No longer the golden age of 10 years ago, Vietnamese fashion is regressing as foreign fashion firms continuously enter Vietnam.
Foreign fashion overwhelming
The fashion market is vibrant and creates a “fast fashion” trend when a series of foreign brands appear. In early September, H&M – a Swedish fashion house opened a store in Ho Chi Minh City. Previously, the fashion brand from Spain Zara also “offered to pitch” with 2 stores, one in Ho Chi Minh City and the other in Hanoi.
The first store of Zara in Ho Chi Minh City achieved revenue of 5.5 billion VND on the opening day, breaking the record of Zara store having the highest opening day sales overseas.
The success of Zara made Inditex Fashion Group (which owns Zara, Bershka, Stradivarius, Massimo Dutti, Oysho) think about bringing the remaining brands to Vietnam market.
The market is buzzing with the news that Stripe International Inc (Japan) acquires NEM Fashion Company. Sharing on this issue, Mr. Nguyen Tiep – NEM Communications Director affirmed: “Stripe International Inc only contributed capital and currently the two sides are still negotiating, so it is not possible to disclose details of the deal.” Tiep and NEM have planned to develop in foreign markets for a long time, but the internal strength is not enough, so the company wants to through cooperation with foreign investors to bring the brand to the world. .
Foreign fashion has been coming into Vietnam a lot since 2015, when tariff barriers of the garment industry were removed. According to incomplete statistics, there are currently nearly 200 foreign fashion brands present in Vietnam. Mr. Nguyen Tiep said that the interest of foreign businesses as well as the large presence of popular foreign fashion brands recently confirmed that the Vietnamese fashion market is very attractive.
According to the Vietnam National Textile and Garment Group, the domestic garment market has a scale of 4.5 billion USD / year, the growth rate of 20% / year. On average, Vietnamese people spend about 100,000 billion VND on clothes each year. The survey results of Nielsen show that Vietnamese spending on clothes ranks third after food and savings, and the number of Vietnamese who love brands is also third in the world, after China and India.
Struggling in a difficult position
According to incomplete statistics, there are currently nearly 200 foreign fashion brands present in Vietnam.
The market is so attractive, but domestic enterprises are very difficult if not the Vietnamese fashion is in decline. About 10 years ago, Ninomaxx, Blue Exchange, Viet Thy, Foci, Sifa, PT 2000, Sea Collection, Dan Chau are brands that are always chosen by young people when buying clothes. In particular, Ninomaxx has a chain with over 200 stores, Blue Exchange has more than 140 stores, Viet Thy, Foci has several dozen points of sale. But over the past 4-5 years, these brands have gradually narrowed their business.
In 2013, under the pressure of foreign fashion, Viet Fashion Company (Ninomaxx) changed the model of the store according to one-stop shop design Ninomaxx Concept at the same time with the company’s reform. Sharing with Saigon Entrepreneurs at that time, Mr. Nguyen Huu Phung – Chairman of Ninomaxx’s Board of Directors, said that the company had to reform from product, distribution, customer service to personnel.
Ninomaxx not only focuses on fashion factor, but also increases product quality while redefining the brand. Despite taking many measures, but due to the massive penetration of foreign fashion, it is difficult for Ninomaxx to return to its golden age. Currently, Ninomaxx has only about 60 stores.
A businessman in the garment industry said that Vietnamese fashion had come to a recession. This was announced before Vietnam prepared to remove tariff barriers – the last shield to protect domestic goods. And now, after Zara and H&M laid their foundation in Vietnam, there has been a wave of “fast fashion” favorites from foreign popular fashion brands. This wave will continue in the coming time when Uniqlo and many other popular fashion brands prepare to debut.
It is difficult, but according to Mr. Nguyen Tiep, competition will put pressure on Vietnamese fashion businesses to change. In order to survive and develop, enterprises must be able to compete, affirm their brands and form their own styles. Currently, NEM has built 45 stores and will add 5 stores by the end of this year.
“By cooperating with foreign enterprises, the Company will learn the garment technology and management process of partners to raise the brand name. Next time, NEM’s products will be available in major cities in the city.” Vietnam and abroad “, Mr. Tiep information.
Ms. Nguyen Thi Dien – General Director of An Phuoc Company, said that the fast fashion wave from abroad has not had much influence on An Phuoc. That is because fast fashion hits the young and changing segment while An Phuoc’s customer segment is middle-aged fashion.
Knowing that there will still be many foreign brands in the market, An Phuoc has invested in machinery and equipment, improved product quality and customer service, and expanded distribution network. Since the beginning of the year, An Phuoc has opened 10 more stores and now has 128 stores in many provinces and cities.
* Source: Saigon Businessman