Vietnamese fashion industry under fierce competition
Recently, the arrivals of international fashion brands such as mango, Zara, H&M to the Vietnamese fashion market have led to concern that local enterprises can lose right in home ground.
Since 2015, Mango has opened two Mega stores in Vincom Ba Trieu and Royal City. In June, the American fashion brand Old Navy also launched its first sotre in Vietnam with products for men, women and children. Previously, in September 2016, the famous fashion brand Zara of Inditex (Spain) also joined the Vietnam’s market with the first store in Vincom Dong Khoi (Ho Chi Minh). In November, fashionista in Hanoi could not contain their excitement with both Zara and H&M opened their respective stores in the capital. On the other hand, the Japanese brand Uniqlo is also actively recruiting personnel for its first store in Vietnam by the end of 2017.
At present, there are 200 international fashion brands in Vietnam.
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Chairman of Association Vietnamese Retailers Dinh Thi My Loan said, international fashion brands are showing interest in Vietnam’s retail market, which has the average growth rate from 15 – 20%. The recent survey of Nielsen showed that, Vietnamese customers’ love for luxury brands are in the top three of the world, only after China (74%) and India (59%). “At present, there are 200 international fashion brands in Vietnam, which contribute to 60% in the market ranging from luxury brands to common one. The most favorable brands are Giordano, Bossini, Mango, or at a higher level such as C&K, D&G, Gucci, Nautica” – Loan said.
With regard to the pressure for local enterprises against international fashion brands, Vice Chairman of VISTA Dang Phuong Dung said, the presences of international brands in Vietnam will stimulate local enterprises to diversify their products if they want to keep their market shares. “In recent years, Vietnam has been one of the top exporters for textile & garment in the world. Vietnamese enterprises understand clearly the culture to design products suitable with customers’ preferences. The issue is that whether they want to improve and put effort into it” – Dung stressed.
Sharing the same view, Assoc. Prof. Dinh Trong Thinh said, the fierce competition in Vietnam’s retail market will put local enterprises to develop their own brands. In one way, they can expand their retail network through cooperating with leading retailers such as Big C, Saigon Co.opmart, AEON Vietnam to compete with imported goods. On the other hand, local enterprises should focus on specialization and expand production to reduce cost.
Reality shows that, under the impact of industrial revolution 4.0, big importers of textile & garment in the world will shift their factories from countries with cheap labor back to mainland. Therefore, if local enterprises in Vietnam do not gradually develop their brands and gain market shares, ensuring the balance between export and domestic market, they can hardly survive right in the home ground.
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