Updated August 2026 — by TK Wang, Epic Sourcing UK
Right, let’s have a frank conversation about what’s happening in global manufacturing. If you’re currently sourcing entirely from China, you’ve probably felt the ground shift beneath you over the past couple of years. Factory prices that seemed stable have crept up. The political uncertainty between China and the West has gone from background noise to front-page news. And if any of your customers or investors have mentioned “supply chain resilience” recently — they’re not just making polite conversation.
The China-Plus-One strategy isn’t a buzzword. It’s what serious UK brands are quietly doing right now: keeping their China production running whilst simultaneously developing a secondary sourcing base — most commonly in Vietnam. This guide is the playbook we wish every UK client had read before they started.
What is China-Plus-One?
China-Plus-One is a supply chain diversification strategy where a business maintains its existing China-based manufacturing whilst also developing production capability in at least one additional country — most commonly Vietnam, India, or Bangladesh. The goal is resilience: protecting your supply chain from geopolitical disruption, tariff changes, and cost inflation in any single country.
This guide is written for:
For most of the last two decades, sourcing exclusively from China made complete sense. The factories were excellent, pricing was competitive, and the infrastructure — from raw materials to Felixstowe — worked. The China-Plus-One conversation used to be something only large multinationals worried about.
That’s changed. Three separate pressures have converged in 2025–2026 to make diversification genuinely relevant for even mid-sized UK brands:
Chinese factory wages in coastal manufacturing hubs have risen substantially over the past decade. The Guangdong and Zhejiang factories that offered extraordinarily competitive pricing fifteen years ago now cost considerably more to run. For labour-intensive products like garments, footwear, and furniture, the price gap between China and Vietnam has narrowed — but the quality in Vietnam has caught up considerably too.
The UK-China relationship has been more strained in recent years. Whilst the current government has pursued a more constructive dialogue — and bilateral trade stood at approximately £87 billion in 2024 — UK businesses have learned from the American experience not to assume political goodwill translates to supply chain stability. Any deterioration could affect shipping lanes, HMRC classifications, or import restrictions with little warning.
When the US applied substantial tariffs on Chinese goods, it didn’t just affect American importers. It reshuffled global manufacturing investment and drove up lead times as factories juggled new order mixes. UK brands are not insulated from this volatility — particularly those selling into US or American-aligned markets.
Against that backdrop, the UK-Vietnam Free Trade Agreement (UKVFTA), which came into force on 1 January 2021, provides a genuine structural advantage for UK importers buying from Vietnam. The agreement immediately eliminated tariffs on 65% of UK-Vietnam trade, with the proportion rising towards 99.2% over the staging period. UK-Vietnam trade stood at approximately £9.6 billion in 2024 — a fraction of the £71 billion in UK-China imports recorded in the year to March 2025 — but the trajectory is firmly upward, and the UK brands leading the way are already building competitive advantages over those who start later.
Before you redirect any purchase orders, you need a clear-eyed view of where Vietnam genuinely excels and where China still leads. Here is the honest comparison:
| Factor | China | Vietnam |
|---|---|---|
| Manufacturing breadth | Extremely broad — almost any category | Strong in apparel, footwear, furniture, electronics assembly |
| Factory scale | Large to very large; some 10,000+ workers | Smaller to mid-size; typically 200–3,000 workers |
| Labour cost | Higher — coastal wages have risen significantly | Lower — particularly outside major cities |
| Raw material supply | Excellent — nearly all materials domestically available | Dependent on China for many fabrics and components |
| Sea freight to UK | ~25–30 days to Felixstowe/Southampton | ~30–35 days to Felixstowe/Southampton |
| Quality ceiling | Very high — world-class factories available | Good to excellent — improving rapidly |
| UK trade agreement | No preferential trade agreement | UKVFTA — meaningful duty reductions |
| IP protection risk | Present — requires careful NDA management | Lower risk for most product categories |
| English communication | Good in major export factories | Good in export-oriented factories |
| Geopolitical exposure | Higher — UK-China tensions a real risk | Lower — Vietnam-UK relations stable |
For apparel and garments, footwear, and basic furniture, Vietnamese factories are now genuinely competitive with China on both quality and price — and you get a duty advantage on top. If your products sit in these categories, Vietnam isn’t just an alternative; for some UK brands it’s becoming the preferred primary source.
