A recent report on the local fashion market of the Vietnam Industry Research and Consultancy (VIRAC) found that Vietnamese fashion brands are losing out in the local market, which is increasingly dominated by international brands.
|Japanese fashion brand Uniqlo has had eight stores in Vietnam since late 2019. A view of a store in Vincom Metropolis in Hanoi. As Vietnamese people enjoy foreign fashion brands, the local brands are suffering from losses. — VNS Photo Le Mai Huong|
Fashion market revenue in 2020 decreased by more than 10 per cent from 2019 due to the COVID-19 pandemic, said the report, adding that popular local brands such as Biti’s, Canifa, Việt Tiến and May 10 all ranked behind Adidas, Zara and H&M in terms of sales.
The top three fashion retailers in the country in 2020 were Adidas, Zara and H&M. Experts have said the enthusiasm of Vietnamese people for foreign fashion brands has helped them make trillions of dong in the country.
While the revenue of big local brands has not been reported, according to H&M’s annual report in 2020, the brand’s revenue in Vietnam hit SEK453 million (US$54.3 million), up about 4.4 per cent from 2019. The brand also opened its ninth store in the country last year.
Local media reported that a few months after launching in Vietnam, H&M achieved revenue of VND227 billion (US$9.78 million) in 2017 and reached VND760 billion in 2018 and VND1.116 trillion in 2019.
They also said Zara Vietnam recorded VND321 billion in revenue in 2016, more than VND1.1 trillion in 2017 and nearly VND1.7 trillion in 2018.
As for Uniqlo, although it has not announced revenue and profit figures yet, the Japanese fashion giant has continuously opened many new stores since entering Vietnam at the end of 2019. The brand now has eight stores in Vietnam.
While more and more fashion stores have closed in the pandemic, during the April 30 and May 1 public holidays, H&M in Vincom Dong Khoi in HCM City was full of people waiting in line to buy clothes. Zara, another foreign fashion brand located next to H&M in the same centre, was even more crowded while Uniqlo, a Japanese fashion brand nearby, was even busier again.
VIRAC’s report on May, 7 said: “More and more international brands are entering the market which is increasingly dominated by H&M, Zara, Uniqlo.”
The VIRAC report calculated more than 200 foreign fashion brands from mid-range to high-end have official stores in Vietnam.
Data from Euromonitor shows fashion giants lead the Vietnamese fashion industry, with Adidas, Zara and H&M the three businesses holding the largest market share in the local fashion market.
VIRAC said local fashion brands, on the other hand, were dwindling, saying: “The domestic fashion business has long been the underdog in the local market and the situation is even worse now.”
According to the report, poor designs and the small scale of many local businesses made it tough for them to compete.
Pham Xuan Hong, chairman of the HCM City Association of Garment Textile Embroidery and Knitting, told local media: “Vietnamese love famous brands so they enjoy buying products from foreign giants when they enter the country. In addition, the foreign brands also serve them with products of diverse models at suitable price segments.”
The trading of fake products at markets and stores and on e-commerce platforms has also caused difficulties for Vietnamese businesses.
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