Local fashion brands struggle to compete in domestic market | Business

Local fashion brands struggle to compete in domestic market hinh anh 1Japanese fashion brand Uniqlo has had eight stores in Vietnam since late 2019. (Photo: VNA)

Hanoi (VNS/VNA) – 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.

market revenue in 2020 decreased by more than 10 percent from 2019
due to the COVID-19 pandemic, said the report, adding that popular local
brands such as Biti’s, Canifa, Viet Tien and May 10 all ranked behind Adidas,
Zara and H&M in terms of sales.

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 VND in the country.

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 453 million
SEK (54.3 million USD), up about 4.4 percent from 2019. The brand also
opened its ninth store in the country last year.

media reported that a few months after launching in Vietnam, H&M achieved
revenue of 227 billion VND (9.78 million USD) in 2017 and reached 760
billion VND in 2018 and 1.116 trillion VND in 2019.

also said Zara Vietnam recorded 321 billion VND in revenue in 2016, more than 1.1
trillion VND in 2017 and nearly 1.7 trillion VND in 2018.

for Uniqlo, although it has not announced revenue and profit figures yet, the
Japanese fashion giant has continuously opened many new stores since entering
Viet Nam at the end of 2019. The brand now has eight stores in Vietnam.

more and more fashion stores have closed in the pandemic, during the April 30
and May 1 public holidays, H&M in Vincom Dong Khai in Ho Chi Minh 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.

report on May 7 said: “More and more international brands are entering the
market which is increasingly dominated by H&M, Zara, Uniqlo.”

VIRAC report calculated more than 200 foreign fashion brands from mid-range to
high-end have official stores in Vietnam.

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.

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.”

to the report, poor designs and the small scale of many local businesses
made it tough for them to compete.

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.”

trading of fake products at markets and stores and on e-commerce platforms
has also caused difficulties for Vietnamese businesses./.

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