Vietnam also wins on geopolitical risk. For brands that are sensitive to supply chain uncertainty — retailers with ESG commitments, or brands exposed to markets where China sourcing is commercially sensitive — having a Vietnamese manufacturing base is increasingly a commercial asset, not just a risk hedge.
Be honest about this too. China has a decisive advantage in complex electronics and precision manufacturing, where the ecosystem for components, specialised materials, and advanced tooling simply doesn’t exist in Vietnam yet. China also wins on factory scale (for very high volume orders), category breadth (China can make almost anything), and raw material availability.
The “Made in Vietnam” Raw Materials Reality
Many Vietnamese garment factories buy their fabrics from China. Many Vietnamese furniture factories use Chinese-made hardware. If your reason for diversifying is purely about reducing China exposure, you may be buying yourself less risk reduction than you think — and you may also be buying products that don’t qualify for UKVFTA preferential tariff rates. We cover this in Section 4.
Not everything should move to Vietnam. The China-Plus-One strategy works best when you identify the products where Vietnam has genuine manufacturing capability and where the economics stack up.
Garments, apparel and textiles — This is Vietnam’s manufacturing heartland. The country is one of the world’s largest garment exporters, with production clusters around Ho Chi Minh City, Hanoi, and Da Nang. Quality is good, certifications like OEKO-TEX and GOTS are available, and capabilities for both knit and woven garments are strong. For UK clothing brands importing from China, Vietnam is the logical next step.
Footwear — Vietnam has a well-established footwear industry that has served major international brands for decades. Athletic footwear, leather goods, and casual shoes are particular strengths. MOQs can be higher than garments, but the quality ceiling is solid and improving.
Furniture and homewares — Vietnam is one of the world’s major furniture exporters, with significant production in the south of the country. Solid wood furniture, upholstered pieces, and bamboo or rattan goods are particular strengths. The UKVFTA provides duty advantages on many furniture tariff lines.
Bags and accessories — Leather goods, fabric bags, and accessories are well-manufactured in Vietnam. Several UK fashion and lifestyle brands have successfully transitioned accessories production there.
Simple electronics assemblies and accessories — Cables, chargers, and basic electronic accessories can be manufactured in Vietnam, though complex electronics remain firmly in China’s domain.
Pro Tip: Start with your most labour-intensive product
When selecting your first Vietnam product, choose the one where labour is the biggest cost driver. Labour-intensive products (cut-and-sew garments, assembled footwear, hand-finished furniture) benefit most from Vietnam’s lower wage base and are the easiest categories to find capable Vietnamese suppliers in.
The UK-Vietnam Free Trade Agreement (UKVFTA) is one of the most commercially useful trade agreements in the UK’s post-Brexit portfolio for product importers. Under the agreement, which came into force on 1 January 2021, the UK immediately eliminated tariffs on 65% of Vietnamese exports to the UK, with the proportion rising to 99.2% over the staging period.
For UK brands importing labour-intensive goods like garments and footwear, this means you may pay significantly less in UK import duty than on equivalent Chinese-made goods — which are subject to the UK Global Tariff with no preferential treatment whatsoever.
To benefit from UKVFTA preferential tariff rates, you need to:
Your EORI number must be active, and your freight forwarder or customs broker needs to know to apply the preference claim on each shipment.
The duty savings are most meaningful in categories where the UK Global Tariff rate is relatively high. Garments and clothing accessories typically attract tariffs in the 12% range under the standard UK Global Tariff. Footwear can be higher. When you’re bringing in significant volumes, eliminating or drastically reducing that duty rate materially improves your landed cost and margin.
