Customers shops at Co.opmart in HCM CIty. Việt Nam's textile and garment industry must walk on two feet, not only focusing on the international but also on the domestic market. (Photo: co-opmart.com.vn) Hanoi (VNS/VNA) - After successfully conqueringinternational markets, many businesses have returned to conquer the domesticmarket as more and more customers choose to buy Vietnamese products.
Lessons learned from the textile industry
Truong Van Cam, Vice President of the Vietnam Textile and ApparelAssociation (Vitas), said that the textile and garment industry is one of Vietnam'skey export industries and creates many jobs for workers. The textile andgarment industry’s export turnover reached more than 44 billion USD in 2022. Vietnam'stextile and garment industry currently not only promotes exports but alsoserves the domestic market.
“Many Made-in-Vietnam products, ranging from garments, footwearand seafood to many other industrial products, are exported all over the world,including many developed countries. This is also the pride of Vietnameseproducts. But we often receive questions about why textiles and garments oftenfocus on exports and forget about the domestic market," said Cam.
“The textile and garment industry does not forget the domesticmarket. The current production capacity of the Vietnamese textile and garmentindustry is about 50 billion USD, of which about 85 – 87% is for export whilethe rest serves the domestic market,” affirmed Cam.
Cam said that the domestic market’s capacity is too small comparedto the country’s garment and textile production capacity. Therefore, thetextile and garment industry both focuses on exploiting potential exportmarkets and serving the domestic market.
According to the Vitas vice president, Vietnam's textile andgarment industry must walk on two feet, not only focusing on the internationalbut also on the domestic market because the domestic market also has greatattraction with an expected average per capita income of 4,700 USD in 2024. Itis estimated that if about 15% of people's income is spent on consumption, thecapacity of the domestic market will reach about 7 billion USD next year.
Challenges in the context of integration
Permanent Vice President of the Vietnam Consumer Goods DevelopmentAssociation Nguyen Thi Thu Thuy said that the domestic consumer market was oneof the important fields, always fluctuating, extremely diverse and the drivingforce of Vietnam’s economy.
“Consumer trends often reflect changes in consumer needs,preferences, habits and values. Grasping and responding to consumer trends is akey factor for consumer goods businesses to compete and develop at any time andin any country,” said Thuy.
However, Thuy said that with the current globalisation trend,especially the boom of e-commerce, competitive pressure on goods is becomingmore and more fierce. Meanwhile, consumers themselves, anywhere, can buy goodsjust by surfing the Internet and ordering from international e-commerce sitesis becoming more and more popular and common.
Regarding the textile and garment industry, Cam assessed that atthis moment, Vietnamese goods have many advantages in the domestic market,however, "the domestic market is not only full of opportunities and localtextile and garment enterprises also face many challenges in the domesticmarket". Vietnamese garments also have to compete with fake, counterfeitand smuggled goods. When these goods enter Vietnam, their labels are changed todeceive consumers.
According to the Deputy Director of the Domestic Market Departmentunder the Ministry of Industry and Trade, Le Viet Nga, many imported productstend to shift strongly to consumption in the domestic market afternew-generation free trade agreements such as CPTPP (Comprehensive and ProgressiveAgreement for Trans-Pacific Partnership), EVFTA (EU-Vietnam Free TradeAgreement) officially took effect. This is also a huge challenge fordomestically produced goods in the context of general integration.
In addition, many foreign retail chains have actively invested inexpanding their physical store and warehouse systems in Vietnam to distributeimported goods both online and directly, especially cosmetics and fashiongoods, supplementary foods and high-end foods, furniture and household appliances,and products for mothers and babies.
The Ministry of Industry and Trade representative said that theproportion of imported goods in the distribution system, especiallycross-border e-commerce channels, will likely increase soon. The scale of Vietnam'sretail market has exceeded 180 billion USD in 2023 and is forecast to continueto grow in the following years. At the same time, Vietnamese people'sconsumption trends have changed a lot.
Nga added that Vietnam has become a fertile land for retailers,but this is also an opportunity for Vietnamese businesses to build brands andexpand domestic distribution channels for Vietnamese exported goods, find asolid foothold for Vietnamese products with quality and national brands and keyproducts of localities. Vietnamese businesses also have a more methodicalapproach to the domestic market, to gradually dominate and keep the "homeground"./.
