Let's be frank: relying entirely on one country for your supply chain felt fine until it didn't. Between COVID-19 factory shutdowns, US-China trade tariff escalations, and the occasional Suez Canal blockage, UK businesses with all their manufacturing eggs in one Chinese basket have had a rough few years.
The China-Plus-One strategy isn't a trendy buzzword — it's a structural response to real supply chain fragility. More UK importers are now splitting production between China and a secondary source (most commonly Vietnam, but also India, Bangladesh, Thailand, or Mexico) to reduce concentration risk whilst keeping costs competitive.
This guide is for UK business owners, product brand managers, and procurement leads who are sourcing from China today and want to understand whether, how, and where to add a second manufacturing country to their supply chain. We'll cover the strategic rationale, the compliance implications (UKCA, UKVFTA, HMRC customs), the cost reality, and exactly how Epic Sourcing can help you execute this.
At Epic Sourcing, we've helped UK businesses source from both China and Vietnam for years. We've seen the wins and the mistakes. What follows is the honest version — not the sales brochure.
China-Plus-One (C+1) is a supply chain diversification strategy where businesses maintain manufacturing in China whilst establishing a secondary production base in at least one other country. The goal is to reduce concentration risk, avoid tariff exposure, and create supply chain resilience — without abandoning China's manufacturing ecosystem entirely.
China remains the world's dominant manufacturing nation. It produces an estimated 28% of global manufactured goods and is almost impossible to replicate on cost, infrastructure, and capability at scale. If you're importing consumer goods, electronics, homeware, clothing, or industrial components, China almost certainly plays a role in your supply chain — whether you see it or not.
But the risk landscape has changed materially over the last five years, and UK importers are feeling it acutely.
Cast your mind back: COVID-19 shuttered Chinese factories for months in 2020 and triggered rolling closures through 2022. The container shipping crisis that followed saw freight rates from China to Felixstowe spike from roughly £1,000 per 20ft container to over £10,000. The Suez Canal blockage in March 2021 disrupted over 10% of global trade for nearly a week. Chinese power rationing in 2021 forced production cuts across Guangdong and other manufacturing provinces.
Any one of these events, on its own, would be manageable with a diversified supply chain. For businesses with 100% China dependency, each felt like a crisis.
UK-China trade reached approximately £87 billion in 2024, with UK imports from China running at around £71 billion for the year to March 2025. That's a significant and growing import dependency — and it comes with political risk that wasn't present five years ago.
UK trade policy has shifted. The UKCA mark replaced CE marking for most product categories. New anti-dumping duties have been applied to Chinese steel. The UK's relationship with China has become more complex diplomatically, creating regulatory uncertainty for businesses sourcing high-tech or electronics components. Meanwhile, the UK-Vietnam Free Trade Agreement (UKVFTA) — which came into effect in January 2021 — has opened a genuinely competitive alternative with meaningful tariff advantages.
This is the most important point in this entire guide: China-Plus-One is not about abandoning China. The Chinese manufacturing ecosystem — the supply chain depth, the tooling expertise, the component availability, the Alibaba-level supplier network — doesn't exist anywhere else in the world at that scale. What C+1 is about is not having all your production in one country.
For most UK businesses, the practical implementation looks like this: keep your core, high-volume, highly cost-sensitive production in China. Shift 20–40% of production (or a specific product line, or a category) to Vietnam, India, or another secondary market. Use that secondary market to build redundancy, capture tariff savings, and test supplier capabilities.
Most UK businesses that have successfully implemented China-Plus-One didn't do it in one leap. They started by moving one product line, or one component, to a second country. That's almost always the right approach — don't try to rebuild your entire supply chain overnight.
Vietnam is by far the most common "plus-one" choice for UK businesses, and for good reason. It has a manufacturing base that's genuinely competitive across clothing and textiles, footwear, furniture, electronics assembly, bags and accessories, and various industrial components. UK-Vietnam trade reached approximately £9.6 billion in 2024, and that figure is growing year on year as more UK businesses shift capacity.