Critical Warning: The Rules of Origin Trap
This is where many UK importers come unstuck. The UKVFTA Rules of Origin require that goods be “sufficiently processed” in Vietnam to qualify. For garments, this typically means the fabric must be of Vietnamese or UK origin — not Chinese-made fabric that has simply been cut and sewn in Vietnam. This is known as the “double transformation” rule.
If your Vietnamese factory is buying fabric from China and making it into garments, your goods may not qualify for UKVFTA preferential rates, even though they were physically made in Vietnam. Before claiming preference, confirm in writing with your supplier where the fabric or main material comes from, and whether that origin satisfies the UKVFTA product-specific rules for your commodity code. Getting this wrong means HMRC can demand repayment of duty — potentially with interest and penalties.
Vietnam’s manufacturing geography is worth understanding before you start sending enquiries.
The south (Ho Chi Minh City, Dong Nai, Binh Duong) is where most of Vietnam’s export-oriented manufacturing is concentrated. If you’re sourcing garments, footwear, furniture, or accessories, most of your best factory options will be here. Logistics are strongest in the south, with HCMC port connecting efficiently to Felixstowe and Southampton.
The north has grown significantly as an electronics manufacturing base, with major international brands having invested heavily in facilities there. If you’re exploring electronics assembly or more technical manufacturing, the northern clusters may be where you find better matches.
Communication — English proficiency in export-oriented factories is generally good. Factory managers and sales teams typically speak English well, though technical specification accuracy can require more effort than with established Chinese factories. Always confirm specifications in writing and use detailed tech packs.
Factory size — Vietnamese factories are generally smaller than their Chinese counterparts. A mid-sized Vietnamese factory might employ 500–2,000 workers. This isn’t necessarily a disadvantage — smaller factories often give UK brands more attention — but it does mean your order might represent a larger proportion of their capacity, which cuts both ways.
Quality culture — Quality culture is improving in Vietnam, but it’s not as mature as in China’s large export factories. Having a third-party QC inspection — pre-shipment inspection as a minimum — is strongly recommended, particularly for your first several shipments from any Vietnamese factory.
Payment terms — Vietnamese factories typically work on T/T (telegraphic transfer) terms. A 30% deposit, 70% before shipment is standard for new relationships. Building to better terms takes time and volume.
The customs process for importing from Vietnam into the UK is broadly similar to importing from China, with some important additional steps around UKVFTA preference claims.
If you don’t already have one, you need an Economic Operator Registration and Identification (EORI) number to import commercially into the UK. Apply through HMRC — it’s free and typically issued within a few days.
All UK imports are declared through the Customs Declaration Service. If you use a freight forwarder or customs broker, they’ll handle this. If you’re new to importing, make sure your broker understands UKVFTA preference claims and has experience with Vietnamese origin goods.
Every product needs a commodity code (HS code / UK tariff code). The code determines your duty rate and any restrictions. Use HMRC’s Trade Tariff tool to find the correct code for your products. Misclassification can create compliance issues and duty reclaims — get it right from the first shipment.
If your products require UKCA (UK Conformity Assessed) marking — this applies to certain electrical equipment, toys, PPE, construction products, and other regulated categories — ensure your Vietnamese factory can support the testing and documentation requirements. UKCA is the post-Brexit replacement for CE marking in Great Britain.
If your products contain chemicals (dyes, coatings, surface treatments), UK REACH regulations may apply. Vietnam-manufactured goods are subject to the same UK chemical compliance requirements as any other country of origin.
Import VAT at 20% is payable on the customs value of goods imported into the UK. If you’re VAT-registered, you’ll reclaim this on your next VAT return via postponed VAT accounting. Factor the cash flow timing into your planning.
