More UK businesses are adding Vietnam to their sourcing mix alongside China. Here's what the China-Plus-One strategy actually means in practice — and whether it makes sense for your business in 2026.
In summary: The China-Plus-One strategy — maintaining China as your primary sourcing base while adding a second manufacturing country — is rapidly gaining traction among UK SMEs in 2026. Vietnam has emerged as the leading “+1”, offering labour costs 40–60% lower than comparable Chinese coastal factories, strong capabilities in textiles, footwear, electronics, and furniture, and a UK trade agreement (UKVFTA) that reduces import duties on many goods. This strategy is not about replacing China, but about building supply chain resilience without sacrificing quality or manufacturing expertise.
There's a phrase that keeps coming up in my conversations with UK business owners at the moment. Not "supply chain disruption" — though that does come up, frequently — but something quieter and more deliberate: "We're thinking about adding Vietnam."
It's a phrase that would have sounded unusual five or six years ago. Back then, China was the unquestioned default for UK businesses sourcing manufactured goods from Asia. And to be fair, it still is, for many product categories. China's manufacturing ecosystem — the suppliers, the tooling capabilities, the logistics networks, the raw material supply chains — remains without equal.
But the world has changed. COVID-19 exposed the fragility of single-country supply chains. US tariffs on Chinese goods reshaped global trading patterns. Labour costs in coastal Chinese manufacturing provinces have risen steadily. And a new question has entered the UK importer's vocabulary: what's our Plan B?
Enter Vietnam. And the strategy known — with characteristic lack of poetry — as China-Plus-One.
China-Plus-One is a supply chain diversification approach where businesses maintain their primary manufacturing relationships in China while establishing a secondary sourcing base in another country. The "+1" is most commonly Vietnam, though Thailand, India, Bangladesh, and Indonesia feature depending on product category.
The key word is "plus" — this isn't about abandoning China. It's about building redundancy into your supply chain so that if one source is disrupted (by tariffs, factory shutdowns, shipping bottlenecks, or regulatory changes), you have an alternative you've already tested and trust.
For UK SMEs, this is a relatively new concept. But for global brands, China-Plus-One has been standard operating procedure for several years. Apple, Samsung, Nike, and most major retailers have moved significant production capacity to Vietnam over the past decade. The infrastructure, quality, and reliability are now established enough that smaller UK businesses can benefit from the same approach.
Several factors have converged to make Vietnam particularly attractive for UK importers right now.
Labour costs. Vietnam's manufacturing wage rates remain 40–60% lower than equivalent Chinese coastal factory provinces. For labour-intensive products like garments, footwear, and assembled electronics, this translates directly into better factory gate pricing.
The UK-Vietnam Free Trade Agreement (UKVFTA). This agreement came into force in January 2021 and has been delivering real benefits to UK importers ever since. Under UKVFTA, import duties on many goods manufactured in Vietnam are being progressively reduced toward zero. Textiles, footwear, and some electronics categories have particularly strong tariff advantages — real money off your landed cost.
Manufacturing capability. Vietnam has made enormous strides over the past decade. In textiles, Vietnam is already one of the world's top three exporters. In furniture, electronics assembly, and footwear, Vietnamese factories are producing goods that match Chinese quality at competitive prices.
Supply chain resilience. Having a tested second source means you're not entirely exposed if your Chinese factory has a bad quarter, a shutdown, or capacity issues at the wrong moment. UK businesses that diversified to Vietnam before COVID were significantly better placed when Chinese factories went dark in early 2020.
Sourcing Hack #1: Don't start your Vietnam sourcing journey with your most complex products. Begin with a category where Vietnamese factories are already proven — garments, basic electronics assembly, packaging, or furniture — and use that relationship to learn how the country operates before bringing across more sophisticated product development. Think of it as a pilot programme, not a wholesale migration.
Vietnam's manufacturing strengths are quite specific. Categories where you'll find strong factory capacity, competitive pricing, and established quality infrastructure include: garments, knitwear, and textiles (Vietnam is world-class here), footwear and bags, wooden furniture and homewares, electronics assembly and wire harnesses, and eco-friendly packaging materials.
Categories where China still clearly leads include: complex electronics and components, industrial machinery, chemicals and plastics, and most technical products requiring deep, established supplier ecosystems. Vietnam's manufacturing base, while impressive, doesn't yet have the breadth and depth of China's for complex goods.
This is relevant context for the white label vs private label decision too. White label products — standardised goods you brand and sell — are often well-suited to Vietnam sourcing. Private label product development requiring complex manufacturing usually still points to China.
Sourcing Hack #2: Ask your Chinese supplier if they have a Vietnam operation or partner. Many larger Chinese manufacturers have established Vietnamese factories specifically to benefit from lower labour costs and preferential trade agreements. This means you can sometimes access Vietnam-manufactured goods through a supplier relationship you already trust — with far less discovery risk.
Let me be honest about the differences, because the "just go to Vietnam" narrative sometimes oversimplifies things.
Lead times are broadly similar for sea freight — Vietnamese ports (Ho Chi Minh City, Haiphong) typically see 28–35 days to UK ports, comparable to China. Air freight from Vietnam can be slightly more expensive due to fewer direct routes.
Minimum order quantities can be higher than expected. Vietnamese factories, particularly in the garment sector, sometimes require 500–1,000 units for custom orders. UK SMEs accustomed to Chinese factories running 100–200-unit samples may need to adjust their expectations.
Communication varies. Vietnam has a strong English-speaking manufacturing workforce in major cities, but regional variations exist. Having a sourcing agent or team member with Vietnamese language capability and on-the-ground presence is a significant advantage for smaller buyers.
