SaigonTex Insights: Why Vietnam Garment Factories Are Upgrading to Smart Tech

Vietnam’s textile and garment industry remains one of the country’s key economic sectors and an important part of the global apparel supply chain.

In 2023, the industry faced strong pressure from slower global demand, inflation, inventory adjustments, and weaker purchasing power in key export markets. However, the market began to recover in 2024. Vietnam’s textile and garment export turnover reached around USD 44 billion in 2024, up about 11% from 2023, supported by order recovery, market diversification, and technology upgrades.

For Vietnam garment factories, the question is no longer only whether orders will return. The more important question is whether factories are ready to compete when orders come back.

Factories need higher efficiency, more stable quality, better production visibility, and stronger sustainability capability.

SaigonTex 2024 showed this transition clearly. Some factories were looking for equipment upgrades. Some were restructuring or changing ownership. Some investors were entering Vietnam and trying to transform existing factories. Others were still choosing low-cost machines as a short-term solution.

Low-cost equipment may reduce initial purchasing pressure. But over the long term, Vietnam’s garment competitiveness will depend less on buying cheaper machines and more on digital transformation, smart equipment, and reliable suppliers.

Three Industry Signals from SaigonTex 2024

1. Sewing Machines Remain the Core of Garment Production

Sewing machines still represent the largest equipment category in garment factories. At SaigonTex, brands such as Jack, Juki, Brother, Zoje, and other sewing machine suppliers continued to dominate much of the exhibition floor.

This shows that Vietnam’s garment industry remains strongly based on high-volume garment production.

However, it also reveals a limitation. If factories invest only in sewing lines but ignore fabric preparation, inspection, spreading, and cutting, overall efficiency may still be restricted.

Production bottlenecks do not always happen at the sewing line. Fabric inspection inconsistency, unclear spreading records, low cutting room efficiency, and incomplete quality data can all create pressure for downstream production.

2. AI Inspection, Smart Spreading, and Dashboards Are Gaining Attention

Another trend at SaigonTex 2024 was the growing interest in smart equipment, including AI fabric inspection, cloud-connected automatic spreading machines, digital dashboards, and machine data collection.

The value of smart spreading is not only that the machine spreads fabric automatically. Its greater value is that spreading data can be digitized.

In many factories, operators still record fabric length, layers, production output, and machine status manually. This creates risks of missing or incorrect data. With IoT-connected spreading equipment, managers can monitor machine operation, production output, and cutting room status more clearly.

AI fabric inspection can also help textile and garment factories standardize quality inspection. Manual inspection depends heavily on inspector experience, and different inspectors may judge fabric defects differently. AI inspection can reduce subjective differences and convert defect location, images, and classifications into traceable data that can support spreading and cutting decisions.

3. Investors Still See Long-Term Value in Vietnam

The exhibition also showed continued interest from Korean and other foreign investors. Some investors acquired local textile or garment factories during or after the pandemic and are now looking to upgrade equipment and improve management.

This shows that Vietnam has not lost its attractiveness as a production base.

However, investors are increasingly looking beyond low labor cost. They want factories that can upgrade, manage production data, maintain quality consistency, and meet brand expectations for sustainability and transparency.

Three Challenges Affecting Vietnam’s Garment Competitiveness

1. Demand Volatility and Economic Pressure

Vietnam’s garment export decline in 2023 was largely connected to weaker global demand, cautious consumer spending, inflation, and inventory adjustment in major export markets such as the U.S. and Europe.

Although 2024 showed recovery, demand volatility remains a long-term risk. Factories need more flexible production capability so they can respond quickly when orders return and reduce waste when orders slow down.

2. Low-Cost Competition from Neighboring Countries

Bangladesh, India, Cambodia, and other regional competitors continue to attract orders and investment through lower labor costs.

If Vietnam factories compete only on price, the pressure will become stronger over time.

Vietnam’s advantage should gradually shift from low-cost production to stable quality, faster response, transparent management, and smart manufacturing. This is why equipment upgrades and digital transformation are becoming more important.

3. Stricter Environmental, Audit, and Buyer Requirements

Major markets such as the U.S., EU, Japan, and South Korea are paying more attention to product quality, environmental responsibility, supply chain transparency, and compliance.

Factories that cannot provide stable quality records, production data, energy data, or traceability may face higher difficulty in winning long-term orders.

For Vietnam garment factories, sustainability and digitalization are no longer optional advantages. They are becoming part of the basic requirements for working with global brands.

Why Digital Transformation Matters for Vietnam Garment Factories

Digital transformation is not simply buying the newest machine or adding “AI” to a presentation.

Real digital transformation means using data to see problems, improve workflow, reduce errors, and make faster decisions.