Before you commit to Vietnam trials, here is a realistic picture of what to plan for:
| Stage | Approximate Timeframe |
|---|---|
| Sampling (new product) | 3–8 weeks (often 2–3 rounds) |
| Pre-production (materials sourcing) | 2–4 weeks |
| Production | 4–8 weeks (category dependent) |
| Sea freight — HCMC/Hanoi to Felixstowe/Southampton | 28–35 days |
| UK customs clearance | 1–3 days (no holds assumed) |
| Total: factory to UK warehouse (sea) | 12–18 weeks from order placement |
| Air freight (HCMC to UK) | 5–7 days transit |
MOQs vary by product category and factory. As a general guide for Vietnam:
When comparing Vietnam versus China pricing, always account for: the factory ex-works price (may be similar to or lower in Vietnam for labour-intensive goods); sea freight (similar or marginally higher from Vietnam vs. China to UK); duty (potentially significantly lower from Vietnam via UKVFTA); sourcing agent or on-the-ground fees (Vietnam typically requires either physical presence or a good agent); sampling costs (new factory means new samples); and QC inspection costs (strongly recommended initially).
The total landed cost comparison — particularly including duty savings — often makes Vietnam genuinely competitive or better for qualifying products in the apparel, footwear, and furniture categories.
This is where most UK brands go wrong. They hear about Vietnam, get excited, and try to move everything too quickly. The result: disappointed Chinese factories who deprioritise them, Vietnamese factories who can’t handle the volume, and a supply chain that actually performs worse in the short term. Here’s the right approach.
Before approaching any Vietnamese factories, know exactly what you’re sourcing, in what volumes, from which Chinese factories, and at what landed cost. This is your baseline. Without it, you can’t make a meaningful comparison.
Using the framework from Section 3, identify one to three products that are strong candidates. These should be labour-intensive, in categories where Vietnamese capability is strong, and products where you can tolerate a 12–16 week transition lead time. Don’t start with your most complex or most critical product.
Place your first Vietnam order while China is still running. This gives you a safety net if the Vietnamese factory underperforms, and keeps your Chinese factory relationship warm. Once you’ve validated quality and reliability across two or three production runs, you can make informed decisions about volume allocation going forward.
Be transparent with your Chinese factories about your diversification strategy. The good ones will understand — many of them are diversifying themselves. Burning bridges is a mistake; you may want to return to China for specific products, or your Vietnamese supplier may experience disruption that requires a China fallback.
Successful dual-country sourcing typically takes 12–18 months to stabilise. Sampling, production trials, logistics optimisation, and customs processes all take time to bed in properly. Build this into your commercial planning and don’t try to rush it for the sake of a quarterly cost target.
At Epic Sourcing, we recommend a “30-70 rule” to start
Start by moving 30% of a product category’s volume to Vietnam whilst keeping 70% in China. After two or three successful production cycles, reassess. Some clients end up 50-50. Some find Vietnam is better for that category and shift further. Others discover that China makes more sense for specific products and rebalance. The dual-sourcing trial gives you real data to make that decision intelligently.
Based on what we’ve seen at Epic Sourcing, these are the errors that consistently cause problems:
If your only motivation is to find cheaper prices, you’re likely to end up with a Vietnamese factory that is cheap because it’s cutting corners on quality, materials, or labour standards. China-Plus-One done well is about resilience and strategic positioning — cost savings are a welcome by-product, not the primary goal.
As covered in Section 4, claiming UKVFTA preference on goods that don’t genuinely qualify is not just a mistake — it’s an HMRC compliance risk. Always verify the origin of key materials before claiming preference, and document it.
The UK is a long way from Vietnam. Many UK brands try to run Vietnam sourcing entirely remotely. This is possible for experienced sourcers with well-established factory relationships, but for a new factory relationship it’s a significant risk. Either visit yourself or commission a reliable on-the-ground agent to conduct a factory audit before you commit orders.
New country, new factory, new materials, new trims. Sampling a product in Vietnam from scratch typically takes 4–8 weeks and may require two or three rounds. Budget for this in your timeline. UK brands who assume Vietnamese factories will have samples ready as quickly as their established Chinese factories are frequently disappointed.
Dual-country operations add complexity. Start with one product or one category. Get the systems right — the incoterms, the customs processes, the QC workflow, the UKVFTA documentation — before scaling. A phased approach is slower but significantly less risky, and you’ll have real data to guide future decisions.
