Southeast Asia inspection demand rose 24% in 2025: Vietnam and Thailand lead

Quality inspection volumes across Southeast Asia climbed 24 per cent year on year in 2025, according to data from QIMA, the global quality control and compliance firm. Vietnam led the region with inspection and audit demand up 30 per cent, whilst Thailand recorded 44 per cent growth. The figures, drawn from QIMA's work with more than 30,000 clients, reflect actual orders placed for pre shipment inspections, supplier audits and testing services, offering one of the most concrete proxies available for tracking where fashion and consumer goods production is actually moving.

At the same time, inspection demand in the Mediterranean region grew 25 per cent in 2025, with Egypt up 52 per cent, Morocco up 38 per cent and Tunisia up 18 per cent, as European buyers accelerated nearshoring strategies. Nearshoring and reshoring reached a record 14 per cent of EU sourcing in 2025, up from less than 8 per cent three years earlier. The parallel growth in Southeast Asia and the Mediterranean underscores a lasting reconfiguration of global apparel supply chains, driven by tariff pressure, lead time demands and a search for resilience beyond China.

For fashion executives, the data matters because inspection volumes are a leading indicator of committed capacity. Brands order inspections only after placing production orders, which means rising inspection demand signals capital deployment, not wishful planning. The scale and persistence of the 2025 growth suggest that sourcing diversification has moved from pilot programmes to structural shifts in procurement strategy.

What do rising inspection volumes tell us about production shifts?

Inspection demand serves as a real time barometer of manufacturing activity because third party quality control is typically booked only after purchase orders are confirmed and production is under way. When QIMA reports a 30 per cent increase in Vietnam inspections, it reflects orders already placed by brands and retailers, not aspirations. This makes inspection data a more immediate signal than customs statistics, which lag by months, or survey intentions, which may never materialise.

The 2025 figures show diversification deepening across multiple regions. US inspection and audit demand in Southeast Asia rose 42 per cent year on year in 2025, with Vietnam, Cambodia and Indonesia capturing the largest shares. European buyers raised Southeast Asia inspection demand 13 per cent whilst simultaneously growing Mediterranean sourcing 25 per cent. Latin American buyers increased Southeast Asia inspections 61 per cent, indicating that sourcing shifts are not confined to Western markets.

Importantly, inspection growth occurred across all four quarters of 2025. In Q2 2025, US demand for inspections in Southeast Asia's key supplier markets grew 29 per cent year on year, whilst China inspections fell 24 per cent. By Q3, Vietnam inspection demand from European buyers was up 16 per cent and Thailand up 29 per cent. The consistency across quarters distinguishes structural shifts from one off order swings.

Rising inspections also signal investment in local teams. Brands typically establish or expand local sourcing offices when volumes justify the overhead. QIMA data shows that demand from US and European buyers grew at the same pace as the regional average in Southeast Asia, whilst demand from Latin and South American clients surged 61 per cent year on year in the 12 months of 2025, suggesting capacity expansion is occurring across buyer geographies.

Why did Vietnam and Thailand see the strongest growth?

Vietnam's 30 per cent inspection growth in 2025 builds on a multi year trajectory. The country's textile and garment exports reached approximately 46 billion US dollars in 2025, up from around 44 billion dollars in 2024, according to Vietnam's Ministry of Industry and Trade. The sector targets 48 billion dollars in 2026. Vietnam's share of US garment imports rose to 21.1 per cent in 2025 from 18.9 per cent in 2024, making it the single largest source of both knit and woven apparel for the US market, ahead of China at roughly 14 per cent.

Vietnam offers established garment infrastructure, with over 6,000 textile and garment facilities active in provinces such as Nam Dinh as of March 2025. Southern Vietnam, concentrated in Ho Chi Minh City, Binh Duong, Dong Nai and Long An, produces roughly three fifths of the country's garment output. The country benefits from free trade agreements including the EU Vietnam FTA and CPTPP, which reduce tariff exposure compared to direct sourcing from China.