Lessons learned from the textile industry
Truong Van Cam, Vice President of the Vietnam Textile and ApparelAssociation (Vitas), said that the textile and garment industry is one of Vietnam'skey export industries and creates many jobs for workers. The textile andgarment industry’s export turnover reached more than 44 billion USD in 2022. Vietnam'stextile and garment industry currently not only promotes exports but alsoserves the domestic market.
“Many Made-in-Vietnam products, ranging from garments, footwearand seafood to many other industrial products, are exported all over the world,including many developed countries. This is also the pride of Vietnameseproducts. But we often receive questions about why textiles and garments oftenfocus on exports and forget about the domestic market," said Cam.
“The textile and garment industry does not forget the domesticmarket. The current production capacity of the Vietnamese textile and garmentindustry is about 50 billion USD, of which about 85 – 87% is for export whilethe rest serves the domestic market,” affirmed Cam.
Cam said that the domestic market’s capacity is too small comparedto the country’s garment and textile production capacity. Therefore, thetextile and garment industry both focuses on exploiting potential exportmarkets and serving the domestic market.
According to the Vitas vice president, Vietnam's textile andgarment industry must walk on two feet, not only focusing on the internationalbut also on the domestic market because the domestic market also has greatattraction with an expected average per capita income of 4,700 USD in 2024. Itis estimated that if about 15% of people's income is spent on consumption, thecapacity of the domestic market will reach about 7 billion USD next year.
Challenges in the context of integration
Permanent Vice President of the Vietnam Consumer Goods DevelopmentAssociation Nguyen Thi Thu Thuy said that the domestic consumer market was oneof the important fields, always fluctuating, extremely diverse and the drivingforce of Vietnam’s economy.
“Consumer trends often reflect changes in consumer needs,preferences, habits and values. Grasping and responding to consumer trends is akey factor for consumer goods businesses to compete and develop at any time andin any country,” said Thuy.
However, Thuy said that with the current globalisation trend,especially the boom of e-commerce, competitive pressure on goods is becomingmore and more fierce. Meanwhile, consumers themselves, anywhere, can buy goodsjust by surfing the Internet and ordering from international e-commerce sitesis becoming more and more popular and common.
Regarding the textile and garment industry, Cam assessed that atthis moment, Vietnamese goods have many advantages in the domestic market,however, "the domestic market is not only full of opportunities and localtextile and garment enterprises also face many challenges in the domesticmarket". Vietnamese garments also have to compete with fake, counterfeitand smuggled goods. When these goods enter Vietnam, their labels are changed todeceive consumers.
According to the Deputy Director of the Domestic Market Departmentunder the Ministry of Industry and Trade, Le Viet Nga, many imported productstend to shift strongly to consumption in the domestic market afternew-generation free trade agreements such as CPTPP (Comprehensive and ProgressiveAgreement for Trans-Pacific Partnership), EVFTA (EU-Vietnam Free TradeAgreement) officially took effect. This is also a huge challenge fordomestically produced goods in the context of general integration.
In addition, many foreign retail chains have actively invested inexpanding their physical store and warehouse systems in Vietnam to distributeimported goods both online and directly, especially cosmetics and fashiongoods, supplementary foods and high-end foods, furniture and household appliances,and products for mothers and babies.
The Ministry of Industry and Trade representative said that theproportion of imported goods in the distribution system, especiallycross-border e-commerce channels, will likely increase soon. The scale of Vietnam'sretail market has exceeded 180 billion USD in 2023 and is forecast to continueto grow in the following years. At the same time, Vietnamese people'sconsumption trends have changed a lot.
Nga added that Vietnam has become a fertile land for retailers,but this is also an opportunity for Vietnamese businesses to build brands andexpand domestic distribution channels for Vietnamese exported goods, find asolid foothold for Vietnamese products with quality and national brands and keyproducts of localities. Vietnamese businesses also have a more methodicalapproach to the domestic market, to gradually dominate and keep the "homeground"./.
VNA