This is exactly the kind of project Epic Sourcing was built for. We’ve helped UK brands set up Vietnam sourcing operations alongside existing China production, manage dual-country quality control, and navigate UKVFTA documentation correctly.
We have an on-the-ground team in Vietnam who conduct factory audits, manage sampling, oversee production QC, and handle supplier communication in Vietnamese. For UK brands who can’t be physically present in Vietnam — which is almost all of them — this is the difference between successful sourcing and expensive mistakes.
White Label
£699 / project
Ideal for UK brands trialling Vietnam with an existing product design. Covers factory finding, sampling, QC inspection, and export documentation support.
Best for: First-time Vietnam sourcing trials where you want professional guidance.
White Label details →Private Label ★ Most Popular
£1,899 / project
Full sourcing brief, factory shortlisting, sampling rounds, production oversight, QC, and logistics coordination. Ideal for brands building a proper Vietnam supply chain.
Best for: Established UK brands developing or adapting products for Vietnamese manufacture.
Private Label details →Secret Label
£3,299 / project
End-to-end product development and factory management across both China and Vietnam, including UKVFTA documentation review and UK customs coordination.
Best for: Brands who want Epic Sourcing to fully manage their dual-country operation.
Secret Label details →Book a free consultation with TK and the Epic Sourcing UK team. We’ll map out a realistic plan for your business — which products to move first, which Vietnamese factories to consider, and how to claim UKVFTA duty savings correctly.
Book Your Free ConsultationFrom initial factory research to receiving your first quality-approved shipment at a UK port, most UK brands should plan for 9–14 months. This includes factory research and selection (4–8 weeks), sampling which often requires two to three rounds (4–10 weeks), pre-production and production (6–12 weeks), and sea freight transit (28–35 days). Brands who rush this timeline typically encounter quality issues or compliance problems that set them back further. Build the time into your planning from the outset — it’s not a quarter-by-quarter exercise.
Absolutely not — and the name “China-Plus-One” makes that clear. The strategy is to add Vietnam alongside your China sourcing, not to replace it. Many UK brands run 60–70% of their production from China and 30–40% from Vietnam indefinitely. The goal is resilience and optionality. You want the ability to flex volumes between countries based on cost, quality, and risk factors at any given time.
It depends entirely on the product category. For labour-intensive goods like garments, footwear, and some furniture, Vietnam is often cost-competitive with or cheaper than China at the factory gate — and when you add UKVFTA duty savings, the landed cost advantage can be meaningful. For complex manufacturing, precision electronics, or products requiring specialised materials, China is typically still more cost-effective. Always do a genuine like-for-like landed cost comparison — including duty, freight, agent fees, and QC — before drawing conclusions.
The Vietnamese factory landscape is less searchable than China’s. Alibaba has far fewer Vietnamese listings, and what’s there is more variable in quality. The most reliable approaches are: using a sourcing agent with on-the-ground Vietnam presence (like Epic Sourcing), attending the Vietnam Manufacturing Expo or Vietnam International Sourcing Fair, or getting referrals from other UK brands who’ve sourced there. Cold-contacting factories from online listings without due diligence carries more risk in Vietnam than in China, where the vetting infrastructure (Alibaba Gold Supplier, trade shows, factory audits) is more developed.
Yes — this is precisely the kind of multi-country programme we’re set up to run. We have teams in both China and Vietnam, and we can manage sourcing, quality control, and logistics coordination across both simultaneously. Many of our UK clients are on this exact programme. The Secret Label service (£3,299 per project) is designed for this scenario, covering end-to-end management of dual-country production with UK customs support included.
Talk to the Epic Sourcing UK team today. We’ll map out a realistic China-Plus-One plan for your business — which products to move first, which Vietnamese factories to consider, and how to claim UKVFTA duty savings correctly.
No obligation. No jargon. Just a practical conversation about your sourcing options.