Thailand's 44 per cent inspection growth reflects a different positioning. The Thailand textile market was valued at 4.97 billion dollars in 2026, with fashion and apparel accounting for 62.58 per cent of revenue. Thailand is focusing on higher value production, original design manufacturing and smaller minimum order quantities rather than competing on volume alone. Thai garment exports in the first quarter of 2026 totalled 528 million dollars. The country's textile sector approved 47 projects totalling 343 million dollars aimed at trimming energy use by up to 30 per cent per metre of cloth by end 2025, positioning Thailand as a sustainability focused alternative.

Both countries benefit from proximity to fabric and trim suppliers across Asia, though both still source significant inputs from China. Domestic fabric production in Vietnam satisfies 25 to 30 per cent of domestic demand, meaning brands moving final assembly to Vietnam often still rely on Chinese yarn and fabric. Thailand's established polyester and viscose fibre manufacturing base provides local textile producers with access to essential raw materials for fabric production.

How does Mediterranean growth compare?

Mediterranean inspection demand grew 25 per cent in 2025, driven by Egypt at 52 per cent, Morocco at 38 per cent and Tunisia at 18 per cent. The growth reflects European buyers' strategic shift towards nearshoring to reduce lead times, lower carbon footprints and mitigate Red Sea shipping disruptions that affected Asian routes intermittently in 2024 and early 2025.

Morocco has become a nearshoring anchor for European brands. The country exports more than 3.6 billion dollars in apparel annually, with garments representing nearly one third of all Moroccan exports to the EU. Morocco benefits from geographical proximity, duty free access to the EU and US markets under trade agreements, and lead times as short as two to three weeks to major European markets. Over 1,600 textile companies produce approximately one billion garments per year in Morocco.

In Q2 2025, Morocco inspection demand surged 53 per cent year on year, whilst Egypt rose 73 per cent and Tunisia 35 per cent, as brands diversified away from traditional Asian sourcing regions. By Q3 2025, Morocco inspection activity was up 15 per cent year on year, Tunisia up 19 per cent and Egypt up 24 per cent, indicating sustained momentum. Whilst Turkey's textile sector struggled with rising costs and labour shortages, Egypt, Morocco and Tunisia came out ahead, supported by both new business and orders reallocated within the region.

The Mediterranean region now accounts for over 8 per cent of European buyers' global procurement, highlighting successful execution of nearshoring strategies. Inspection demand across the EU's nearshoring and reshoring markets grew 18 per cent year on year in Q2 2025, with Mediterranean sourcing particularly dynamic. European buyers have shown a steady increase in demand for inspections in countries such as Morocco, Egypt and Tunisia, making them key supplier partners.

Which brands are acting on the data?

Decathlon, the French sporting goods retailer with 20.7 billion euros in gross merchandise volume in 2025, quintupled its production in Morocco. In the last two decades, Decathlon had actually reduced its orders from Moroccan suppliers by five times, but reversed course with plans to pass approximately 100 million dollars in orders to Moroccan manufacturers. Given that Europe is Decathlon's primary market, Morocco and Tunisia have become key countries for nearshoring practices due to their proximity. As of 31 December 2025, Decathlon operates 40 production offices in 24 countries and regions, including Morocco, Egypt, Tunisia, Algeria and Ethiopia in Africa.

Oxford Industries, the US listed parent of Tommy Bahama, Lilly Pulitzer and other lifestyle brands, undertook significant actions to accelerate sourcing diversification in fiscal 2025. Early in fiscal 2025, approximately 40 per cent of Oxford's apparel and related products were expected to be sourced from producers located in China. Based on strategic initiatives to diversify sourcing that were initially prompted by uncertainties in the trade environment early in fiscal 2025, total sourcing production during fiscal 2025 from China was 29 per cent of products purchased during the year. Going into fiscal 2026, Oxford's annualised run rate for China production has been reduced to approximately 15 per cent of total production.

Reflecting the diversification of Oxford's sourcing footprint, approximately 24 per cent of apparel and related products were sourced from producers located in Vietnam and 10 per cent from Indonesia during fiscal 2025. Other than Vietnam, Indonesia and China, no other country represented more than 10 per cent of such purchases. During fiscal 2025, most of Oxford's brands, with the exception of Johnny Was, made significant progress in diversifying their sourcing footprint. The company noted that full sourcing realignment takes 12 to 18 months or more.

