A Zara store in HCM City (Photo: baodautu.vn) Hanoi (VNA) – The influx of foreign fast fashion brands into Vietnam is threateninglocal retailers’ market share, forcing the firms to move to keep their footholdin the market, Dau tu (Vietnam Investment Review) newspaper reported.
Le Thi Quynh Trang, General Director of theMultimedia JSC – which runs many fashion programmes in Vietnam, said thecountry is becoming more popular in the global fashion industry as most fashionbrands, from high-end to fast fashion ones like Chanel, Giovanni, SalvatoreFerragamo, Versace, Burberry, Topshop, Mango and Zara, have come to Vietnam.H&M and Uniqlo also plan to enter this market.
“Vietnamese consumers’ demand is now ripe forthem to make inroads into Vietnam,” she said.
H&M is scheduled to open its first outlet inHo Chi Minh City in the next few days. The Swedish brand said Vietnam is one ofits five key future markets.
There are nearly 200 foreign fashion brands inVietnam, accounting for more than 60 percent of the market share. Mid-endbrands like Giordano and Bossini and high-end ones such as Mango, Dolce & Gabbana,Topshop, Gap, Banana Republic and Tommy Hilfiger post the strongest sales.
Competitionpressure
Foci, a domestic brand that debuted in 1999 andgained a strong foothold in the affordable segment, folded in 2014.
Ngo Thi Bau, General Director of Nguyen TamTextile & Garment Company – Foci’s owner – switched to opening aJapanese-style restaurant chain in HCM City. She said aside from high groundrent, Foci had to give up due to falling sales caused by cheap clothing fromChina and counterfeits.
The Viet Fashion Joint Stock Company, which ownsNinomaxx and N&M brands, has been making strategic steps to develop. It has62 retail outlets across the country at present and plans to increase storenumbers soon.
However, some insiders said Ninomaxx may loseits status to foreign rivals. They said in addition to cost-related problems,Vietnamese firms struggled as they were unable to grasp the latest fashiontrends or change their promotion methods.
Zara earned 5.5 billion VND (nearly 242,000 USD)on the opening day of its outlet at Vincom Dong Khoi shopping mall in HCM Cityon September 8, 2016. That reflects Vietnamese consumers’ interest in foreignfast fashion, which pressures domestic brands to make changes, according to Dautu newspaper.
The forceto change
Among Vietnamese brands, Canifa has emerged asan affordable fashion brand with the leading growth rate and store number inthe country. The presence of Zara, H&M and Uniqlo has forced Canifa tochange, especially with their target markets similar.
Canifa has raised the number of its outlets to96, many of which are based in major shopping malls or ideal locations in bigprovinces and cities. An advantage of this firm is that its factories are inVietnam, helping cut time from design, production to sale.
Nguyen Van Thoi, Chairman of TNG Investment andTrading Joint Stock Company, said the entrance into Vietnam by H&M, Zaraand Uniqlo is a chance for Vietnamese brands to develop their designs but alsoa big challenge.
TNG used to manufacture apparel ordered byWalmart, Zara, Levi’s, GAP, CK and Puma. However, it decided to abandon thisand specialise in selling TNG-branded products. TNG outlets are expected to increaseto about 100 this year, he said.
The decisive factor is keeping up withconsumers’ taste, thus Vietnamese firms need professional designers. TNG haspartly satisfied the market’s demand and gained a market share, he noted.
Thoi said TNG products are sold at competitiveprices and will outpace foreign brands in this regard.-VNA
VNA