But Vietnam is not China. Understanding the differences is essential before you commit anything to a Vietnamese factory.
| Factor | China | Vietnam | UK Importer Impact |
|---|---|---|---|
| Labour Cost | £3–£5/hr (coastal factories) | £1.50–£2.50/hr | Vietnam 30–50% cheaper on labour-intensive goods |
| MOQ | Low–Medium (can be 100–500 units) | Medium–High (500–2,000 units typical) | China more flexible for smaller initial orders |
| Sea Freight to UK | ~25–30 days to Felixstowe | ~28–35 days to Felixstowe | Similar transit; Vietnam slightly longer |
| UKVFTA Duty Rate | Standard UK Global Tariff applies | 0% on most goods (UKVFTA) | Significant saving — typically 6–12% duty eliminated |
| Manufacturing Depth | Exceptional — all product categories | Strong in textiles, furniture, electronics assembly | Category matters — check before assuming |
| Raw Material Supply | Deep domestic supply chain | Often imports from China (impacts RoO) | Rules of Origin for UKVFTA need checking |
| IP Protection | Improving but still a concern | Improving; generally lower IP risk | NDA + trade mark registration in both countries recommended |
| English Proficiency | Good in export-focused factories | Variable — often needs local support | Sourcing agent on the ground recommended |
| UKCA Compliance | Factory capability varies widely | Factory capability varies widely | Third-party testing required for regulated goods |
| Supplier Transparency | Audit infrastructure well-established | Developing; fewer audit firms on the ground | Due diligence even more important in Vietnam |
The headline is: Vietnam wins on labour cost and tariffs, China wins on supply chain depth and flexibility. For the right product category — textiles, garments, bags, furniture, some electronics assembly — Vietnam is genuinely compelling. For complex manufactured goods requiring a deep component supply chain, China remains the only realistic primary source.
Vietnam gets most of the attention, but it's not the only option. Depending on your product category, one of these markets may be a better fit for your China-Plus-One secondary source.
India is having a moment. With a government actively courting foreign manufacturers through its Production Linked Incentive (PLI) schemes, strong English-language skills, a large and growing industrial base, and improving logistics infrastructure, India is becoming a serious alternative for UK businesses. India is particularly strong in pharmaceuticals, textiles, leather goods, auto components, and jewellery. UK-India trade is also in active CETA (Comprehensive Economic and Trade Agreement) negotiations, which — if concluded — would bring tariff benefits similar to UKVFTA.
For clothing and apparel, Bangladesh is one of the most price-competitive manufacturing nations in the world. The ready-made garments (RMG) sector is exceptionally well-developed. Bangladesh currently benefits from UK GSP (Generalised Scheme of Preferences) status, which provides zero-duty access to the UK market for most exports. If you're sourcing garments and haven't looked at Bangladesh, you're almost certainly leaving money on the table.
Thailand has established manufacturing clusters in automotive, electronics, food processing, and plastics. It tends to be slightly more expensive than Vietnam but offers higher quality consistency and better infrastructure. UK imports from Thailand sit outside both UKVFTA and CPTPP tariff benefits for most categories, so the duty saving angle is weaker — but cost and quality may still make it worthwhile.
More relevant for UK businesses with US market exposure. Mexico's proximity to the US and its USMCA membership makes it ideal for products where you need both UK and US supply chains. Lead times to the UK are longer (~35–45 days by sea) and costs are comparable to Vietnam, but geographic diversification away from Asia entirely may be strategically valuable for some businesses.
When you source from Vietnam or India to claim UKVFTA or GSP tariff benefits, the goods must originate in that country. If your Vietnamese factory is using Chinese fabric to make garments, those garments may not qualify as Vietnamese origin under UKVFTA Rules of Origin — and you won't get the zero-duty rate. Always check Rules of Origin before assuming a tariff saving.
This section is where many UK importers implementing C+1 strategies come unstuck. The compliance landscape is more complex when you're running two supply chain streams, and the UK-specific requirements are non-trivial.
Since January 2025, UKCA (UK Conformity Assessed) marking has become mandatory for most regulated products sold in England, Scotland, and Wales (Northern Ireland has different rules under the Windsor Framework). UKCA replaces CE marking for UK market access and applies to products including electronics, personal protective equipment, toys, machinery, and many other regulated categories.