Many digital transformation projects fail not because the technology is weak, but because the factory has unclear goals, poor implementation sequence, limited internal alignment, or suppliers that cannot provide long-term support.

Before starting digital transformation, factory management should ask:

Why do we need to transform?
Are we trying to reduce labor cost, improve quality, or increase production visibility?
Which process creates the biggest bottleneck?
Which data is still recorded manually?
Which department needs improvement first?
What systems or machines do we already have?

When the goal is clear, digital transformation becomes a practical business decision instead of a slogan.

Where Vietnam Factories Can Start

1. AI Fabric Inspection: Standardizing Quality Control

AI fabric inspection helps factories detect defects before fabric enters the cutting process. It can record defect type, location, and images.

For factories that rely heavily on manual inspection, the value is not only speed. AI inspection helps reduce subjective differences between inspectors and creates traceable data for downstream spreading and cutting.

2. Smart Fabric Spreading: Reducing Manual Records

Smart spreading machines can use IoT or cloud functions to provide production data, such as spreading length, layer count, machine status, operating time, and output.

This helps managers understand cutting room status and reduces mistakes caused by manual recording.

For large groups or factories operating across multiple locations, production visibility is especially important because managers may not be on site every day.

3. Digital Dashboards: Supporting Faster Decisions

A dashboard or control-room system can combine data from different machines and processes. It helps managers monitor production progress, machine status, abnormal conditions, and output performance.

The purpose of a dashboard is not to add another screen in the office. It helps managers see which process is delayed, which machine is underused, and which order may be at risk.

When data is visible in real time, factories can move from post-event reporting to real-time adjustment.

Supplier Selection: The Key to Making Digital Transformation Work

Digital transformation cannot depend only on the factory. External suppliers play a major role, especially when equipment involves machinery, electrical control, software, workflow, and after-sales service.

1. Suppliers Need Industry Knowledge

A good equipment supplier should understand real garment factory pain points, including labor shortages, manual recording errors, cutting room inefficiency, fabric waste, inconsistent quality standards, downtime, and buyer audit pressure.

If a supplier only provides a quotation but cannot explain how the machine fits into factory workflow, the equipment may not solve the real problem.

2. Suppliers Need Continuous Innovation

Garment equipment is moving from hardware-only machines to integrated hardware and software systems.

AI inspection, IoT spreading, digital dashboards, and equipment data integration require suppliers that can continue improving both machine performance and software capability.

Factories should evaluate whether suppliers understand equipment structure, production workflow, and data application.

3. After-Sales Service Must Be Reliable

The smarter the equipment, the more important after-sales service becomes.

Even with stable machines, problems may occur. When they do, supplier response speed affects downtime, repair cost, and production loss.

For Vietnam, regional service capability, agent technical knowledge, spare parts availability, and remote support should all be evaluated.

4. One-Stop Service Can Reduce Communication Cost

Garment factories use many different machines. If each machine comes from a different supplier, communication and integration become harder.

When equipment needs to share data, responsibility may also become unclear.

A supplier that can provide broader workflow solutions, such as inspection, spreading, cutting, needle detection, scanning, packing, or data integration, can help factories simplify planning and reduce communication cost.

5. Equipment Should Be Scalable

When the market is difficult, price is often the first concern. This is understandable, but factories should not evaluate only purchase price.

If equipment cannot output data, connect with systems, or support future upgrades, the factory may need to reinvest later when it wants dashboards, ERP, MES, or other management systems.

Before purchasing, factories should consider their 6- to 12-month business direction.

If the company’s strategy is to reduce scale and operate only at minimum cost, a low-cost option may fit the current situation. But if the company wants to improve competitiveness, win brand orders, or increase management transparency, scalability should be part of the decision.

Conclusion: Vietnam Must Move from Price Competition to Data Competition

Vietnam’s textile and garment industry faced export pressure in 2023, but recovered in 2024. This shows that opportunities still exist, but competition is changing.

If Vietnam factories continue relying only on low labor cost or cheap equipment, they will face increasing pressure from Bangladesh, India, and other low-cost competitors. They may also struggle to meet global brand expectations for quality, sustainability, and supply chain transparency.

Future competitiveness will come from efficiency, quality consistency, production visibility, equipment integration, and reliable suppliers.

AI fabric inspection, smart spreading, and digital dashboards are not only new technologies. They are tools that help factories turn production data into management decisions.

When factories can see problems, track quality, and adjust production in real time, they can move from price competition toward higher-value smart manufacturing.

OSHIMA continues to support garment and textile factories with AI fabric inspection, IoT smart spreading, and cutting room data integration solutions. For Vietnam garment factories, digital transformation is not a one-time purchase. It is an upgrade path that requires clear goals, internal execution, and reliable supplier support.