What is driving the shift beyond tariffs?

Tariff pressure accelerated diversification, but other factors sustain it. US fashion companies reported sourcing apparel from 49 countries in 2026, up from 46 countries in 2025, according to the 2026 US Fashion Industry Association benchmarking study. Compared with 2025, sourcing diversification became more geographically balanced. China's role in respondents' sourcing portfolios continued to decline in 2026, with more than 80 per cent of respondents planning to further reduce apparel sourcing from China over the next two years through 2027.

Lead time requirements drive nearshoring. Fast fashion and trend responsive brands require shorter production cycles. Morocco offers two to three week lead times to European markets compared to eight to ten weeks from Asia. Vietnam to US or EU warehouses averages 14 to 16 weeks including sea freight, with reorders compressing to 10 to 12 weeks when fabric is already booked.

Sustainability regulations add momentum. The EU's incoming Digital Product Passport and supply chain due diligence directives require brands to trace products to raw material level. A 2025 TrusTrace report found that 21 per cent of fashion brands selling into the US have faced customs shipment detentions, whilst 58 per cent consider it a realistic near term risk. Only 20 per cent of firms possess verified data about their supply chains going as far upstream as the material and farm level. Nearshoring to Morocco, Tunisia or Turkey can simplify traceability and reduce the number of intermediaries.

Risk diversification is becoming permanent strategy. Fashion supply chain risk incidents in the retail sector increased 22 per cent in the past year alone and more than doubled globally since 2020, according to RepRisk data covering May 2024 to April 2025. Companies are moving beyond short term crisis response and increasingly adopting longer term strategies focused on supply chain optimisation, compliance capabilities and operational resilience.

Is China losing its role in fashion manufacturing?

China's share of US apparel imports has declined, but the picture is more complex than simple substitution. By full year 2025 US import value, Vietnam led both knit at 21.4 per cent and woven at 20.7 per cent apparel, whilst China slipped to roughly 14 per cent of each category. US demand for inspections and audits in China decreased 18 per cent year on year in 2025, whilst Southeast Asia inspection demand grew 42 per cent year on year across the region.

However, China remains essential in upstream segments. China's share of global fabric exports rose to 44 per cent by 2022, even as finished garment production dispersed across new sourcing geographies. The majority of fibres included in apparel products currently originate in China even if the products are manufactured elsewhere. Brands moving assembly to Vietnam or Bangladesh still rely on Chinese yarn, fabric, zippers, buttons and other trims. This means diversification is occurring at the assembly stage, but dependence on Chinese inputs persists.

China is also repositioning towards higher value segments. The country is moving away from tariff sensitive finished garment manufacturing towards upstream segments of the value chain, such as yarns, fabrics and specialised intermediate products. Within China, production is shifting inland to lower cost provinces. China's garment industry is evolving from mass producing low cost clothing for fast fashion brands to a more diversified and specialised production model that incorporates cutting edge technologies and sustainable practices.

For certain product categories, China retains advantages. China remained an important sourcing partner for products such as toys and electricals. Technical fabrics, extremely high volume basics and complex trims often still come from China. Smart brands diversify by category, with core woven garments shifting to Indonesia or Vietnam, whilst complex trims might stay in China.

What are the risks and limits of these shifts?

Capacity constraints may become a seller's market. QIMA inspection and audit data suggests that Southeast Asia's supplier base is becoming less dependent on the US. Whilst US buyers still represent 51 per cent of Southeast Asian inspection volumes in Q1 2026, demand from Latin America surged 53 per cent year on year and buyers from Australia and New Zealand registered 28 per cent year on year growth. Competition for capacity may drive up minimum order quantities and prices.

Skill and infrastructure gaps remain. Morocco, Egypt and Tunisia face challenges related to adoption of cutting edge technologies and training for sustainable and eco friendly textile production. Thailand's garment industry faces tougher competition, including wages, energy costs, currency volatility and competition from low cost countries. Vietnam is shifting from volume led growth to value creation, which requires upgrading workforce skills and design capabilities.

