Vietnam may soon become a fashionista paradise with scores of leadingfashion retailers vying against one another to distribute their brandsin the fast growing country, the Vietnam Investment Review (VIR) hasreported.
Chairman of Luala Fashion Company Do Ngoc Minh justinaugurated their second store in Ho Chi Minh City. He forecasted thatVietnam will soon be a leading destination for fashionable shoppers fromthroughout the region. Foreign luxury retailers would rather worktogether to grow their collective market share quickly, than catfightover mere metres of sales space.
Luala’s second store is over 300square metres and has occupied a location previously held by Gucci andneighbouring the Milano store.
Luala was founded in 2006 and ismanaged by DX Fashion Group, it opened its first store in Hanoi andspecialises in distributing numerous international fashion brands.
In May last year, Luala merged with Milano with the aim of puting a firm foothold in the southern market.
Expertssay Ho Chi Minh City is an ideal market for high-end fashion brands,but Luala is also faced with competition from similar companies such asImex Pan Pacific Group (IPP), Tam Son Fashion, and Four Seasons.
VIRquoted Minh as saying that location is critical in developing abusiness. Luala is confident that the company’s buyers have over 20years experience in the fashion industry and have a clear understandingof Vietnamese consumer trends.
Minh added that DX Fashion was on asmaller scale than its competitors but that Luala included a privatedevelopment strategy unique to it and Milano. Instead of opening singlebrand stores within a trade centre, DX Fashion invests in departmentstores offering scores of brands.
Luxury fashion companies havenoticed several interesting aspects of Vietnam likely to lureinternational tourists. Moreover, they also have strategies to win overmedium and high-end domestic customers.
Le Hong Thuy Tien,General Director of IPP said that sales to international tourists weregrowing and that just last year IPP saw 20 percent growth in the face ofshrinking consumption.
Minh said that Vietnam’s retail marketstill has plenty of room but that high-end fashion brands facechallenges such as complex customs procedures and high import taxes.
Accordingto Minh, if the state supplies sound policies, current fashioncompanies in the countries will fare even better and therefore potentialentrants would be more eager to invest. Brands that have madesignificant investments in Hong Kong, Singapore and Thailand have theirsites set on Vietnam and are just waiting for the right time to strike.
“Rightnow, the right policies and thereafter establishing presence are moreimportant to these companies than fighting over market share,” Minhexplained.
Minh added that at present, Vietnam is not yetconsidered an attractive high-class shopping destination in Asia. Heexplained that compared to other ASEAN countries, Vietnam’s touristvolume was high, but their spending was quite low. Most internationaltourists spend a lot on souvenirs handicrafts. Not only DX Fashion, butother groups such as IPP, Tam Son and Four Seasons are also eagerlyawaiting a policy shift in their favour.
One policy they wouldlike is a value-added tax (VAT) refund. Thailand is notable in thisregard. But in Vietnam, the VAT refund procedure is complex. That said,until this changes, if fashion companies want sales to internationaltourists to increase they may have to loosen their own purse strings.
DiscussingIPP’s business plan for this year, Tien said they hope the economy willget back on track as their goal is to double last year’s turnover. Minhsaid DX and Luala were preparing for challenges in 2014 but that theyare confident in their long-term strategy.-VNA
Chairman of Luala Fashion Company Do Ngoc Minh justinaugurated their second store in Ho Chi Minh City. He forecasted thatVietnam will soon be a leading destination for fashionable shoppers fromthroughout the region. Foreign luxury retailers would rather worktogether to grow their collective market share quickly, than catfightover mere metres of sales space.
Luala’s second store is over 300square metres and has occupied a location previously held by Gucci andneighbouring the Milano store.
Luala was founded in 2006 and ismanaged by DX Fashion Group, it opened its first store in Hanoi andspecialises in distributing numerous international fashion brands.
In May last year, Luala merged with Milano with the aim of puting a firm foothold in the southern market.
Expertssay Ho Chi Minh City is an ideal market for high-end fashion brands,but Luala is also faced with competition from similar companies such asImex Pan Pacific Group (IPP), Tam Son Fashion, and Four Seasons.
VIRquoted Minh as saying that location is critical in developing abusiness. Luala is confident that the company’s buyers have over 20years experience in the fashion industry and have a clear understandingof Vietnamese consumer trends.
Minh added that DX Fashion was on asmaller scale than its competitors but that Luala included a privatedevelopment strategy unique to it and Milano. Instead of opening singlebrand stores within a trade centre, DX Fashion invests in departmentstores offering scores of brands.
Luxury fashion companies havenoticed several interesting aspects of Vietnam likely to lureinternational tourists. Moreover, they also have strategies to win overmedium and high-end domestic customers.
Le Hong Thuy Tien,General Director of IPP said that sales to international tourists weregrowing and that just last year IPP saw 20 percent growth in the face ofshrinking consumption.
Minh said that Vietnam’s retail marketstill has plenty of room but that high-end fashion brands facechallenges such as complex customs procedures and high import taxes.
Accordingto Minh, if the state supplies sound policies, current fashioncompanies in the countries will fare even better and therefore potentialentrants would be more eager to invest. Brands that have madesignificant investments in Hong Kong, Singapore and Thailand have theirsites set on Vietnam and are just waiting for the right time to strike.
“Rightnow, the right policies and thereafter establishing presence are moreimportant to these companies than fighting over market share,” Minhexplained.
Minh added that at present, Vietnam is not yetconsidered an attractive high-class shopping destination in Asia. Heexplained that compared to other ASEAN countries, Vietnam’s touristvolume was high, but their spending was quite low. Most internationaltourists spend a lot on souvenirs handicrafts. Not only DX Fashion, butother groups such as IPP, Tam Son and Four Seasons are also eagerlyawaiting a policy shift in their favour.
One policy they wouldlike is a value-added tax (VAT) refund. Thailand is notable in thisregard. But in Vietnam, the VAT refund procedure is complex. That said,until this changes, if fashion companies want sales to internationaltourists to increase they may have to loosen their own purse strings.
DiscussingIPP’s business plan for this year, Tien said they hope the economy willget back on track as their goal is to double last year’s turnover. Minhsaid DX and Luala were preparing for challenges in 2014 but that theyare confident in their long-term strategy.-VNA
