A Zara store in HCM City (Photo: baodautu.vn)
Hanoi (VNA) – The influx of foreign fast fashion brands into Vietnam is threatening
local retailers’ market share, forcing the firms to move to keep their foothold
in the market, Dau tu (Vietnam Investment Review) newspaper reported.
Le Thi Quynh Trang, General Director of the
Multimedia JSC – which runs many fashion programmes in Vietnam, said the
country is becoming more popular in the global fashion industry as most fashion
brands, from high-end to fast fashion ones like Chanel, Giovanni, Salvatore
Ferragamo, Versace, Burberry, Topshop, Mango and Zara, have come to Vietnam.
HM and Uniqlo also plan to enter this market.
“Vietnamese consumers’ demand is now ripe for
them to make inroads into Vietnam,” she said.
HM is scheduled to open its first outlet in
Ho Chi Minh City in the next few days. The Swedish brand said Vietnam is one of
its five key future markets.
There are nearly 200 foreign fashion brands in
Vietnam, accounting for more than 60 percent of the market share. Mid-end
brands like Giordano and Bossini and high-end ones such as Mango, Dolce Gabbana,
Topshop, Gap, Banana Republic and Tommy Hilfiger post the strongest sales.
Competition
pressure
Foci, a domestic brand that debuted in 1999 and
gained a strong foothold in the affordable segment, folded in 2014.
Ngo Thi Bau, General Director of Nguyen Tam
Textile Garment Company – Foci’s owner – switched to opening a
Japanese-style restaurant chain in HCM City. She said aside from high ground
rent, Foci had to give up due to falling sales caused by cheap clothing from
China and counterfeits.
The Viet Fashion Joint Stock Company, which owns
Ninomaxx and NM brands, has been making strategic steps to develop. It has
62 retail outlets across the country at present and plans to increase store
numbers soon.
However, some insiders said Ninomaxx may lose
its status to foreign rivals. They said in addition to cost-related problems,
Vietnamese firms struggled as they were unable to grasp the latest fashion
trends 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 City
on September 8, 2016. That reflects Vietnamese consumers’ interest in foreign
fast fashion, which pressures domestic brands to make changes, according to Dau
tu newspaper.
The force
to change
Among Vietnamese brands, Canifa has emerged as
an affordable fashion brand with the leading growth rate and store number in
the country. The presence of Zara, HM and Uniqlo has forced Canifa to
change, especially with their target markets similar.
Canifa has raised the number of its outlets to
96, many of which are based in major shopping malls or ideal locations in big
provinces and cities. An advantage of this firm is that its factories are in
Vietnam, helping cut time from design, production to sale.
Nguyen Van Thoi, Chairman of TNG Investment and
Trading Joint Stock Company, said the entrance into Vietnam by HM, Zara
and Uniqlo is a chance for Vietnamese brands to develop their designs but also
a big challenge.
TNG used to manufacture apparel ordered by
Walmart, Zara, Levi’s, GAP, CK and Puma. However, it decided to abandon this
and specialise in selling TNG-branded products. TNG outlets are expected to increase
to about 100 this year, he said.
The decisive factor is keeping up with
consumers’ taste, thus Vietnamese firms need professional designers. TNG has
partly satisfied the market’s demand and gained a market share, he noted.
Thoi said TNG products are sold at competitive
prices and will outpace foreign brands in this regard.-VNA