Consolidation is replacing expansion for many brands. The 2026 US Fashion Industry Association benchmarking study found that only 21 per cent of respondents plan to source from more countries through 2027, down from 59 per cent in 2025. Whilst 65 per cent of surveyed brands procure from 10 or more countries, only 7 per cent reported sourcing from 20 or more in 2026, down from rates between 20 and 30 per cent in 2024 and 2025. Companies are moving from diversification to consolidation, focusing on fewer but more capable vendors.

Geopolitical and climate risks affect all regions. Fashion executives rank geopolitical instability and supply chain disruptions among their top concerns. The Strait of Hormuz fuel crisis in 2026 exposed limits of supply chain diversification, with China's share of North America's inspection and audit volumes hitting a six quarter high of 35 per cent in Q2 2026 as Southeast Asia's share slid to pre 2025 levels. Among EU buyers, Southeast Asia's share of inspections and audits fell in every month of Q2 2026, tracking a matching drop in demand from plus 14 per cent year on year growth in April to minus 5 per cent year on year contraction in June.

Compliance and traceability remain weak. Seventy five per cent of brands hold trusted data on their Tier 1 factories, falling to 33 per cent at Tier 3 (yarn and fibre) and just 20 per cent at Tier 4 (raw material and farm level), according to TrusTrace's 2025 enforcement era report. Nearly half of cotton dominant businesses have supply chain visibility to tier 4 level, but only 44 per cent always or often verify supplier data. Moving production does not automatically solve transparency problems.

How quickly can brands reallocate production?

Full sourcing realignment typically takes 12 to 18 months or more, according to Oxford Industries. The timeline includes identifying and vetting new suppliers, conducting audits, running sample and pilot production, scaling to commercial volumes, and training factory teams on brand standards. Companies that moved fastest had existing relationships or local sourcing offices in target countries.

Lead times for establishing new capacity vary by region. Vietnam and Bangladesh benefit from established garment ecosystems, allowing faster onboarding. Morocco and Egypt offer existing textile infrastructure but may require investment in specific technical capabilities. Building from zero in a new country can take 24 months or more to reach stable production quality.

Brands with multi country capable suppliers can reallocate faster. Some leading US and EU fashion companies mentioned in 2025 Q2 earnings call transcripts that they intentionally seek vendors with production capacity across multiple countries to achieve sourcing diversification and mitigate risks. This approach allows order reallocation within an existing relationship rather than building new supplier partnerships from scratch.

What should fashion companies do now?

1. Map inspection data to procurement strategy. Track inspection volumes by country and supplier as a real time check on whether sourcing targets are translating into actual orders. Inspection trends reveal capacity shifts earlier than customs data.
2. Diversify by category, not just geography. Avoid spreading all product categories thinly across multiple countries. Assign specific categories to specific regions based on technical capability, lead time requirements and input availability. China may remain optimal for technical fabrics, Vietnam for wovens, Morocco for quick response.
3. Build traceability to Tier 4 before regulators require it. Establish verified data on raw material suppliers and farms now, particularly for cotton. Nearshoring to Morocco or Turkey can simplify traceability compared to multi country Asian supply chains. Only 20 per cent of brands currently have actionable Tier 4 data.
4. Secure capacity in high growth markets early. Inspection demand surging 44 per cent in Thailand or 52 per cent in Egypt signals tightening capacity. Lock in relationships and allocations with capable suppliers before competition intensifies. Consider joint ventures or exclusive partnerships where volumes justify the commitment.
5. Quantify total landed cost, not just FOB price. Factor in lead time, inventory carrying cost, carbon border adjustment risk, duty and compliance cost when comparing regions. Mediterranean nearshoring may cost 5 to 15 per cent more FOB than Asia but deliver savings on inventory, markdowns and logistics.
6. Renegotiate terms for consolidation, not expansion. Sixty three per cent of US fashion companies are renegotiating supplier contracts in 2026. Consolidate volumes with fewer, more capable vendors who can handle compliance, faster turns and multi country production. Stop adding new suppliers unless a clear capability gap exists.
7. Stress test scenarios beyond tariffs. Model exposure to energy shocks, port closures, currency swings and climate disruptions across your sourcing footprint. The Strait of Hormuz closure in 2026 showed that alternative sources can fail simultaneously. No single region offers complete resilience.