Ho Chi Minh City, Vietnam – China is the world factory of cars, toys and computers. But not tennis. China is losing this title to the city of Ho Chi Minh, in Vietnam.
Factories surrounding this accelerated city produce foam soles, soft insoles, cotton laces and mesh fabric. The pieces are transported by trucks to warehouses to be mounted on tennis. Then, in nearby ports, containers are loaded with boxes for Nike, Adidas, Saucony and Brooks Sports and sent by the Dong Nai River to the sea.
For the business world, leaving China is difficult because of its domain over raw materials and its manufacturing capacity that boosted profits and kept consumers satisfied. The tennis industry is showing how this can be done. Big brands still have huge factories in China that now produce mainly sneakers sold in their own country. But Vietnam has surpassed China as the leading source of tennis sold in the world by Nike, Adidas, Brooks and others.
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The growing importance of Vietnam in the manufacture of tennis was clear on April 3. After President Donald Trump threatens Vietnam with a 46%rate, Nike and Adidas shares plummeted. Since then, the two countries have announced an initial trade agreement that has reduced new rates to 20%.
The uncertainty caused by Trump’s rates on costs is forcing a reassessment in the industry. Nike said global tariffs would take about $ 1 billion in extra costs this year. To minimize the impact, it is further reducing production in China, where tariffs are now bigger than in Vietnam. But some companies, concerned with depending too much on a single country, are also debating whether they should transfer part of production out of Vietnam.
China opened its economy. Vietnam also
Industry began to move around Asia in search of lower costs and salaries in the 1970s. That’s when brands like Nike, then novice, resorted to factories in South Korea and Taiwan to grow as tennis culture gained strength in the United States. Factories in the east Asian could make cheap, fast and large -scale shoes.
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China opened its economy to foreign companies in the 1980s, with access to hundreds of thousands of workers. Suddenly China got cheaper and attractive. South Korean and Taiwanese companies working for global tennis brands quickly transferred much of their factories to China.
But Silently Vietnam was making their own disruptive changes in a communism -controlled economy, and by the early 2000s, the southern neighbor of China was already on everyone’s radar.
“It was like the opening of China,” said Tony Le, an American tennis executive that moved to Ho Chi Minh City from Portland, Oregon, with Brooks in 2019. “Now it was the opening of Vietnam.”
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Le, who fled Vietnam in 1976 at 3 years after the end of the Vietnam War, always believed that the moment of his country would arrive. He spent two months in China in 1997, working as a trainee at Adidas, and was impressed by the size of China. Taiwanese companies such as Pou Chen, which had tens of thousands of workers in China, built factories that were “small towns,” he said.
In the middle of the 2000s, Le worked for Nike when she started using Vietnamese factories to make basic shoe products.
“Deep down, I hoped the country would enter this industry,” Le said.
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It didn’t take long. In the 2010s, Chinese workers began to demand higher wages and their companies were being skilled at making copied products, often breaking foreign copyright. Global marks were forced to seek diversification.
Vietnam offered a government that received foreign investment and the best possible demographics: a growing young population in search of work. In the presidency of Trump in 2017, Vietnamese factories already produced running sneakers, even with brands deepening their presence in China to the local consumer market. After Trump confronts China about trade in 2018, other multinationals from various sectors followed the shoe industry for Vietnam.
Most of the time, however, tennis companies still depended on China for raw materials and components, including rubber and insoles.
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Everything changed by 2020, when China closed its borders at the beginning of the Covid-19 pandemic. Business leaders with paralyzed factories realized how much they depended on China. For shoe executives, it was not difficult to start transferring resources to Vietnam.
“It’s a much more localized supply chain than in other industries,” said Bob Shoorrock, a veteran executive of the sporting goods industry. “There is a need for speed for the market, and long -term partners have already made investments in the supply chain.”
Most days, trucks slowly travel along the highway that connects the country’s shoe factories to Ho Chi Minh City and their ports. They go through dozens of land full of excavators and rental machines and containers.
Selling sticky rice cakes by the roadside, Pham Kieu Diem, 47, remembered when rice fields surrounded the entire area.
“There were no factories and only one or two houses in this long stretch here,” she said.
In July 1995, a factory known as Viet Vinh was built in some old rice fields. “I remember this date, because I was one of the first workers who worked there,” said Diem.
She was 17 at the time and was for 19 years. “I didn’t know how to make tennis, and I had never used tennis before,” he said. Diem had abandoned school in the ninth year to help his family cultivate rice and beans.
“The money we won – me and my two sisters – saved and bought land,” said Diem. “We built a house in it, so it helped our income and changed our lives for the better.”
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