There are many international brands in Vietnam

TTO – A series of International brands in VietNam and achieving great sales. Vietnamese enterprises face strong competition in the domestic market with the current size of about 4.5 billion USD.

Shopping at a fashion store in Ho Chi Minh City (photo taken on September 16) – Photo: QUANG DINH

After a lot of Vietnamese people have to go abroad to buy products of famous international brands, the number of international brands coming to Vietnam are now increasing.

Many foreign fashion firms are dominating the shopping centers when many Vietnamese consumers are willing to spend more money on luxury goods.

International brands in VietNam – Foreign revenue increased rapidly

As a “fashionista” of foreign fashion, Nhung (Hanoi) said that except for high-end products, the price of foreign fashion brands is quite popular at 300,000-900,000 VND per unit, or promotions.

Previously, she had to buy clothes through channels such as shop selling hand goods but the price was quite high without updating regularly new models. Ms. Nhung was quite surprised when the vice president of Uniqlo Fashion Company of Japan just officially announced the plan to develop the chain of stores in Southeast Asia with double the current number to 400, especially in Vietnam, Laos and Myanmar.

It is not strange that international fashion brands want to jump into the Vietnamese market.

According to a leader of a large textile enterprise in Vietnam, Vietnamese people are quite famous in some Southeast Asian countries for their ability to buy branded goods, especially in Singapore. Therefore, there is no reason that the big brands are out of the game in this competion.

Fashion brand Zara (Spain) at the end of 2016 (with a business time of less than 4 months), according to the data of Vietnam Industry Research and Consultancy Joint Stock Company (VIRAC), achieved revenue 321 billion dong, an average of 2.8 billion dong a day.

Zara stores in Vietnam are operated by Mitra Adiperkasa (MAP). MAP has established Mitra Adiperkasa Vietnam Company to further operate Pull & Bear, Stradivarius and Massimo Dutti brands in Vietnam.

By opening new stores with the brand Pull & Bear, Stradivarius, Massimo Dutti and opening more Zara stores in 2017, the revenue of the entire Mitra Adiperkasa system in Vietnam has soared to more than VND 1,100 billion.

In the first half of 2018, revenue continued to grow by 133% over the same period in 2017, to nearly 950 billion VND – an average of nearly 5.3 billion VND per day.

After a year of presence in Vietnam, Swedish fashion brand Hennes & Mauritz AB (H&M) also achieved sales of about 322 billion VND in the first six months of 2018 and is opening more stores.

Sharing with Tuoi Tre, H&M representative in Vietnam assessed Vietnam as a high potential market as Vietnamese young people increasingly update fashion trends in the world.

H&M said after a year in Vietnam, the number of stores has increased to 6 and the company does not hide its ambition to constantly search for new locations to open more sales points.

More intense competition

According to Trinh Dinh Long – an expert in developing consumer brands, in the context of fashion brands such as Zara, H&M, Mango, Topshop … constantly jumping into Vietnam, Uniqlo’s announcement of opening the chain is to quickly grab market share pie.

Especially when Uniqlo has a huge cost advantage because it has moved its production chain from China to Vietnam, the opening of the store is to soon complete the closed value chain.

The presence of this brand not only creates an increasingly fierce competition in the fashion market, but also affects the design space and the development of the supporting industry.

With a large population and a growing middle class, Vietnam’s fashion market is becoming an “attractive piece” for investors.

According to the Vietnam National Textile and Garment Group (Vinatex), each year the total domestic demand of the market is up to 40 million sets of clothes with a scale of 4.5 billion USD. It means that Vietnamese people spend about 100,000 billion dong each year on clothes.

A small group of people tend to buy products from international brands more than Vietnamese brands, so the Vietnamese fashion market is becoming a “money-making” land for many foreign fashion brands.

According to a leader of the large southern textile enterprises, the risk of foreign brands dominating the market share of medium and high-end fashion is entirely possible.

VIRAC’s report showed that while Zara achieved sales of nearly VND 1,000 billion in the first half of 2018, Vinatex (with a series of member companies) in the first six months of the year in the domestic market was still over 6,000 billion.

However, only a number of large-scale brands of Vinatex such as Phong Phu, Viet Thang … can achieve revenue on Zara, the rest are only reaching sales from a few dozen to a few hundred billion.

Vietnam is a leading textile and garment exporter, so the leadership of a textile and garment export enterprise is confident that Vietnamese enterprises can fully compete in the country in many segments.

The problem is how businesses pay attention and invest, really match before the revenue indicators of foreign enterprises.

Vietnamese goods are more expensive than foreign goods, consumers are now hesitate

According to Mr. Pham Xuan Hong (chairman of Ho Chi Minh City Textile and Garment Association), foreign fashion brands that have landed in Vietnam currently have not put much pressure on some fashion segments for domestic enterprises. However, Vietnamese businesses need to consider the future now.

Because a small group of Vietnamese people love foreign brands even though their designs and quality are sometimes not better than Vietnamese products.

In order to compete with foreign fashion brands, Vietnamese enterprises must invest in building and promoting their brands, designing products to better suit the needs of Vietnamese consumers, especially prices.

Currently, many fashion brands have designs suitable for office workers and young people but the price is too high, even more expensive than foreign goods, so consumers are less favored.

NGOC AN – THUY LINH