately US$9.8 billion.

Across healthcare, beauty and consumer products, local manufacturers are also developing stronger technical and quality capabilities. This does not mean every manufacturer is suitable for international brands, but it does make local production a more realistic option than it was a decade ago.

The cost of staying fully imported

Importing finished products from Europe offers control over production and country-of-origin positioning. However, it also comes with longer lead times, international logistics, import costs and higher landed prices.

This becomes particularly relevant in Vietnam’s fast-growing consumer markets. Vietnam’s beauty and personal care e-commerce market was estimated at VND 74.4 trillion (approximately US$3 billion) in 2025, growing around 30% year on year.

For European brands, the challenge is therefore not simply market entry. It is maintaining a price structure that remains competitive across distributors, pharmacies, modern trade and e-commerce.

IP is still the key concern

If quality is becoming less of a barrier, IP remains the key concern. But localization does not mean giving a manufacturer the entire formula. Brands can keep key ingredients or formulation steps in Europe while localizing filling and packaging.

The right approach depends on the category: local production can improve competitiveness for supplements and value-driven personal care, while premium skincare may benefit from retaining “Made in France” as part of its value proposition.

A staged approach may be more practical

Rather than choosing between fully imported and fully localized production, brands can take a staged approach:

Import → prove demand → localize packaging or filling → consider deeper production when volume justifies it.

This allows brands to validate market demand before making a larger manufacturing commitment.

Ultimately, “Made in Vietnam” is not automatically a downgrade. The decision depends on the category, positioning, IP sensitivity, expected volume, regulatory requirements and overall supply-chain economics.

The strategic question is simple: What should stay in Europe, what can move to Vietnam, and at what stage?

Need deeper insights or support with your go-to-market strategy in Vietnam and Southeast Asia? Contact us