Fashion market large enough for both domestic, foreign brands
Some Vietnamese fashion brands are keeping calm amid the ‘foreign fashion wave’, saying they have advantages in the local market and with demand on the increase, the market is still large enough.
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Many foreign brands, from high-street to luxury, including Chanel, Giovanni, Salvatore Ferragamo, Mango, Zara and H&M, all have landed in Vietnam. Uniqlo from Japan is also expected.
Realizing the high demand, Zara opened a shop in HCM City in September 2016. The Spanish fashion brand began selling products online on April 5, 2017 and will open its second shop in Hanoi.
In September 2017, H&M will open its first shop in Vietnam, located at Vincom Dong Khoi, just next to Zara’s shop. The Swedish fashion brand stated that Vietnam is among the five key markets that it is targeting.
Nikkei reported that Vietnam is a strategic destination point for Zara and H&M in their plans to conquer new markets.
Inditex, which runs the Zara chain, said 280 shops would open in the 2017 fiscal year, while the brand would focus on five new markets, including New Zealand and Vietnam, with 93 new shops to open.
H&M also plans to open 430 more shops this year in some markets, including Kazakhstan, Columbia and Vietnam.
While Vietnamese fashion brands remain unruffled as luxury brands arrive in Vietnam, they seem to be worried about the presence of high-street brands such as Zara and H&M.
Luxury brands are reserved for a minority of consumers with high income, while high-street brands target middle-income earners and will be the major rivals for Vietnamese brands. Sources said Zara earned VND5.5 billion in revenue on the first day of operation in Vietnam.
Analysts said that Foci, a brand of Nguyen Tam Company, NinoMaxx (Thoi Trang Viet), Blue Exchange (Xanh Co Ban Fashion), PT2000 (Pham Tuong Garment 2000) and Canifa (Hoang Duong Trade & Service Co) will be affected by foreign brands because the companies target the same group of customers.
Online sellers are also rivals of foreign high-street brands in Vietnam. Vu Thuy Hanh in Cau Giay district in Hanoi said before Zara came to Vietnam, she could earn VND100 million a month from selling Zara’s products online and did not have to pay tax.
However, Nguyen Tiep from NEM, a Vietnamese brand, is optimistic about the company’s business performance. He said the market is large enough for all to thrive if businesses can find the right market segments.
