Amid a growing “China + 1” strategy among European companies seeking to reduce supply chain risks and diversify markets, Southeast Asia has emerged as a pivotal destination. Vietnam, along with Singapore and Thailand, has become an attractive choice in this shifting landscape.

According to data from the French Ministry of Finance, France’s exports to ASEAN reached approximately EUR 14.3 billion in 2024, making the bloc France’s sixth-largest export market after the European Union (EU), the United States, China, the United Kingdom, and Switzerland. Among ASEAN countries, Singapore is the largest importer of French goods, accounting for 53% of France’s total exports to the region, followed by Thailand, Vietnam, and Malaysia.

Explaining this trend, the head of the ASEAN–Oceania region at France’s trade and investment promotion agency noted that ASEAN occupies a strategic position between two major economies—China and India—while benefiting from global geopolitical shifts. These factors are prompting more European companies to diversify their supply chains into the region.
Within this trend, Vietnam is considered one of the primary beneficiaries, as numerous multinational corporations have chosen the country to expand production or establish regional coordination hubs. In the textile and footwear sector, brands such as Adidas, Puma, and Decathlon have shifted part of their manufacturing to Vietnam. Many electronics companies are also taking advantage of the country’s labor availability and developing supply chain network.

A major factor enhancing the competitiveness of French—and more broadly European—businesses in ASEAN is the network of free trade agreements. The EU-Vietnam Free Trade Agreement (EVFTA), along with similar agreements with Singapore and potentially Indonesia in the future, allows French companies to leverage intra-regional tariff preferences, develop efficient supply chains, and strengthen their competitiveness in the region.

However, ASEAN is far from a uniform market. Significant differences in population size, economic characteristics, and income levels—such as between Indonesia (with over 280 million people across more than 17,000 islands) and Singapore (a nation of just over 6 million with one of the world’s highest per-capita incomes)—require French businesses to adopt flexible, tailored approaches for each market.

Singapore remains the regional hub for French companies, hosting more than 800 French firms, including major corporations such as TotalEnergies, Safran, Thales, Airbus, Sanofi, and BioMérieux. However, rising operating costs have prompted some companies to relocate their regional headquarters to Thailand, Vietnam, or Malaysia.

As part of efforts to strengthen ties with Southeast Asia, French President Emmanuel Macron’s recent visits to Hanoi and Jakarta in late May underscored the importance of expanding EU–ASEAN trade agreements to reduce dependence on the United States and China.

Despite these opportunities, French businesses still face significant competition in ASEAN markets. French goods currently account for only 1.5% of the region’s market share—less than half of Germany’s. Additionally, France’s exports to ASEAN fell by nearly 15% in 2024, following a strong rebound in 2023.

Source: Compiled by the Multilateral Trade Policy Department, Ministry of Industry and Trade of Viet Nam