The critical point for C+1 is this: UKCA compliance must be achieved per manufacturing location, not per product design. If you're producing the same product in both China and Vietnam, both production lines must independently meet UKCA requirements. You cannot simply transfer a CE certificate from your Chinese factory and apply it to your Vietnamese goods without re-testing and re-certification.
Third-party testing through a UK-approved conformity assessment body (CAB) is required for most product categories. Budget for this when you set up a new factory in a secondary market — it typically costs £1,500–£8,000 depending on the product category and the tests required.
The UK-Vietnam Free Trade Agreement came into force on 1 January 2021. It is one of the most commercially significant trade agreements the UK has signed post-Brexit, and it's genuinely underused by UK importers.
Under UKVFTA, 65% of UK tariff lines on Vietnamese goods were eliminated immediately on entry into force, with the rest phasing down to 99.2% elimination over the agreement's transition period. For practical purposes, most consumer goods, textiles, furniture, footwear, and electronics assembly products that UK businesses typically source from Vietnam now attract 0% or very low import duty.
To claim UKVFTA preferential duty rates, you need:
All UK imports require customs declaration through HMRC's Customs Declaration Service. If you're moving from one-country sourcing to two-country sourcing, you'll need to ensure your customs broker or freight forwarder is set up to handle declarations from both countries, and is aware of the different duty rates that apply to each shipment.
A practical tip: when you start shipping from Vietnam for the first time, have your freight forwarder apply for UKVFTA preferential duty treatment on the first shipment and get HMRC confirmation. This establishes the precedent and gives you documented proof that your goods qualify — useful if your declarations are ever audited.
Do not assume your existing UKCA/CE certificates transfer to a new factory. Each manufacturing site must be independently assessed. UK importers bear legal responsibility for the compliance of products they place on the UK market — the liability doesn't sit with the factory.
Do not claim UKVFTA tariff preferences without confirming Rules of Origin. HMRC can and does conduct post-clearance audits. If you've been claiming preferential duty rates on goods that don't qualify, the penalty — including back-duty and interest — can be substantial.
The UK formally joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in December 2024. This brings the UK into a trade bloc with 11 Pacific nations, including Vietnam, Japan, Australia, Canada, and Mexico. CPTPP's Rules of Origin provisions are cumulative — meaning inputs from any CPTPP member can count towards origin requirements — which may make it easier to qualify for preferential duty rates on Vietnam-sourced goods compared to UKVFTA alone. CPTPP benefits are still being phased in, so check the current tariff schedule on the UK Trade Tariff before making decisions.
Let's talk numbers. One of the most common mistakes UK businesses make when evaluating China-Plus-One is comparing only the factory ex-works price. The landed cost — what the goods cost once they're at your UK warehouse — is the only number that actually matters for margin calculations.
| Cost Component | China (typical) | Vietnam (typical) | Notes |
|---|---|---|---|
| Ex-Works (labour-intensive goods) | £ [baseline] | £ −25% to −40% | Gap widest on garments, textiles, bags |
| Sea Freight (LCL, FCL) | £800–£2,500 per 20ft container | £900–£2,800 per 20ft container | Vietnam slightly higher; fewer direct services |
| Import Duty (average apparel) | 12% UK Global Tariff | 0% (UKVFTA) | 12% saving on dutiable value — significant |
| Import Duty (average furniture) | 5.6% UK Global Tariff | 0% (UKVFTA) | 5.6% saving vs. standard rate |
| VAT on Import | 20% (reclaimable if VAT registered) | 20% (reclaimable if VAT registered) | Same — cash flow consideration only |
| Customs Clearance | £120–£350 per shipment | £120–£350 per shipment | Same — broker fees apply either way |
| Port of Entry | Felixstowe, Southampton, London Gateway | Felixstowe, Southampton (transshipment via Singapore) | Vietnam adds ~3–5 days via transshipment |
| QC and Compliance | £300–£2,000 per inspection | £300–£2,000 per inspection | Non-negotiable — do this in both countries |
Here's the practical conclusion: on labour-intensive, regulated products (garments, bags, textiles), the combination of lower Vietnam labour cost and UKVFTA zero-duty can produce a landed cost advantage of 15–30% versus China for qualifying goods. That's material enough to justify a meaningful portion of your production shifting.
