The low‑cost OEM model is leaving many Vietnamese factories with barely any profit, making it hard to stay competitive. This article explains practical steps that can turn cheap‑margin production into a high‑value business. By adopting design, digital tools and regional cooperation, firms can capture more of the product’s value and improve their resilience.

The article notes that net profits have fallen to just $1 per product under the OEM model. Ngo Sy Hoai also warned that this model undermines innovation and forces firms into fierce price competition.

Experts say the region should move from “Make in ASEAN” to “Engineered and Innovated in ASEAN”, putting design, engineering and innovation at the core of manufacturing. Data from the OECD show that foreign value added in Vietnam’s exports rose from 33% in 2010 to nearly 50% in 2022, highlighting the current reliance on imported inputs and the need for local capability building.

Youxian Zhu, founder and CEO of Black Lake Technologies, described how his company used artificial intelligence to design unique souvenirs. The AI‑designed products allowed factories to earn between $10 and $20 per item, even with minimum orders of only 100 units, showing how digital technology can enable profitable small‑batch production.

The key lesson is clear: by shifting from low‑cost OEM to design‑driven, technology‑enabled production, Vietnamese manufacturers can raise profit margins and climb the value chain. Embracing innovation and regional collaboration will help the industry move beyond price competition toward sustainable growth.