Quality consistency has improved dramatically, but quality management infrastructure is, in some sectors, less mature than China's. This makes factory auditing and quality control checks even more important than in China, not less.
Our guide to finding reliable manufacturers was written with China in mind, but the vetting principles apply equally to Vietnam. The questions to ask, the documentation to request, and the red flags to watch for are almost identical.
Sourcing Hack #3: Don't use Alibaba to source from Vietnam. Alibaba is overwhelmingly China-centric. Vietnam's manufacturing ecosystem is better accessed through trade show attendance (Vietnam Expo, HCMC Expo), trade directories like Vietnam's Ministry of Industry and Trade portal, or — most reliably — a specialist sourcing agent with an established Vietnam presence. The discovery process is genuinely different. Plan for it.
The UKVFTA is genuinely one of the most underused advantages available to UK importers right now. The agreement commits both countries to a phased tariff elimination schedule, meaning import duties on a wide range of goods are reducing year-on-year toward zero.
For UK importers, the most significant tariff benefits apply to garments and textiles (historically subject to 12% EU/UK duty — being progressively reduced under UKVFTA), footwear (similarly high duties coming down), and certain electronics and electrical equipment. Furniture and wooden goods also benefit from preferential rates.
To claim the preferential UKVFTA rate, your goods must meet Rules of Origin requirements — they must be substantially manufactured in Vietnam, not merely assembled from Chinese components. Simply having a product assembled in Vietnam doesn't automatically qualify it for preferential tariffs. This is important to understand before committing to Vietnam as a source.
The UKVFTA advantage connects directly to private label product development strategy — when you're designing products specifically for Vietnam manufacturing, building in Rules of Origin compliance from day one is far easier than retrofitting it later.
Sourcing Hack #4: Request a Certificate of Origin (Form VK) from your Vietnamese manufacturer for every shipment. This is the document you present to HMRC to claim the preferential UKVFTA duty rate. Factories familiar with UK exports know exactly what this is. If your factory doesn't know what a UKVFTA Certificate of Origin is, that tells you something important about their UK export experience.
The practical steps are logical once you break them down. Start by identifying which of your current (or planned) products align with Vietnam's manufacturing strengths. Research the tariff implications for your product categories under UKVFTA. Then begin supplier discovery — ideally through a sourcing agent with Vietnam presence, or through direct trade show attendance.
The critical step most UK SMEs skip is factory auditing. Just as you'd verify a Chinese factory before committing to production, a Vietnamese factory deserves the same scrutiny: capacity assessment, quality management systems review, worker welfare standards, and financial stability checks. Don't skip this because you're excited about the cost savings. The savings disappear very quickly if you end up with a quality problem two months into a project.
Epic Sourcing has team members on the ground in Vietnam specifically for this purpose. Whether you want to test the waters with a small first order or make a more substantial commitment to Vietnam sourcing, we can identify, vet, and manage factories across the product categories we specialise in. Our White Label, Private Label, and Secret Label service tiers apply to Vietnam sourcing as much as to China.
For further reading on the fundamentals of working with Asian manufacturers, our piece on the role of sourcing agents in China covers the principles that apply across the region. And for a breakdown of the full landed cost picture when importing from Asia, our complete guide to importing from China to the UK is the place to start.
If you're sourcing electronics and thinking about which country to use for which product, our companion post on sourcing smart security cameras from China is a useful case study in why China and Vietnam each have their role in a diversified strategy.
China-Plus-One is a supply chain approach where businesses keep China as their primary manufacturing source while establishing sourcing relationships in one additional country. Vietnam is the most popular "+1" for UK importers due to its manufacturing capabilities, lower labour costs, and preferential trade agreement with the UK. The strategy builds resilience without abandoning China's unmatched manufacturing ecosystem.
For labour-intensive manufacturing, yes — typically 40–60% cheaper on labour costs. However, raw material costs can be higher in Vietnam because the country imports significant industrial inputs from China. The net price difference depends heavily on product category. Textiles, garments, and footwear see the clearest cost advantage. Complex electronics or precision manufacturing often remains cheaper in China due to the depth of the supplier ecosystem.
The UK-Vietnam Free Trade Agreement (UKVFTA) provides progressively reducing import tariffs on many goods manufactured in Vietnam and imported to the UK. For eligible goods meeting Rules of Origin requirements, duties can be significantly lower — sometimes zero — compared to importing the same product from China. Categories with the strongest benefit include textiles, footwear, and certain electronics. Goods must be substantially manufactured in Vietnam to qualify.
Yes, though the approach needs to be strategic. Rather than splitting every order across two countries, most UK SMEs find it more practical to source different product categories from each — perhaps garments from Vietnam and electronics from China. Starting with a test order in Vietnam for one SKU is a low-risk way to build a second supply relationship without overextending operationally or tying up too much working capital.
Not strictly required, but strongly recommended. Vietnam's factory ecosystem is less accessible through marketplace platforms like Alibaba. A sourcing agent with Vietnam presence — including language capability and existing factory relationships — dramatically reduces the time and risk of establishing a new sourcing base. This is especially true for the first two or three factory relationships, where getting things wrong is most costly.
The China-Plus-One conversation is happening across UK boardrooms and kitchen-table businesses alike. The businesses getting ahead of it — testing Vietnam now, building relationships, learning the landscape — will have a distinct competitive advantage when the next supply chain disruption hits. And in my experience, it's not a question of if that disruption will happen. Only when.
If you're curious about what adding Vietnam to your sourcing mix could look like for your specific products, book a call with the Epic Sourcing team. Or email us at hello@epicsourcing.co.uk. We're sourcing from both China and Vietnam every week — we can give you a straight answer on where your product fits best.
TK Wang, Founder & Director @ Epic Sourcing