If you're used to working with Chinese factories, Vietnam's MOQ structure may come as a surprise. Vietnamese factories — particularly in garments and furniture — tend to require higher minimum order quantities than their Chinese counterparts. Where a Chinese factory might accept a 300-unit trial order, a Vietnamese factory for the same product may want 1,000–3,000 units before they'll prioritise your account.
This isn't a deal-breaker, but it does mean you'll typically need to be further along in product validation before you move production to Vietnam. Don't expect to run small trial orders the same way you might in China. Budget accordingly — and negotiate hard on MOQs with the first order.
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Our team has run sourcing projects in both China and Vietnam for UK businesses. Book a free 30-minute call and we'll tell you honestly whether C+1 makes sense for your product.
Book Your Free ConsultationStrategy without execution is just a presentation. Here's how UK businesses actually make China-Plus-One work in practice.
Not every product in your range is a C+1 candidate. Start by categorising your products by three factors: labour intensity (is the product cost driven by manufacturing labour?), tariff exposure (does the product attract meaningful UK import duty from China?), and supply chain simplicity (does the product have a simple enough component supply chain to be replicated elsewhere?).
Products that score high on all three — labour-intensive, tariff-exposed, and supply-chain-simple — are your best C+1 candidates. Garments, bags, textile accessories, simple furniture, wicker and rattan, footwear, and basic electronics assembly all fit this profile for Vietnam. More complex engineered goods, consumer electronics, or anything requiring specialist Chinese tooling or components are harder to move.
Before you speak to a single factory in your secondary market, work out what UKCA compliance, product safety testing, and documentation you'll need. The last thing you want is to spend three months qualifying a Vietnamese factory and then discover your product requires a test that no Vietnamese lab can perform — you'd need to ship samples to Germany or the UK anyway.
Make a compliance checklist: What UK product standards apply? What testing is required? What documentation does your customs broker need at UK port of entry? Does your product trigger any specific UK Conformity Assessed requirements?
Finding verified, capable factories in Vietnam (or your chosen C+1 market) is harder than in China. The Alibaba-equivalent infrastructure doesn't exist in Vietnam. Trade shows — Vietnam Manufacturing Expo, VINACAS (Vietnam Cashew Association), Saigon Tex — are useful but require on-the-ground presence.
This is where a sourcing agent with in-country capability is genuinely worth the fee. At Epic Sourcing, we have sourcing teams operating in both China and Vietnam. We can identify, audit, and verify factories in Vietnam directly — something a UK-based business trying to do it remotely via email simply cannot replicate reliably.
Run the full due diligence process on your C+1 factory the same way you would on a new Chinese supplier — possibly more rigorously, because you have less experience in the market. Get samples made, test them against your UKCA requirements, conduct a factory audit (or hire a third-party firm to do it), review their financial stability, and check their export track record.
Do not commit your first production order to a factory you've never audited. This sounds obvious, but UK businesses under pressure to diversify quickly sometimes skip steps and regret it.
For your first season or two, run China and your new secondary market in parallel. Don't pull production from China until your C+1 supplier has proven they can consistently hit your quality, MOQ, lead time, and documentation requirements. The goal is to have a functioning second source — not to remove your first source before the second one is reliable.
If you're sourcing from Vietnam, make sure you're actually claiming UKVFTA preferential duty rates. Brief your customs broker or freight forwarder specifically on this. They should be requesting a EUR.1 Movement Certificate or supplier declaration with each shipment. If they're not doing this, you're paying duty you don't need to pay.
We've seen enough UK businesses attempt C+1 — both well and badly — to compile a fairly comprehensive list of what goes wrong.
Vietnam's labour cost advantage is real but product-specific. For electronics assembly or tooled plastic products, the difference between China and Vietnam is much smaller than for garments. Do a proper landed cost comparison including freight, duty, compliance, and MOQ implications before assuming Vietnam will be cheaper for your specific product.
This one costs real money. If your Vietnamese factory sources its raw materials from China, the finished goods may not qualify as Vietnamese origin under UKVFTA. "Made in Vietnam" on a label is not the same as qualifying for UKVFTA preferential treatment. Get formal confirmation from your supplier and verify with your customs broker before claiming the reduced duty rate.
C+1 takes time. Finding the right factory, auditing it, getting samples made and tested, negotiating terms, placing a first order, and proving consistent quality typically takes 6–12 months from decision to reliable dual-supply-chain operation. Businesses that try to do this in 8 weeks usually end up with poor quality, late deliveries, or both.
Running two supply chains in two countries in two languages (Mandarin and Vietnamese) simultaneously is genuinely more complex than running one. Your operations team will need to manage different communication styles, time zones, production calendars, and documentation formats. Don't underestimate this overhead — or the value of having someone on the ground in both countries.
If you've already done UKCA testing on your China-manufactured product and then start manufacturing the same product in Vietnam, you need new UKCA test reports for the Vietnam production. The test follows the manufacturing location, not the product design. This is a compliance obligation, not optional.
Epic Sourcing has been running sourcing projects for UK businesses in both China and Vietnam since before "China-Plus-One" became a strategy category. We have sourcing teams on the ground in both countries, direct factory relationships, and compliance expertise specific to UK market requirements.
Here's what we can do for you, depending on where you are in your C+1 journey:
Hot Source
£699
one-time project fee
Ideal if you want to source an existing product from China or Vietnam without product development. We find verified suppliers, get quotes, and manage the process for you.
Most Popular
£1,899
one-time project fee
Best fit for C+1 implementation: we source your product from a new secondary market, verify supplier capability, and manage the full qualification process.
Full Service
£3,299
one-time project fee
Full product development and dual-market sourcing with IP protection baked in from the start.
Due Diligence
Custom
priced per factory
Already found a factory in Vietnam? Our on-the-ground team conducts in-person audits and compliance reviews before you commit.
No — and it's worth being honest about this. China-Plus-One makes most sense for UK businesses with meaningful production volumes (typically £200,000+ annually in COGS), products in categories with clear C+1 capability in Vietnam or another secondary market, and a genuine concern about supply chain concentration risk or tariff exposure. If you're a startup sourcing 500 units of a product for the first time, the complexity of running a dual-country supply chain will likely outweigh the benefits at your current scale. Get established in China first, prove your product, and then consider diversification when you're at volume.
No. UKVFTA preferential tariff rates apply to goods that originate in Vietnam under the agreement's Rules of Origin. If a product is manufactured in Vietnam using a significant proportion of Chinese components or raw materials, it may not qualify as Vietnamese origin and therefore won't receive preferential duty treatment. The specific Rules of Origin vary by product category — textiles have different rules to electronics, for example. Always check the specific Rules of Origin for your commodity code before assuming UKVFTA will apply.
Realistically, plan for 6–12 months from the decision to source from Vietnam to having a reliable, audited factory producing compliant goods for the UK market. The timeline includes: factory identification and shortlisting (1–2 months), initial contact and negotiation (1 month), factory audit and verification (2–4 weeks), sample development and testing (2–3 months), UKCA compliance testing if required (4–8 weeks), first production order and quality inspection (6–10 weeks). Trying to compress this significantly usually results in quality problems or missed compliance requirements.
Yes, and you probably should. Using one experienced customs broker for both supply chain streams ensures consistency in your commodity code declarations, correct application of UKVFTA preferential origin claims, and a single point of contact for any HMRC queries. Make sure your broker is specifically briefed on the UKVFTA and understands the documentation requirements for preferential origin claims. Not all UK customs brokers are well-versed in UKVFTA procedures — it's worth asking before you commit.
Vietnam has genuine manufacturing strength in garments, knitwear, and textiles; footwear (particularly sports and casual); furniture (rattan, bamboo, and solid wood); bags, backpacks, and leather accessories; electronics assembly for consumer devices; and processed food and agricultural products. Vietnam is less suitable for complex engineered goods, precision components, or products requiring a deep domestic component supply chain — these remain more competitive in China.
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Whether you're just starting to explore diversification or ready to qualify a Vietnamese factory, our team is on the ground in both China and Vietnam. Book a free 30-minute call and we'll give you an honest assessment of whether C+1 makes sense for your product range.
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